BC NDP to proceed with Site C dam, total cost raised to $10.7B
, Global News, December 11, 2017
It’s official. B.C.’s NDP government says it will complete the controversial Site C dam megaproject.
“Although Site C is not the project we would have favoured and it’s not the project we would have started, it must be completed to meet the objectives our government has set,” said Premier John Horgan on Monday.
Horgan laid the blame on the previous BC Liberal government, whom he accused of mismanagement and forcing the project to the point of no return.
“Cancelling the project would mean a $4 billion hit, an unavoidable $4 billion hit immediately, either on BC Hydro’s books or on the books of the minister of finance,” Horgan said.
“The consequences of that would be a 12 per cent rate increase almost immediately and foregoing very important capital projects like schools and hospitals, bridges and transit.”
Horgan also acknowledged the decision would upset a great many of his party’s supporters.
“I know that this decision will be profoundly important to many British Columbians. Family members of mine, friends of mine will be very, very disappointed with this.”
Horgan said the province will now launch a “turnaround program” designed to contain costs and add benefits to the project.
That plan will include a new Project Assurance Board charged with overseeing spending, quality and environmental integrity. It will also create a BC Food Security Fund to boost the province’s farming industry and put aside $20 million to compensate future lost sales in agriculture.
The turnaround program will also include incentives for First Nations, whom Horgan admitted would be unhappy with the decision.
Horgan said the government will open up BC Hydro’s Standing Offer Program, allowing Indigenous communities to build and profit from small-scale renewable power projects, as well as boost the number of First Nations apprentices on the Site C project.
Monday’s announcement met with swift applause from the BC Liberal opposition.
“Today… is a great day for the First Nations, communities and businesses that depend on Site C to make a living to support themselves and their families,” said Peace River South MLA Mike Bernier in a statement.
Bernier said the decision will save 2,000 jobs and that the Liberals would be watching closely to ensure there are no cost overruns.
The BC Greens, meanwhile, slammed the move with leader Andrew Weaver calling the project “fiscally reckless.”
“Site C is no longer simply a B.C. Liberal boondoggle — it has now become the B.C. NDP’s project,” said Weaver in a statement.
Government’s first test
The future of the $10.7-billion project has been a looming question ever since the NDP took power in July.
Construction on the project has been underway since 2016, and the province has already spent upwards of $2 billion to make it happen.
During the 2017 election, the NDP refused to take a firm position on Site C, instead pledging to send it for a review by the BC Utilities Commission (BCUC).
A report from the regulator earlier this fall found the project was unlikely to be either on time or on budget.
However, the NDP has faced enormous pressure from both sides regarding the project’s future.
On one side are its allies in government, the BC Greens, who are adamantly opposed – along with First Nations, environmentalists and landowners who argued the project is not needed and would cause irreparable ecological damage.
On the other side are the business community and independent and unionized building trades who argued the project would create thousands of well-paying jobs; BC Hydro, which argued the dam would provide clean power needed to meet future demand; and the BC Liberal opposition.
About 2,000 workers are already on site, and the former BC Liberal government argued the project would eventually create as many as 10,000 jobs.
Making the decision even thornier for the government was the multitude of reports commissioned on the risks and benefits of Site C.
In its final report in November, the BCUC found the project would likely miss its slated 2024 completion date, and could exceed its original $8.3-billion budget by 20 to 50 per cent.
It found that scrapping the project would cost the province nearly $4 billion — $2.1 billion in sunk construction costs and $1.8 billion to wind down the project.
The report also found that BC Hydro’s forecast for future power demand was “excessively optimistic” and suggested plummeting prices for alternative power sources could make them an attractive alternative.
BC Hydro disputed that last point — arguing the BCUC had underestimated the benefits of Site C compared to alternative power by as much as $800 million.
The Allied Hydro Council of BC (AHC), a union group, also questioned the BCUC report, arguing that a one-per-cent annual increase in power demand in the next two decades would actually necessitate three site C dams.
It said the BCUC did not adequately weight the money already sunk into the project, and said with virtually no solar or geothermal power plants already in operation, shifting alternative power sources would be unrealistic.
The BCUC has since acknowledged that ratepayers could also face a 10 per cent or greater rate hike, if the province was to absorb the full $4 billion cost of scrapping the dam in a single decade.
Adding to the complexity of the government’s decision was the initial 2014 report from the federal-provincial joint review panel that was initially charged with reviewing the project.
The panel found that the dam, which would flood 100 kilometres of river valley and 3,000 hectares of wildlife habitat, would have adverse effects on First Nations’ use of the land, along with sensitive ecosystems.
However, it also found the economic and energy benefits of the project outweighed the risks, and that the dam would “produce fewer greenhouse gas emissions per unit of energy than any source save nuclear.”
Decades of debate
The decision ends nearly four decades of debate over Site C.
Plans for the dam have been on the books since the late 1970s, when it was proposed as the third in a series of hydroelectric projects in the Peace River Valley.
Site C actually went before the BCUC twice in the 1980s, and was rejected both times.
However, BC Hydro has owned the land since then and it has kept plans on the books.
Former premier Gordon Campbell revived the project in 2010, arguing the dam – which would provide power to the equivalent of 450,000 homes – was needed to meet growing electricity demand.
BC Liberal changes to provincial environmental laws also meant the dam wouldn’t require a review by the BCUC this time.
The project earned federal and provincial environmental certificates in October 2014 and won the final green light from former premier Christy Clark the following month.
Since then, it has faced multiple unsuccessful court challenges from the West Moberly and Prophet River First Nations and local farmers, and an occupation by protesters.