“My comment to British Columbia is a big red sign saying ‘Stop.’ This is crazy. Don’t go ahead with this [project],” Vardy told DeSmog Canada.
“While the review is taking place the activity should be suspended.”
Vardy is the former chair and CEO of Newfoundland’s public utilities board, which reviewed the “boondoggle” Muskrat Falls dam after a new provincial government came to power. As in the case of Site C and B.C.’s former Liberal government, the previous Newfoundland government had refused to allow independent scrutiny of Muskrat Falls.
On Wednesday the B.C. cabinet instructed the BCUC to provide two reports on Site C — a preliminary report by September 20 and a final report by November 1.
“We appreciate that a lot of people’s lives are on hold, especially in the northeast,” Energy Minister Michelle Mungall told a media briefing today, “and that’s why we want to make this an expedited process.”
Mungall was in part referring to people like Peace Valley farmers Ken and Arlene Boon, whose property was expropriated by the B.C. government last December for the relocation of a provincial highway for Site C. The Boons have remained in their farmhouse, now owned by BC Hydro, but their lease has expired and they are anxiously waiting to find out what will happen to their third generation home and property.
Mungall said no Peace Valley families will be forced to move and no further Site C contracts will be issued during the review, news that was met with relief by the Boons.
“We’re ecstatic,” said Ken Boon, reached by phone while moving hay bales. “That pretty much covers it.”
The BCUC review will focus on assessing whether or not the $8.8 billion Site C hydro dam is truly on time and on budget, as the former Liberal government claimed, and what the costs are to suspend, terminate or continue with the project.
Vardy, an economist, said Muskrat Falls went through a “quick and dirty review,” a process that took five months and resulted in the utilities board concluding that it lacked sufficient information to make a recommendation about whether or not to proceed with the dam on Labrador’s Churchill River.
Newfoundland’s new government went ahead with construction of the dam, which the CEO of Nalcor Energy, the Newfoundland equivalent of BC Hydro, has now admitted is a “boondoggle.” The cost of Muskrat Falls has ballooned to $12.7 billion, about $5 billion more than the price tag when the project was approved, and it will cause the average Newfoundland household’s hydro bills to jump by an estimated $1,800 a year.
Vardy said it was a “tall order” to ask the BCUC to review Site C in such a short amount of time.
“The main concern that I have is that the timing seems to be very short given the complexity of the review. It’s a very constricted time frame,” he said.
But Mark Jaccard, the former head of the B.C. Utilities Commission, said three months is plenty of time to review Site C. There are “all sorts of precedents” for that, said Jaccard, a professor in the School of Resource and Environmental Management at Simon Fraser University.
Jaccard said he once led a very quick hearing on gasoline prices in B.C. A few independent experts were asked to write a quick review on a narrowed range of possible responses to the key questions in the terms of reference.
The BCUC then issued a 20-page report and instructed intervenors — people with a stake in the issue who had signed up to participate in the hearing — to limit their criticisms, evidence, suggestions and arguments to about 20 pages, with a time limit for response.
— DeSmog Canada (@DeSmogCanada) August 2, 2017
“We received all their material, digested it, and significantly edited our findings,” said Jaccard, who headed the BCUC from 1992 to 1997. “So think of that as a paper hearing.”
David Austin, a Vancouver lawyer specializing in energy issues, agreed that three months is sufficient for a thorough Site C review.
“As long as the necessary expertise is assembled the timelines are achievable,” Austin told DeSmog Canada, adding that work on the hydro project should continue in the meantime.
“Essentially the utilities commission is determining whether Site C can break even or make money from 2024 to 2094,” said Austin.
“Until the government has some basic facts before it, it shouldn’t terminate workers. That’s just the price that has to be paid given that the project was commenced in the way it was.”
Vardy also warned that focusing on Site C’s job creation potential rather than its overall cost and need for the electricity “makes no sense.”
“You can’t rationalize this on the basis of job creation.”
In Newfoundland, where 5,000 people were employed to work at Muskrat Falls during the project’s peak construction period, it cost ratepayers half a million dollars for each job that was created, said Vardy, who cautioned that “the only thing that really matters” in an economic assessment of Site C are future costs, not money that has already been spent.
“Even though you might have spent a lot of money — billions of dollars — you’ve got to set that aside and ask the fundamental question: how much is it going to cost to finish this and how much is it going to cost to stop it?”
The terms of reference for the Site C review, which Vardy called “very comprehensive,” include asking the BCUC to advise on other energy portfolios and conservation initiatives that can provide clean energy to BC Hydro customers at similar or lower costs to Site C.
The BCUC has said it is “ready and able” to review Site C if asked by the government.
Mungall said there will be a public engagement process during the BCUC review, and that it will be up to the BCUC to determine the format it will take.
She said the B.C. cabinet will make the final decision on Site C.
Image: Peace Valley Ken Boon in his kitchen, by Garth Lenz.