Remember B.C.’s Clean Energy Act, championed by former Liberal Premier Gordon Campbell to position B.C. as a “world leader” in addressing climate change?

The act exempted hydro undertakings like the Site C dam from independent oversight by the watchdog B.C. Utilities Commission (BCUC), an independent body set up to ensure that projects proposed by the government are in the public interest, and not promoted for partisan political gain.

The act further set the legal stage for building the Site C dam, a pet project of the B.C. Liberals, by closing the door on energy sources such as the Burrard Thermal natural gas-fired plant and the power to which B.C. is entitled under the Columbia River Treaty.

On Thursday, B.C.’s Auditor General Carol Bellringer — the province’s public interest watchdog — issued a report nudging the NDP government to review and amend the Clean Energy Act’s objectives, which the report describes as “too diverse and in many cases contradictory with each other.”

Bellringer also found the act’s objectives are often in contradiction with the utility commission’s mandate.

“There is a risk that exempting the commission from reviewing large projects can undermine public confidence in those projects and in the regulator [the BCUC] itself,” says the report, noting that regulators are set up to provide a “transparent and evidence-based process.”

The report highlights the Site C dam project as a case in point. “Our office has received many requests to examine government’s decision to build the Site C dam, which government initially excluded from the review process,” the report notes.

“Government’s decisions to exclude the commission from overseeing certain BC Hydro projects is inconsistent with one of the original purposes of the commission — to fully regulate BC Hydro.”

Independence of BCUC a concern

In a teleconference Thursday, Bellringer said the government “already knows how it can make the BCUC more effective.”

Bellringer zeroed in on the commission’s independence as one area that needs attention.

“An effective regulator is in the interests of all the residents of British Columbia,” she said.

“Independence means that regulators are able to make objective decisions based on facts. Independence enables regulators to consider the short and long-term interests of ratepayers, regulated companies and the public.”

By excluding the BCUC from key decisions, Bellringer said the government “loses out on the value of an independent transparent review and expert advice.”

In a later telephone interview, Bellringer said her office continues to look into the $10.7 billion Site C dam project.

“We’re still planning to do an audit,” she told DeSmog Canada. “We’re still trying to figure out what aspect to look at. I know there’s quite a bit of pressure on us from all kinds of people who would like us to do that very quickly but as you know it’s a very large project, so not so easy to narrow down.”

The auditor general also said there is “no question” that on-going Site C oversight by the BCUC would “add to the strength” of the independent review it conducted last fall, which found that the project is behind schedule and over-budget, with a final price tag that could exceed $12.5 billion.

“I just don’t have a view on exactly what it would look like.”

“There is a risk that exempting the commission from reviewing large projects can undermine public confidence in those projects and in the regulator itself.” B.C. Auditor General, Carol Bellringer, on the exemption of the Site C dam from BCUC review https://t.co/Vmnij9jLDQ

— DeSmog Canada (@DeSmogCanada) March 16, 2018

Oversight lost with Clean Energy Act

Site C was far from the only energy project that the Clean Energy Act removed from independent BCUC review.

The Northwest Transmission Line, an over-budget project that brought power to remote mining operations, was also stripped of oversight, as were BC Hydro’s smart meters plan and power supply proposals from independent power producers, to which BC Hydro is now paying millions of dollars not to produce power because of an electricity surplus in the province.

The operation of Burrard Thermal, a natural gas-fired generating plant on the north shore of Port Moody in the Lower Mainland, was also removed from BCUC scrutiny.

Built in 1963, the plant was refurbished in the 1990s to become the cleanest standby natural-gas fired plant on the continent. It was capable of generating 950 megawatts of electricity, nearly as much as the Site C dam.

The district of Hudson’s Hope, the municipality hardest hit by the Site C dam, has pointed out that Burrard Thermal could have been refurbished for $1 billion to bring it into compliance with the Clean Energy Act, at a fraction of the cost of the Site C dam project.

The BCUC wanted Burrard Thermal to continue operating, to provide emergency backup power, but the BC Liberals shut down the plant in the spring of 2016.

What Is the Clean Energy Act?

Former Premier Gordon Campbell described the act as a legal chisel that would enable B.C. to chip away at its greenhouse gas emissions and invest in renewable energy.

“We want British Columbia to become a leading North American supplier of clean, reliable, low carbon energy,” the Campbell declared on the day the act was introduced.

Among other changes, the act positioned B.C. to become a bigger exporter of electricity, with the Site C dam as the cornerstone of new energy experts, although there were no committed buyers for the dam’s power.

There is still no confirmed buyer for the Site C’ dam’s electricity, and energy demand in B.C. has been flat for more than ten years even though the population has grown by 17 per cent.

The act also mandated that B.C. must be almost completely self-sufficient in electricity, shutting the window on electricity imports, including from clean energy sources.

It prohibited B.C. from accepting Columbia River electricity generated in the U.S. — about the same amount of power as Site C would produce — even though a provision for claiming that power is included in the Columbia River Treaty.

Although the Site C dam project received an expedited BCUC review last fall, the NDP government did not allow the BCUC to recommend whether or not the project should proceed, as the commission would have done before the Liberals removed its oversight.

Notably, the BCUC review revealed troubling geotechnical issues and on-going problems with Site C’s major contractors, who are suing BC Hydro for more money. It also determined that energy alternatives such as wind and geothermal could provide the same amount of energy at a lower or equal cost.

Bellringer said her office originally intended to conduct an audit of the BCUC to determine if it is exercising effective oversight of BC Hydro and other organizations it regulates, such as ICBC.

But preliminary planning work for the audit determined that many of the same risks to the BCUC’s effectiveness had already been identified in two task force reviews in 2013 and 2014, and that further audit work would not contribute to a better understanding of the issues.

“We felt that those important areas needed to get attention and so we decided to issue this report instead.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

A highly anticipated review of B.C.’s Site C dam has found the project is likely to be over budget and behind schedule and alternative energy sources could be built for an equal or lower unit energy cost.

The report from the B.C. Utilities Commission released Wednesday confirmed many of the concerns that have been raised about the project for years.

The panel found BC Hydro’s mid-load forecast for electricity demand in B.C. “excessively optimistic” and noted there are risks that could result in demand being less than even BC Hydro’s lowest demand scenario.

The panel was “not persuaded that the Site C project will remain on schedule” and found “the project is not within the proposed budget of $8.335 billion.”

Currently, completion costs may be in excess of $10 billion, the report read.

The panel concluded it would be too costly to suspend the dam and potentially re-start construction later and focused its efforts on laying out in detail the consequences of either abandoning or completing the dam. The decision now rests with the B.C. government.

Site C, the third dam on the Peace River, has been controversial for many reasons — but perhaps most of all because the project was exempted from review by the province’s independent utility regulator, the B.C. Utilities Commission.

After coming to power this July, B.C.’s new NDP government immediately sent Site C — which has been under construction for two years — for an expedited review by the commission.

The commission considered 620 written submissions and 304 oral submissions from experts and members of the public in preparing its report.

Minister of Energy, Mines and Petroleum Resources Michelle Mungall said the government plans on making a final decision on the project by the end of the year.

“Now it is our turn, as government, to determine whether Site C is in the best interests of British Columbians, after considering the BCUC’s findings and other issues outside the scope of this review,” Mungall said in a statement.

“This will be an extremely difficult decision. We inherited a project that was advanced by the previous government without proper regulatory oversight, is now more than two years into construction, employs more than 2,000 people, and on which about $2 billion has already been spent.”

The government will meet with First Nations before making a decision, Mungall said.

Energy analyst Robert McCullough, working on behalf of the Peace Valley Landowner Association, said he believes the BCUC report spells the beginning of the end for Site C.

He called the report “courageous” because it basically rejects every part of BC Hydro’s submission, McCullough said.

Site C Dam Over Budget, Behind Schedule and Could be Replaced by Alternatives: BCUC Report https://t.co/u1Mh7hGwVv #SiteC #Hydro #bcpoli pic.twitter.com/9aycFzvRWg

— DeSmog Canada (@DeSmogCanada) November 1, 2017

Faulty Demand Forecasting Used to Justify Site C

The panel’s report finds BC Hydro has continued a historical pattern of over-forecasting electricity demand and notes the accuracy of BC Hydro’s industrial forecasts has been “considerably below industry benchmarks.”

The failure of an LNG export industry to materialize in B.C. has significantly reduced the likelihood that BC Hydro’s load forecasts will be accurate, the panel found.

The panel also found BC Hydro failed to accurately account for the impact that rising electricity costs have on consumption.

Additionally, given current low market prices and the likelihood of increasing supply, the panel found that BC Hydro’s proposed export price forecast “should not be relied upon.”

An independent analysis provided to the BCUC by the auditing firm Deloitte found between 1964 and 2016, BC Hydro overestimated future electricity demand in B.C. 77 per cent of the time.

The panel’s critique of BC Hydro’s demand forecasting falls in line with the analyses and opinions of numerous experts who have pointed out the crown corporation’s long history of inaccurate forecasting and the potential for costly oversupply.

Alternative Energy “Increasingly Viable,” Panel Finds

The panel critiqued BC Hydro’s modelling of alternatives as unreliable, saying it is “opaque in its assumptions” and uses out-of-date cost estimates for wind and solar.

The panel stated it found a pairing of alternative energy sources and conservation efforts “increasingly viable” at an equal or lower cost than Site C

During two days of technical briefings by experts, the panel heard BC Hydro consistently ignored or over-inflated the costs of wind, solar and geothermal.

In a submission prepared for the BCUC, North American hydroelectric expert Robert McCullough noted the price of renewables has dropped dramatically since 2010, when the Site C project was resuscitated by the B.C. government. During the last seven years the price of solar dropped 74 per cent, while wind dropped 65 per cent.

In August, BC Hydro submitted to the BCUC that it had screened out solar energy on the basis of a cost estimate in 2025 of $97/MWh. In response to a follow-up question from the commission, BC Hydro provided updated cost estimates of $48/MWh.

Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives, is calling for a public inquiry into how BC Hydro and the former Liberal government made the case for the project.

“It’s amazing. I would like to see a full inquiry to investigate how BC Hydro executives and the previous government essentially conspired to manufacture the case for Site C,” Lee said.

“As someone who strongly believes in public sector institutions and Crown corporations, to have our electricity utility lying to us, making up numbers and doing all sorts of spurious comparisons between its preferred option and the alternative is shameful,” he said.

ICYMI: Geothermal Would Create 15 Times More Permanent Jobs Than Site C, Panel Told

The panel developed its own model for assessing Site C alternatives and found “it is possible to design an alternative portfolio of commercially feasible generating projects and demand-side management initiatives that could provide similar benefits to ratepayers as Site C.”

Further still, the panel found B.C. could pursue alternative energy and swallow the estimated $1.8 billion cost of terminating Site C and still end up with overall electricity costs comparable to building Site C.

The advantage of alternative energy, the panel states, is its incremental nature.

Combining energy conservation efforts with “smaller scale renewable projects provides flexibility to better match generation with demand.”

Conservation programs and smaller scale projects built by independent power producers “have project completion times in the range of months to a few years, and each project (or energy contract if it is contracted through an IPP) is much lower in price than Site C,” the panel found.

Site C Behind Schedule and Over Budget

Construction of Site C has been plagued with costly setbacks, the most significant of which occurred with the appearance of tension cracks along the left bank of the Peace River.

In October, the new CEO of BC Hydro, Chris O’Riley, wrote a letter to the BCUC, acknowledging the crown corporation would not meet its own timeline for river diversion due to “geotechnical and construction challenges” — a setback that would add an additional $610 million to the project’s budget.

An independent audit conducted by the firm Deliotte on behalf of the BCUC also identified the risk of construction setbacks inflating the Site C budget.

DeSmog Canada first reported on June 30, 2016, that the Site C dam was behind schedule and over budget. Documents obtained via Freedom of Information legislation later revealed a co-ordinated attempt by BC Hydro and Premier Christy Clark’s Office to discredit the story.

Because Site C is in the early stages of construction and due to “the lack of certainty” around persistent geotechnical issues, “the additional $610 million may just be the first in what could be a continuing series of additional risk events occurring, resulting in further cost overruns,” the panel stated.

Infringement of Treaty 8 Rights Still a Question

In addition to cost overruns from construction delays, the panel found unresolved questions regarding the infringement of Treaty 8 First Nations’ rights could further add to Site C costs.

The West Moberly and Prophet River First Nations maintain the Site C dam represents an infringement of their rights guaranteed under Treaty 8. Although the two nations have brought and lost legal challenges in B.C. courts, the question of rights infringement is far from settled, the panel found.

“The courts have addressed administrative law issues including the Crown’s duty to consult but have not addressed whether the Crown, by approving Site C has unjustifiably infringed the Treaty 8 rights. West Moberly and Prophet River First Nations submit that the Crown bears the risk that in the event a lawsuit is commenced, the court will find in favour of Treaty 8 First Nations.”

Under Treaty 8, the government of Canada promised to guarantee the rights of local First Nations to hunt, trap, fish and continue their traditional way of life on their land.

The option remains for Treaty 8 nations to file a civil case for damages caused by Site C, a possibility the panel considered.

The panel also noted the protection of Indigenous rights and reconciliation were present as a “major sub-theme” in its community input sessions.

“The termination of Site C would be interpreted as a positive and meaningful step in the reconciliation process for those First Nations who did not reach an agreement with BC Hydro,” the panel stated in its report.

So what now?

The panel’s alternative portfolio indicated that under the low-load forecast, new power supply wouldn’t be needed until 2039 and could be met by the addition of 444 MW of wind and demand-side management initiatives, such as increased energy efficiency and optional time-of-use rates.

“The cost to ratepayers of Site C and the Illustrative Alternative Portfolio are virtually equivalent,” the panel states.

But, regardless of the comparative costs, there are other issues to consider when comparing the completion and termination cases, the panel notes.

“Both scenarios involve risk that is not easy to quantify. The major risk of Site C in the short term is whether there will be further construction cost overruns. Site C is a major construction project and therefore inherently at risk of larger cost overruns than a smaller project. It has already exceeded its budget, only two years into a nine-year schedule. There are tension cracks and disputes with its contractors both of which remain unresolved,” the report reads.

B.C. Green Party leader Andrew Weaver said he was encouraged by the report’s finding about alternative energy sources.

“I have long argued that the plummeting cost of alternative renewables makes Site C the unequivocal wrong direction for B.C.’s energy future,” Weaver said in a statement. “Supporting the development of smaller renewable projects presents a significant economic opportunity for all corners of British Columbia.”

It will take leadership to cancel Site C, but it is the right decision, according to Weaver.

“It is unconscionable that the BC Liberals demonstrated such reckless disregard for British Columbians and for sound fiscal management by pushing through such a substantial megaproject without proper due diligence and oversight,” he said.

The panel also notes that there are other ways to meet future energy needs that include changes to government policy. These include re-patriating some or all of the Columbia River Treaty entitlement.

“This energy is generated from water stored behind BC Hydro dams in British Columbia and is as firm and flexible as the energy from Site C,” the panel notes.

Ultimately though, the panel doesn’t take a position on which of the termination or completion scenarios has the greatest cost to ratepayers.

Galen Armstrong, Peace Valley campaigner with the Sierra Club BC, said the case for Site C fell apart “at the hands of BC Utilities Commission.”

“The government is faced with two options: continue with an unnecessary boondoggle, leaving taxpayers and ratepayers on the hook for decades to come, or pivot to a lower-cost alternative energy portfolio including wind and geothermal that would provide jobs for British Columbians at a lower cost,” Armstrong said.

Update Notice: This story was updated at 5:30 p.m. to include additional comment.

– With files from Judith Lavoie

Image: Site C dam construction September 2016. Photo: Garth Lenz | DeSmog Canada

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Although former B.C. premier Christy Clark vowed to push the $9-billion Site C dam past the “point of no return” before the May 2017 provincial election, the fate of the most expensive public project in B.C.’s history is still far from certain.

B.C.’s new NDP government has vowed to send the dam for an expedited review of costs and demand by the B.C. Utilities Commission within a speedy six-week timeframe.

New aerial photos of Site C construction show a small stretch of the Peace River valley significantly altered by excavation crews. The building of the actual dam and associated infrastructure has yet to take place. Unless the project is stopped, construction is expected to continue until 2024 when the filling of the reservoir will flood 107 kilometres of river valley, flooding valuable agricultural land and First Nations historic sites.

An analysis by the Program on Water Governance at the University of British Columbia found that, if completed, Site C would operate at a 100 per cent surplus incurring an estimated $800 million to $2 billion loss to B.C. ratepayers. That same analysis calculated cancellation of Site C by the end of June 2017 would save B.C. between $500 million and $1.65 billion.

A Site C worker camp can be seen in the bottom right of this photo, taken July 2017. Photo: Vicky Husband

Photo: Vicky Husband

A bridge crosses the Moberly River which flows into the Peace River. A 400-metre tension crack appeared on the valley face directly across from the mouth of the Moberly River. The embankment was partially flattened is an effort to stabilize the slope. The tension crack was listed as one reason BC Hydro missed hitting key Site C construction milestones, according to a report filed with the B.C. Utilities Commission.

Photo: Vicky Husband

As a result of the tension crack, BC Hydro’s plans to construct Peace River diversion tunnels to allow construction of the dam structure may be delayed. According to BC Hydro’s construction timeline, the river is to be diverted September 2019.

Photo: Vicky Husband

A partnership that includes the Alberta corporation Petrowest, Korea’s Samsung C&T and a Canadian subsidiary of the Spanish conglomerate Acciona make up Site C’s main civil works contractors. According to BC Hydro these contractors have “experienced delays on several of their critical path activities, requiring a re-sequencing of planned work.”

Photo: Vicky Husband

A deep cut in the slope reveals underlying shale rock. Photo: Vicky Husband

Photo: Vicky Husband

Boon family farm. Part of the farm will be flooded as a result of the site C Dam. the remainder of the farm will be destroyed by B.C. Hydro’s road diversion project which will put the road right through the Boon’s Home and upper section of the farm. Photo: Garth Lenz

According to BC Hydro 6,469 hectares of farmland — an area larger than all the farmland in Richmond — will be destroyed by the Site C dam and its vast reservoir. Floodwaters will cover this Peace Valley farm owned by Ken and Arlene Boon. An additional 5,900 hectares of farmland falls within what BC Hydro calls a “stability impact zone” and is at risk of destruction.

Arlene Boon harvesting vegetable in their market garden. Photo: Garth Lenz

Arlene Boon, pictured here in her garden, and her husband Ken live on a third-generation farm recently expropriated by BC Hydro. The Boons are expected to vacate their property by July 23, 2017 unless granted a new extension by BC Hydro.

Tufa seep. Photo: Garth Lenz

In the fall of 2016 BC Hydro applied for a provincial permit to destroy an ancient wetland known as a tufa seep for Site C construction. Botanist and lichenologist Curtis Bjork has studied the Peace River Valley since 2008 and said the tufa seep included in BC Hydro’s application likely began to form 10,000 years ago.

Cascading pools in a Peace River Valley tufa seep. Photo: Garth Lenz

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

An association representing B.C.’s commercial sector and business interests says it has compelling evidence that B.C. Hydro has over forecasted electricity demand over the past 50 years — leading to anticipated revenues “that won’t show up” and creating a large existing electricity surplus roughly equal to the power from the Site C dam.

The end result, according to David Craig, the executive director of the Commercial Energy Consumers Association of B.C., could be cumulative new hydro rate increases so significant that that some industries in B.C. may no longer be able to compete as well in their world markets, potentially risking the viability of some businesses and the jobs they support.

Craig confirmed that his association is challenging B.C. Hydro’s projections of power demand — known as “load forecasts” — in an on-going proceeding at the B.C. Utilities Commission, the agency responsible for approving hydro rate increases.

“We just want to get the truth,” said Craig, who previously spent more than 20 years working for B.C. Hydro in various management positions, including as the head of the utility’s accounting group and internal audit function.

“Hydro’s been buying too much energy at very expensive prices. It’s in the interests of all commercial customers in B.C. and all ratepayers to find out what the facts are.”

Craig’s comments come only weeks after Premier Christy Clark’s statement on the campaign trail that cancelling construction of the $8.8 billion Site C dam on the Peace River would “literally put British Columbia families and business in the dark.”

The premier’s statement is “just not accurate for a whole bunch of reasons,” according to economist Marvin Shaffer, a professor in SFU’s Public Policy Program.

“If Site C didn’t go ahead, there are other sources of supply,” explained Shaffer, who has said it is not cost effective to cancel Site C right now even though there “never was a business case for the government’s rush to build the Site C project.” (A recent UBC report, on the other hand, concluded that cancelling the controversial project by the end of June would save between $500 million and $1.6 billion.)

‘We Just Want the Truth’: Commercial Customers Warn @bchydro’s Forecasts Could Lead to Costly Oversupply https://t.co/r18ERthrga #SiteC

— DeSmog Canada (@DeSmogCanada) May 16, 2017

Craig declined to respond to Clark’s statement about the pressing need for Site C, saying that his job is “to get in, get the data, see if I can find the truth of what’s there and…present fact-based debate and argument.”

“We don’t get to prosecute the past but we do get to plan the future,” said Craig, whose association represents the commercial sector energy consumers by consulting with industries and organizations that include the B.C. Chamber of Commerce, Landlord B.C., the Building Owners and Managers Association, and the B.C. Greenhouse Growers’ Association, as well as B.C.’s municipalities.

According to B.C. Hydro’s own data, energy demand in B.C. has been stagnant for the past decade in the residential and commercial sectors.

Yet, during January’s cold snap, B.C. Hydro issued a news bulletin announcing that electricity demand in the province was at an “all time high,” and reassuring customers that “the power will be there on the coldest, darkest days of the year — without brownouts or without having to import expensive power from other jurisdictions.”

Investments like Site C, said the same B.C. Hydro bulletin, would help meet the “growing demand” for electricity in the province and ensure reliable power in the future.

When the government announced its final approval of Site C in December 2014, former Energy Ministry Bill Bennett told the media that B.C.’s electricity needs were forecast to increase by 40 per cent over the following 20 years. “It’s clear that to keep rates low, we must choose the option of building Site C,” Bennett said.

In a 2013 submission to B.C. Hydro’s Technical Advisory Committee, Craig’s association warned of the risks of proceeding with Site C and other power acquisitions when the electricity was not needed, saying that “this future power supply…needs to be avoided for as long as possible.”

“The risks of oversupply are the most prevalent risks in the B.C. Hydro system,” said the association. “The future rate increases for all B.C. Hydro customers, which come with these choices, will be significant if the power is supplied at existing rates.”

At the time, the association highlighted energy conservation measures as a cost effective way of helping to defer new energy purchases like Site C.

“We’ve spent money on conservation and efficiency and it’s working,” explained Craig, who is also the vice-president of the B.C. Advanced Conservation and Efficiency Association, a non-profit organization that advocates for enhanced conservation and energy efficiency practices.

But B.C. Hydro has backed away from energy conservation measures since 2013, the year before Site C’s final approval. It has reduced plans for energy conservation and efficiency for the next 20 years and expects energy savings to decline dramatically as Site C and other planned energy acquisitions are forecast to come on-line.

As part of the BCUC proceeding, the Commercial Energy Consumers Association asked B.C. Hydro to share its “load forecast” information and figures on actual energy demand for the past 50 years so it could do its own number-crunching.

Craig said that led to the emergence of the pattern of “systemic” over-forecasting, “decade by decade.”

“Why is B.C. Hydro still over forecasting after 10 years of declining use?” he asked.

Craig said the association’s goal is to ensure that if something is awry in B.C. Hydro’s data definitions it is corrected, so that load forecasts will be more accurate and B.C. does not continue to end up with large amounts of surplus power that could lead to higher hydro rates.

Right now, the province has so much electricity that B.C. Hydro is paying independent producers millions of dollars a year not to generate power.

Yet rising hydro costs are already challenging some of B.C.’s biggest industrial power users, including some pulp mills, to look for ways to manage their costs to remain competitive in their markets, including developing their own natural gas-fired power generation.

“[The] impact of over-forecasting is that their plans end up anticipating revenues that won’t show up,” explained Craig. “And when those revenues don’t show up it turns into rate increases. And when they acquire more energy than they need and sell it for less, that turns into rate increases.”


On April 28, B.C. Hydro corrected two “load forecast” figures it had provided to the BCUC, apologizing for the revisions.

The corrections were made to the 2003 and 2013 load forecasts — which project electricity demand for many years beyond those dates — and Craig said the “size of the error in the data for the 2013 forecast was substantial.”

He also confirmed that the Joint Review Panel that examined Site C for the federal and provincial governments — concluding that there was no need for Site C’s energy in the timeframe presented by B.C. Hydro — was given the same 2013 load forecast figures contained in B.C. Hydro’s corrections, and not the erroneous forecast.

Craig said far more than two years of load forecasts will need to be corrected in order to begin to address the problem of over-forecasting. “If they’re only correcting the data point for a couple of years that will not make any significant difference.”

He said the next step in the process is for the association to file its argument with the BCUC, and for B.C. Hydro to file counter-arguments.

“At that point you’ll have the debate open and transparent in front of the utilities commission and the utilities commission will make a decision on it.”

B.C. Hydro did not respond to two requests for comment.

B.C. Hydro Forecast Revisions Submission to B.C. Utilities Commission by DeSmog Canada on Scribd

Image: B.C. Hydro president Jessica McDonald at a Site C announcement. Photo: Province of B.C. via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

As the cost of producing energy from wind and sun continues to drop, power produced by the Site C dam will be an increasingly bad bargain, according to leading U.S. energy economist Robert McCullough.

In a report comparing the cost of nuclear, hydro and natural gas energy with power produced by solar and land-based wind farms, McCullough concludes that renewables cost less than half the cost of hydro.

“While there would be costs associated with suspending or halting construction of Site C, I remain of the view that BC Hydro could save $112.74-million on an annual basis by instead building wind and solar. This amount could be higher if tax credits for renewable energy were considered,” McCullough wrote in a cover letter to Ken Boon, Peace Valley Landowner Association president.

The initial report by McCullough looked at the economics of closing the aging Diablo Canyon nuclear plant in Southern California. A major factor in the decision to close the plant was that nuclear, like coal and hydropower, no longer compared favourably with increasingly low natural gas prices and renewable energy.

“While natural gas prices plummeted over the past decade, the cost of renewables also fell — sharply — as economies of scale in wind and solar dominated the market,” McCullough wrote.

McCullough, an expert on power utilities in the Pacific Northwest and principal of an energy policy research company based in Portland, then looked at conclusions drawn in the Diablo Canyon report in relation to Site C.

If BC Hydro put a halt to Site C construction it would free up more than $112 million annually to spend on other pressing infrastructure projects or BC Hydro could write a cheque for $57.84 to every B.C. household every year, McCullough suggested.

The provincial government has said that wind and solar are not viable options because they are intermittent, rather than firm sources of power.

But McCullough noted that hydroelectric energy is also subject to monthly and annual variability.

“As penetration of renewables increases, the portfolio effect of many different projects has reduced the overall variability of output very significantly in recent years,” he said.

McCullough concluded that the 2016 cost of producing solar energy would be $59 per megawatt hour, while wind would be $72 and Site C almost $84.

Yeowza! Halting Construction of #SiteC Could Save $112-million Annually, Says Energy Expert #bcpoli @LavoieJudith https://t.co/cEuaO6BX0t

— DeSmog Canada (@DeSmogCanada) October 11, 2016

Last year, shortly before construction began on the $9-billion project that will create an 83-kilometre reservoir on the Peace River, McCullough was commissioned by the Peace Valley Landowners Association to take a look at the business case for the project and concluded that BC Hydro had taken liberties with its figures to make Site C look better than alternatives, such as small, independent hydro projects.

That report found that Site C was more than three times as costly as renewables and natural gas and McCullough publicly called Site C an expensive luxury.

The government has stuck to its figures, saying they have been rigorously scrutinized, and has steadfastly refused to send the project to the B.C. Utilities Commission for review.

Ken Boon said in an interview that it should not come as a shock to government that there are cheaper options, but they have insisted on using “trumped up and very optimistic numbers.”

“But even using those figures they don’t compare to using renewables and then what happens when it inevitably goes over budget as always seems to happen with large projects such as hydroelectric dams?” he asked.

“Then there’s the whole problem of building a big white elephant instead of small green projects as and when you need them…Building 1950’s technology in 2016 is not making much sense.”

McCullough’s report looks only at the financial aspects, but the cost also has to be counted in other areas, such as environmental harm and socio-economic problems, Boon said.

A recent analysis from a group of academics at the University of British Columbia found the Site C dam is the most environmentally destructive project ever considered under the federal Canadian Environmental Assessment Act.

“This just reaffirms once more that this project needs to go to a robust B.C. Utilities Commission hearing with cross-examination and witnesses under oath. What this report says is that it’s not too late,” he said.

Image: Site C dam construction along the banks of the Peace River. Photo: Garth Lenz/DeSmog Canada 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

In only its earliest phases of construction, the Site C dam project has already spent more money than projected and missed key benchmarks, threatening to undermine Premier Christy Clark’s commitment to taxpayers to keep the project on budget and on time.

BC Hydro documents filed June 10 with the province’s independent public utility watchdog, the B.C. Utilities Commission (BCUC), show that that Site C expenditures totalled $314 million more at the end of March than was originally budgeted for that date.

The same documents, reviewed by DeSmog, also flag the potential for cost overruns if interest rates climb, taxes increase or the Canadian dollar continues to depreciate over the projected eight remaining years the dam is under construction.

More than $1.4 billion of Site C’s $8.8 billion price tag consists of interest payments, and twenty percent of its capital costs are based on foreign currency.

“The project is monitoring and evaluating some specific cost pressures and is conducting detailed budget reviews to identify opportunities for savings,” BC Hydro said in its quarterly progress report to the utilities commission, noting that Site C’s overall cost forecast remains “on track.”

Despite Hydro’s assertion that the project’s total price tag will not increase, the Crown corporation’s latest report is an early indication that the Site C dam may be headed the way of major hydroelectric projects worldwide, which have posted average cost overruns of 56 percent.

Former BC Hydro CEO Marc Eliesen said the higher than projected expenditures by March are not at all surprising, especially given that Site C is proceeding “without due diligence.” In 2010, the provincial government changed the law to exempt the BCUC from decision-making authority to determine if the project was in the best interests of British Columbians.  

“We can expect nothing but escalating increases in the future if Site C is to go ahead,” Eliesen said in an interview with DeSmog. “This is scheduled to become a big white elephant.”

Eliesen predicts that Site C’s final price tag will be $11 to $12 billion. He points to last week’s announcement that the cost of Labrador’s Muskrat Falls hydroelectric dam has ballooned to $11.4 billion, from $7.4 billion in 2012, as an indication of what will happen with Site C.

As Newfoundland and Labrador consumers face huge hydro bill increases, the man in charge of Muskrat Falls, Nalcor Energy CEO Stan Marshall, admitted the project was too large and “not the right choice” but said it is too late to discontinue building.

“If [Site C] goes ahead this is exactly what B.C. ratepayers face,” said Eliesen. “They will be paying rates among the highest in the country.”

Notably, the Joint Review Panel that examined Site C for the federal and provincial governments said it could not conclude on the likely accuracy of Site C’s cost estimates because the panel did not have “the information, time, or resources.”

Premier Clark, who visited the Peace River region June 19, made no acknowledgement of higher than projected Site C spending or tardiness in meeting this year’s major benchmarks. Choosing her words carefully, the Premier said the government must ensure “we don’t go overtime, we don’t go over budget.”

BC Hydro attributes the spending variance to early expenditures for workers’ accommodation facilities and the main Civil Works contract, according to the quarterly report, which also notes that BC Hydro “has encountered challenges in the early stages of mobilization” of the main civil works contractor.

The $1.75 billion civil works contract, the largest single Site C contract, was awarded last December to a consortium called the Peace River Hydro Partners, which is responsible for building river diversion tunnels and constructing the 60-metre high dam across the Peace River. The consortium includes ACCIONA Infrastructure Canada Inc., a wholly owned subsidiary of a Spanish company, the Calgary-headquartered Petrowest Corporation and Korean-owned Samsung C&T Canada Ltd.

Hydro’s report to the BCUC also shows that Site C has fallen behind on four of seven key 2016 milestones, and is at risk of being late on a fifth.

#SiteC has fallen behind on 4/7 key milestones & is at risk of being late on a 5th https://t.co/vyTKfIkElj #bcpoli pic.twitter.com/idXKq56OQi

— DeSmog Canada (@DeSmogCanada) July 2, 2016

The only two key milestones BC Hydro expected to meet from April to October 2016 involved the on-time construction of workers’ accommodation facilities, recently showcased to the media. Missed milestones, which fall one to eight months behind, involve site preparation, road work and excavations on the Peace River’s north bank, the latter of which is slated to be carried out by the Peace River Hydro Partners.

BC Hydro’s previous two quarterly reports to the BCUC listed all but two of 16 milestones as on track.

Hydro’s most recent report to the BCUC provides an intriguing snapshot of some of the other financial risks Site C faces as the government strives, in Clark’s words, to push the project “past the point of no return.”

Among the risks are unexpected geotechnical problems BC Hydro says it is monitoring to determine how they will affect the project’s future finances.  

Key geotechnical surprises to date include unexpected shearing during construction, unexpected slope failure on the project’s north bank, larger than expected deterioration of shale bedrock exposed during construction and a phenomenon called rock rebound/swell.

To mitigate geotechnical risks, BC Hydro recommends transferring “some degree of ground condition risks to the Contractor,” Peace River Hydro Partners. The Crown corporation says it will have more information about geotechnical risks once the consortium commences its excavation of 32 million cubic metres of earth and rock.

Other noted risks to delivering the project on time and on budget include three on-going lawsuits against the dam by First Nations and outstanding permits requested from the federal government, under the Fisheries Act and Navigable Waters Act.

Hydro notes that up to 34 provincial permits are also needed, but tells the BCUC it is conducting weekly meetings with the Ministry of Forests, Lands and Natural Resource Operations (FLNRO) “to ensure that these future applications meet the scheduling needs of the project.”

DeSmog previously learned that FLNRO granted BC Hydro several exemptions from the B.C. Wildlife Act to keep Site C dam construction from falling behind expected timelines, a move that experts said was illegal.

The financial risk that is judged by Hydro to have risen the most this year involves the successful execution of Site C contracts, including the main civil works contract. “Contractors may be unable to execute successfully on scope of contract without resulting costs to BC Hydro,” BC Hydro notes.

As part of its response, BC Hydro has increased supervision to address the failure of some contractors to comply with conditions outlined in Site C’s environmental assessment certificate, an issue that has begun to dog the project.

In April, BC Hydro was issued a non-compliance order by the B.C. Environmental Assessment Office for failing to adhere to measures to control run-off water and sediment. That was followed by a warning letter to BC Hydro from the Canadian Environmental Assessment Agency in May after federal investigators discovered air monitors near Site C operations were not collecting any data.

On June 24, an Edmonton-based Site C contractor, Morgan Construction & Environmental Ltd., was issued two non-compliance orders by the B.C. Environmental Assessment Office, following months of verbal and written warnings. 

Chris Parks, Senior Compliance and Enforcement Officer with the B.C. Environmental Assessment Office, wrote in the orders that Morgan had failed to implement measures to control and clean up leaks and spills of hydrocarbon material, and to segregate and dispose of waste material properly.

An inspection by Parks last December found that Morgan had deposited recyclables, food waste and hazardous waste containing hydrocarbons in a single bin marked “municipal waste.”

BC Hydro’s Site C spokesperson Dave Conway was travelling and not available for comment.

Image: Site C construction. Photo: Garth Lenz

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

A broad coalition of organizations from across Canada wants Prime Minister Justin Trudeau to halt construction of the Site C dam by refusing to issue federal permits needed for construction of the $9-billion project that will flood 23,000 hectares of land along 107-kilometres of the Peace River Valley.   A letter to Trudeau, signed by 25 organizations ranging from Amnesty International and the Council of Canadians to the Canadian Parks and Wilderness Society and the David Suzuki Foundation, asks that the new Liberal government live up to its promises of a new relationship with First Nations.   “Our organizations are profoundly concerned that construction of the Site C dam is being pushed ahead despite the conclusion of a joint federal-provincial environmental assessment that it would severely and permanently undermine indigenous peoples’ use of the land; harm rare plants and other biodiversity; make fishing unsafe for at least a generation and submerge burial grounds and other crucial cultural and historical sites,” an open letter released by the coalition says.   The letter urges Trudeau to rescind all permits and to re-examine the previous government’s approval of the dam, which was given despite Treaty 8 claims that it violated treaty rights.   “The people of Treaty 8 have said no to Site C. Any government that is truly committed to reconciliation with indigenous peoples, to respecting human rights and to promoting truly clean energy must listen,” the letter says.

The provincial government is largely responsible for Site C permits, but the federal government must issue permits in areas of federal jurisdiction such as fisheries, transport and wildlife. 

BC Hydro did not respond to questions about outstanding permits in time for publication.   During recent climate change negotiations in Paris, most Canadians were delighted that Trudeau linked climate change with human rights, Joe Foy, from the Wilderness Committee, said.   “The Peace River is where the rubber meets the road. This is clearly against what this government and this country stands for,” Foy said.   “The federal government needs to go on record now that, at every step of the way, they will resist this.”   Candace Batycki, spokesperson for the Yellowstone to Yukon Conservation Initiative, one of the organizations that signed the letter, said Site C is not just another resource development project.   “The Site C dam is one of the largest resource development projects underway in Canada and its impact on the environment and local First Nations will be severe,” she said.   First Nations from the Peace River area have already asked the federal government to step into the controversy and AFN National Chief Perry Bellegarde is among those who have called for a second look at the project.   Chief Roland Willson of West Moberly First Nations said there has not yet been an opportunity to meet with members of the Trudeau cabinet, but letters have gone to all ministers.   “I have to believe in my heart they are seriously considering it. They have to understand the process was severely flawed,” he said.   “They can’t talk about a new enhanced relationship and start stabbing their fingers in our eyes…There’s no doubt it’s an infringement of treaty rights,” he said.   Trudeau should understand that there are ways to produce the power, such as run-of-river hydro projects, that do not destroy the valley, Willson said.   So far, an old-growth forest has been destroyed and there are minor earthworks, “but there is nothing irreversible,” he said.   Site C still faces three legal challenges and BC Hydro has applied for an injunction against First Nations members camping at historic Rocky Mountain Fort.   BC Hydro claims the protesters have been preventing contractors from completing their work on the south bank of the Peace River since January 4 and the petition will be heard in B.C. Supreme Court in Vancouver on February 22.   “We will still be at the camp, whatever courses are followed. This is Treaty 8 territory,” said Helen Knott of Prophet River First Nation, who is among the Treaty 8 Stewards of the Land women who have been taking shifts camping at the fort.   The group has asked Trudeau and Premier Christy Clark to suspend all approvals for logging, road building and land clearing in the Peace River Valley until all the court cases have been heard, there has been a federal review of the infringement of treaty rights and an independent review of the project by the B.C. Utilities Commission.   Knott said she is willing to be arrested, but hopes it will not be necessary as she is heading to Toronto and Ottawa next week to meet with federal government representatives.   No meetings have yet been organized, she said.   “But we want to make every effort to do this the right way. I do have some sort of hope that something magical will happen,” she said.

You can click here to read more about Prime Minister Justin Trudeau and climate change.

Image: Sign on the banks of the Peace River via the ECOReport.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Two days ago, the weather forecast for northeastern B.C. called for snow. And snow it did, at least up on the plateau in places like Fort St. John and Dawson Creek. But there’s one place in the northeast that stayed conspicuously snow-free: the Peace River Valley.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

In 1920, Renee Ardill’s grandparents arrived in the Peace Valley with nothing more than a milk cow, saddle horse and team and wagon. They chose a piece of land on the banks of the Peace River, built a cabin, hunted moose and grew what they could.

“They built everything from the ground up,” Ardill told DeSmog Canada. “Imagine being able to pick your piece of land and make what you wanted out of it.”

The Ardill family has been here ever since, running a cattle ranch on the banks of the Peace. But their days could be numbered if BC Hydro’s Site C hydroelectric dam gets the go-ahead this fall from the provincial and federal governments.

[view:in_this_series=block_1]

The panel tasked with reviewing the project found BC Hydro failed to prove that the energy from Site C would be needed within the timeframe set out in the proposal. The panel’s report, released in May, also found that there are cost-effective alternatives to building a new dam, but the province has failed to adequately investigate options such as geothermal.

If built, the dam will flood 107 kilometres of the Peace River and its tributaries — impacting 13,000 hectares of agricultural land, including flooding 3,800 hectares of farmland in the Agricultural Land Reserve, an area nearly twice the size of the city of Victoria.

That flooding would put the Ardill’s ranch underwater. Thirty-three other farm operations would also be affected by the project, according to the panel’s report.

“This is the best piece of land in the world. My grandpa picked a good spot. And I’m damned if I’m gonna give it up,” Ardill says. “Everybody now lives in the artificial world. People go to the grocery store and get their vegetables and they come wrapped in plastic. That’s not how it is. It comes from somewhere.”

Loss of Farmland in Peace Valley ‘Almost Tragic’: Agriculture Expert

Agriculture experts say the Peace Valley is home to some of the best land in the province, with the ability to produce fresh fruits and vegetables for a million people, according to agriculture expert Wendy Holm.

“It’s not about what’s economic today,” Holm told DeSmog Canada. “This is land that forms part of the commons. This is part of the natural capital of our country.”

Yet, the joint review panel’s report (PDF) found that loss of agricultural land would not be significant in the context of B.C. or western Canadian agricultural production, while acknowledging “this loss would be highly significant to the farmers who would bear the loss, and that financial compensation would not make up for the loss of a highly valued place and way of life.”

Eveline Wolterson, a soil scientist who gave expert testimony during the review process, says the panel missed the point in its analysis by looking at the current use of land (largely forage production) instead of the potential of the land.

“The reality is that the reason that land is in forage production is because most of it is owned by BC Hydro or it’s in the flood reserve, which means that at any time BC Hydro could expropriate those lands,” Wolterson told DeSmog Canada. “That has discounted the value of that land, as well as discounted the amount of money landowners are willing to invest in a piece of property.”

Wolterson points to the Okanagan Valley’s now booming wine industry as an example of how the panel has failed to think of the future.

“In mid 1970s, the likelihood of agricultural use of those [Okanagan] lands would likely have been low. But because we saved those lands and left them, the use of those lands is extremely high right now,” she says.

The productivity of the agricultural land in the Peace River Valley is unique not only in the region, but in British Columbia and Western Canada, Wolterson said.

Take potatoes, a main production commodity in the Lower Mainland, for example. In the Lower Mainland, yields are about 10 tonnes per hectare. In the Peace Valley, yields are 30 per cent more at 13 tonnes per hectare due to more daylight and ideal conditions in the east-west valley, Wolterson says.

“The area that they are proposing to flood is approximately equivalent to the agricultural land base in Delta, so it’d be like flooding all that land, taking it right out of production,” she says. “It’s almost tragic.”

The David Suzuki Foundation recently released a report looking at the economic benefits of keeping the Peace River region’s remaining farmland and nature intact beyond the market value of agriculture in the region.

The Peace Dividend found that the ecosystem services (such as providing clean air, clean water, carbon storage and habitat for wildlife) provided by farmland and nature in the Peace River Watershed are conservatively worth an estimated $7.9 billion to $8.6 billion a year.

Cantaloupes, Corn Grow in Peace Valley’s Unique Microclimate

Ken and Arlene Boon, owners of Bear Flats Farm and log home builders, know the value of the valley all too well. They regularly see mule deer, moose, elk, wolves and black and grizzly bears on their land.

The Boons host the annual Paddle for the Peace on their farm, where they can grow everything from corn to cantaloupes due to the unique microclimate in the valley. If the dam is built, they will lose their best farmland and their home.

In their submission to the panel, the Boons wrote: “As we write this submission, we feel like a prisoner trying to save his life by writing a statement that will hopefully save him from the death penalty.”

Ken Boon is fighting to save his farm from being flooded by the Site C dam. Photo: Emma Gilchrist.

Standing in their garden eating fresh peas, they talk about the five generations of their family who’ve lived on this land.

The 1,100-megawatt Site C dam has been on the books for 30 years and was turned down by the B.C. Utilities Commission in the 1980s. This time around, the B.C. government has exempted the project from a utilities’ commission review, despite calls from local politicians and the joint review panel itself to have the project reviewed by the independent regulator.

“Life has to go on for us, because grandpa was told in the ’70s that he was going to have to move because they were going to build it,” Arlene says. “He passed away without seeing the project happen. I’m sure that our grandkids will be having the same discussion.”

Five generations of Arlene Boon’s family have enjoyed Bear Flats Farm. Photo: Emma Gilchrist.

But she hopes her grandchildren won’t have to fight this fight again.

“Our push this time is to try kill it once and for all,” Arlene says.

Solar panels on the Boons property feed energy back to the electricity grid.

“You can generate electricity many ways, but you can only grow food one way,” Ken says. “What we can’t afford to do is to be flooding farmland any more.”

Ken Boon showcases his solar panels, which feed electricity back to the B.C. grid. Photo: Emma Gilchrist.

The original Bear Flats Schoolhouse is on the Boons’ land, along with the Bear Flats Museum, which houses 5,000-year-old arrowheads and family heirlooms.

“It’s impossible to replace when you have this kind of history,” Arlene says. “I don’t want to be a millionaire. I just want to be happy on this land.”

For Esther and Poul Pedersen, it’s a similar story. Their 65 hectare (160-acre) property is right above where the Site C dam would be built and is within the zone that could slough into the reservoir.

Located just five minutes outside of Fort St. John, it’s the perfect place to raise horses and give riding lessons.

“It’s really hard to replace,” Esther says. “We feel that the valley is precious.”

To mitigate the lost value of agricultural economic activity, BC Hydro proposed a $20 million agricultural compensation program to support projects in the region, in addition to farm mitigation plans for directly affected agricultural operations.

But as Esther looks out over the Peace River Valley, she — like so many others — says what her family has is irreplaceable.

Esther Pedersen walks to a lookout on her land above the proposed site of the Site C dam. Photo: Emma Gilchrist.

If you read its report closely, it appears the joint review panel did — at least on some level — grasp that sentiment. In coming to its conclusion that the earning potential of the Peace River Valley would appear to be highest as a reservoir, the panel notes it was unable to take into account “heartbreak (for residents who would be displaced from the land of their dreams).”

Question is: how do you put a price on heartbreak?

Back on the Ardill ranch, Renee just put $30,000 into fixing up an old barn.

“I think you have to go forward or give up. You can’t just sit there,” she says. “You have to act like you’re going to keep going or you give up. And I’m not very good at giving up.”

Renee and Dick Ardill at their ranch on the banks of the Peace River. Photo: Don Hoffmann

Ardill’s story is showcased on the StopSiteC website, which aims to gather petition signatures from citizens across the province. She wishes more British Columbians could see her part of the province.

“When you look at it on a map, it doesn’t look like all that big deal. But when you actually stand on the ground and look at it, it is a big deal,” she says.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.