The NDP government’s arithmetic on Site C cancellation costs is “deeply flawed,” has “no logic at all,” and is “appalling,” according to three project financing experts.

Eoin Finn, a retired partner of KPMG, one of the world’s largest auditing firms, said Premier John Horgan’s claim that terminating Site C would result in an almost immediate 12 per cent hydro rate hike is the “worst rationale I’ve heard since ‘the dog ate my homework’” excuse.  

“I expected better when the new government came in,” said Finn. “They’ve just continued what [former premier] Christy Clark did to hide the true costs of Site C and hope that they get re-elected before the next generation finds out.”

“This is the stupidest capital decision ever made by a B.C. premier. I don’t know who is giving them accounting advice.”

Rob Botterell, legal counsel for the Peace Valley Landowner Association, representing 70 landowners who will lose homes and property to the Site C dam, called on the NDP government to disclose who advised Cabinet on hydro rate increases in the event that Site C were terminated.

“We call on you and your colleagues in Cabinet and Caucus to publicly release the detailed, un-redacted, information and advice and analysis on which you based this finding,” Botterell wrote to Attorney General David Eby and Environment Minister George Heyman.

On Thursday, the landowner association and the Peace Valley Environment Association hand-delivered a letter to B.C. Auditor General Carol Bellringer, asking her to launch an “urgent examination” of the government’s Site C termination and completion cost figures.

The letter also asked Bellringer to verify the cash impact of both scenarios on British Columbians.

The Auditor General’s office was in the midst of investigating Site C’s finances last summer when the new NDP government asked the watchdog B.C. Utilities Commission to review the project, which will flood the traditional homeland of Treaty 8 First Nations, violate basic human rights, force farming and ranching families from their homes, and destroy critical habitat for rare and endangered species.

The BCUC review disclosed that Site C is over budget, behind schedule, beset with geotechnical issues and embroiled in legal and financial challenges with its main civil works contractor, which lost its Canadian partner earlier this year when Petrowest Corporation slid into receivership.

NDP Not Following Standard Accounting Practices, Experts Say

Horgan told reporters Monday that the only recourse if Site C were cancelled would be to hit BC Hydro customers almost immediately with a 12 per cent rate increase to cover the project’s $2.1 billion in sunk costs and $1.8 billion in reclamation costs.

But Finn, along with U.S. energy economist Robert McCullough and Harry Swain, a retired bank president with expertise in project financing, told DeSmog Canada that standard accounting practice for utilities like BC Hydro is to write off the costs of a discontinued project over many years.

“What’s appalling about this is that Cabinet has been advised by some people who simply don’t understand how the finance system works,” said Swain, the former CEO of Hambros Canada Inc. and a former board member of Hambros Bank Ltd. of London.

“I can’t believe that their arithmetic is that bad,” said Swain, who chaired the Joint Review Panel on Site C for the federal and provincial governments. “It’s all very depressing.”

McCullough, a former officer for a large hydroelectric facility in Portland, Oregon, said Site C’s sunk costs — mainly accrued as former Premier Christy Clark attempted to push the project past the “point of no return” — can be amortized over the 70 years that Site C was expected to produce electricity, in keeping with standard procedure for North American utilities.

“Ratepayers should not be punished for the utility making the correct policy decision, and nor would they be in any normal circumstance,” said McCullough, who was hired by the Peace Valley Landowner Association to provide expert testimony for the BCUC review.

“It’s not at all unusual for a project to stop and start for good reason,” McCullough said, adding that one common reason for terminating an energy project is a change in policy.

Swain said Site C’s sunk costs could be paid off over 30 years “without any heavy breathing at all.”

Finn called the government’s claim that terminating Site C would immediately incur up to $150 million a year in new debt service charges “pure financial fiction,” pointing out that BC Hydro has already borrowed the money and is paying interest on it so cancelling Site C will not make any difference.

“What’s appalling about this is that Cabinet has been advised by some people who simply don’t understand how the finance system works.” https://t.co/ExRvtuoFKn

— DeSmog Canada (@DeSmogCanada) December 15, 2017

What About Site C’s Reclamation Costs?

McCullough said the reclamation costs could be dealt with swiftly if the government declared the disturbed area of the Peace River Valley a park, making it a provincial asset and removing remediation costs from Site C’s books.

The cost of remediating the valley area already disturbed by clear cutting and bull-dozing for Site C is a matter of contention.

West Moberly First Nations chief Roland Willson has said the NDP’s stated $1.8 billion reclamation cost is greatly exaggerated. He urged BC Hydro and the government to make Site C’s construction site safe and “go home,” allowing natural regeneration of the boreal forest.

Even assuming that $1.8 billion in reclamation costs is factored into the equation, cancelling Site C will result in a 4.9 per cent hydro rate hike starting in 2024, McCullough said.

But that compares very favourably to the 12.4 per cent rate hike that will hit hydro customers that same year if Site C continues, he pointed out.

And that’s top of 30 per cent hydro rate increases already projected by the NDP government over the next 10 years, and also assuming that Site C’s cost does not escalate further.

Site C was announced as a $6.6 billion project in 2010. The price tag jumped to $7.9 billion by 2013, then to $8.8 billion in 2014.

On Monday, the NDP government revealed that the cost has soared to $10.7 billion just two years into a nine-year construction schedule, raising questions about whether Site C will become a boondoggle like Labrador’s Muskrat Falls dam, which will add an average $1,800 to the annual hydro bills of every household in that province.

What Happened to That Independent BCUC Oversight?

The NDP continues to criticize the former Liberal government for failing to send Site C to the BCUC for review before it decided to proceed with the Peace River project.

Yet, according to the three project financing experts, Cabinet neglected to follow proper procedure and allow the BCUC — an independent regulator that makes decisions based on the best financial interests of hydro customers — to decide how Site C’s termination costs could be best distributed to avoid a rate shock.

Swain called the matter an “ordinary regulatory decision,” while Finn said it is “not the government’s business” to decide how Site C’s termination costs would be allocated.

“The government has no right to make that judgment,” said Finn, adding that the only way Cabinet can override BCUC oversight is to pass an Order in Council.

“They’re side-stepping the legal obligation under the Utilities Act to involve the BCUC. They never asked the B.C. Utilities Commission.”

Horgan’s office confirmed to DeSmog Canada on Thursday that Cabinet did not pass an Order in Council.

In puzzling logic, Eby said in a public statement on Thursday that the recovery period for Site C’s costs would only be subject to an independent BCUC review “if, and when these costs are incurred,” meaning that the BCUC would only be able to make that decision after Cabinet decided to cancel Site C.

McCullough, whose testimony to a U.S. Senate Committee helped spark the criminal investigation into Enron, said recovery of an energy project’s termination cost is “a very common practice in the utility business and is addressed in every utility’s annual report.”

What About B.C.’s Credit Rating?

McCullough also pointed out that B.C.’s triple A credit rating has just been confirmed.

Contrary to statements made by the NDP, cancelling Site C does not put the province’s credit rating in jeopardy because Site C’s sunk costs have already been financed with 30-year bonds, he said.

On the other hand, spending at least $8 billion more to complete Site C when its power can be replaced for only $4 billion, “may concern the bond raters,” McCullough wrote in a December 11 memorandum for the landowner association.

He pointed out that the same issue was a factor in the downgrading of Newfoundland and Manitoba’s credit ratings as both provinces grappled with huge cost overruns on large hydro dam projects.

“Even if the inflated $1.8 billion in termination costs are added, cancelling Site C will save ratepayers at least $266 million [a] year or $123 [per] household in 2024,” McCullough wrote in comments the landowner association submitted to Bellringer’s office.

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 independent review of the Site C hydro dam was pegged as the solution to a long and bitter battle over the fate of the $9 billion project championed by B.C.’s former Liberal government.

The bombshell review gave the new NDP government plenty of new ammunition to terminate Site C, which would flood the traditional homeland of Treaty 8 First Nations in the Peace River Valley and destroy dozens of designated heritage and archeological sites, including indigenous burial grounds.

But at the eleventh hour, with a final Site C decision expected as early as next week, the government seems poised to green light the project in the face of pressure from unlikely bedfellows that include construction trade unions, NDP party insiders, Liberal MLAs and BC Hydro.

Dozens of Peace valley families wait on tenterhooks to find out before Christmas if they will lose homes, property and up to 12,500 hectares of valley farmland to the dam’s reservoir, which would flood 83 kilometres of the heritage Peace River and 45 kilometres of its tributary rivers and creeks.

“It’s tense,” said Ken Boon, president of the Peace Valley Landowner Association, which has been fighting Site C since 2010, when the former Liberal government announced it would proceed with the dam, then billed as a $6.6 billion project.

“Everybody’s trying to read the tea leaves.”

The independent review by the watchdog B.C. Utilities Commission revealed in November that Site C is already behind schedule and over budget, troubled by financial and legal issues with its major civil works contractor, and beset with unresolved geotechnical problems — only two years into a nine- year construction timeline.

The review also disclosed that BC Hydro customers could receive a Site C bill for more than $10 billion to produce electricity that could be generated more cheaply by other clean energy sources such as wind and geothermal.

“To me, it’s a slam dunk,” former BC Hydro CEO and President Marc Eliesen told DeSmog Canada.

“What the commission has come forward with in terms of their recommendations are such that no sensible, rational person could take any other decision than to terminate Site C,” said Eliesen, who is also the former Chair and CEO of Ontario Hydro and the former Chair of Manitoba Hydro.

Eliesen said he watched recent efforts by the Allied Hydro Council and others to discredit some of the BCUC findings with considerable dismay.

“I’ll be totally frank with you, and I hope I’m 100 per cent wrong, but I don’t think so.

I believe the fix is in and the government will continue the construction of Site C.”

A Political Bargaining Chip for the Greens?

How much the B.C. Green Party — whose three MLAs could tip the balance of power in a minority government — is willing to risk its political future to bring down the government over Site C is now a multi- billion- dollar question.

Veteran political observer Martyn Brown, who was former Premier Gordon Campbell’s chief of staff, said the Greens won’t topple the government over Site C because they have their eye on the big prize of proportional representation to replace B.C.’s first-past-the-post political system.

Site C does not require legislative approval to proceed, but the Greens could threaten to bring down the government on a vote of non-confidence on the next provincial budget if the NDP supports the project.

“I don’t think there’s a snowball’s chance in hell that they’d vote against the NDP if the NDP goes forward with Site C,” Brown said in an interview.

“They’re banking on the fact that, if the NDP approves Site C, they will campaign in the next provincial election in 2021 saying we’re the only ones that will stand up for the environment and we’re the only ones that opposed Site C. It gives them a wedge issue in 2021.”

Site C Approval ‘Beginning of the End’ for NDP/Greens, Says First Nations Leader

Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs (UBCIC), warned that allowing Site C to proceed would reap serious political consequences not just for the NDP but also for the Greens.

“In the event that the NDP caves into pressure from the trade union movement it will do irreparable damage to their political credibility and will pretty much represent the beginning of the end of future support for the NDP in the province of British Columbia,” Phillip said in an interview.

The UBCIC launched an “Anyone But Christy” campaign during the provincial election last spring, urging people to vote for the NDP or the Green Party and pointing to what it called former Premier Christy Clark’s “obsessive pursuit” of large scale resource development projects that are environmentally damaging and harmful to First Nations.

The Assembly of First Nations and B.C.’s First Nations Summit also oppose Site C on the grounds that it is unconstitutional and violates Canada’s commitment to the UN Declaration on the Rights of Indigenous Peoples.

Calling the impending Site C decision a “watershed moment” for the province, Phillip emphasized that Site C is a “much broader issue than indigenous peoples’ rights and interests and the application of the UN Declaration on the Rights of Indigenous Peoples.”

The majority of British Columbians supported the NDP and the Greens in the last provincial election hoping to stop “both the Site C dam and the Kinder Morgan TransMountain pipeline project,” Phillip said.

“Clearly the BCUC report revealed that this BC Liberal sponsored Site C dam project is indeed a colossal boondoggle in terms of its viability.”

Phillip also cautioned that the question of whether Site C violates treaty rights has not yet been tested in the courts.

Two Treaty 8 First Nations, the West Moberly First Nations and the Prophet River First Nations, warned the NDP government recently that it will face a billion dollar lawsuit over treaty violations if Site C proceeds.

The Blueberry River First Nations has already launched a lawsuit in B.C. Supreme Court suing the Province for breaching Treaty 8 due to rampant industrial development, including Site C, that means members can no longer practice their traditional way of life.

Asked about Phillip’s comments, BC Green Party leader Andrew Weaver said in a written statement that his party continues “to do everything we can to push the NDP government to cancel Site C,” noting that the BCUC review “presents ample evidence that shows that cancelling Site C is the right decision for British Columbians.”

A former BC Hydro chair says “the fix is in” on #SiteC https://t.co/NpW4az7OPx

— DeSmog Canada (@DeSmogCanada) December 1, 2017

Nature of the Attacks on the BCUC Report

Questions about the credibility of the BCUC report centre largely on two issues — the need for Site C’s electricity and how $2 billion in sunk costs and an estimated $1.8 billion in remediation costs would affect hydro rates.

Most of the sunk costs were amassed as former Premier Christy Clark attempted to push Site C “past the point of return,” a move questioned by Crown corporation experts who suggested the relationship between BC Hydro and the former Premier’s office was too cosy for good governance.

Eliesen and other energy experts, including U.S. energy economist Robert McCullough, said Site C’s sunk costs could be amortized over many decades to avoid the ten per cent rate hike brandished by project supporters as a primary reason to continue with Site C, which Eliesen called “utter nonsense.”

Rate hikes will be considerably higher if Site C proceeds because most of its rising cost is not yet on hydro’s books, the experts warn, pointing to the Muskrat Falls dam as an example.

In Newfoundland and Labrador, huge cost overruns at the $12.7 billion Muskrat Falls dam will add an average $1,800 to the annual hydro bill of every household even though the dam’s electricity is not needed in the province.

The Allied Hydro Council, representing construction trade unions that have donated generously to the NDP, claimed that Site C’s electricity will be needed to fuel electric vehicles, among other uses.

The same assertion was also made by Clark in her post-election flip-flop about the need for Site C’s power, which the BC Liberals first said would go to California, then to LNG plants, and then possibly to Alberta to offset coal-fired power.

But Eliesen dismissed the electric vehicle claim outright, pointing out that the BCUC considered future energy needs in its deliberations, including from electric vehicles, after receiving testimony from dozens of energy experts.

Eliesen also observed that an energy expert who came out swinging for Site C last week on behalf of construction trade unions did not present testimony to the BCUC for scrutiny, choosing instead to present his views directly to the media at a well-attended press conference.

At the press conference, energy expert and lawyer Jim Quail said that Site C would be needed to “keep the lights on” in B.C., a claim also made by Clark during the spring election campaign and debunked by Eliesen and others, who said it has no factual basis whatsoever.

“It is beyond me,” said Eliesen. “I’m totally shocked and surprised by what is taking place giving this very incredible, brilliant report presented by an independent regulatory commission who worked exceptionally hard in a limited timeframe to provide the kind of evidence that no-one was aware of.”

Harry Swain, chair of the Joint Review Panel that examined Site C for the provincial and federal governments, also said he is floored by continuing attacks on the credibility of the BCUC report, including a letter that deputy finance and energy ministers sent to the commission questioning its findings.

“When the entrenched bureaucracy tried in a snarky letter to poke holes in their work, BCUC replied with an absolutely solid demonstration that the officials hadn’t even read the report,” said Swain.

“The language is careful, measured, non-inflammatory, and it just demonstrates that either the officials hadn’t read anything at all or they were trying their best to discredit the solid work of the utilities commission. It’s quite disgraceful.”

Swain broke convention and began to speak out against Site C in 2015 after he said the former BC Liberal government “cherry picked” key conclusions from the panel he chaired, taking them out of context and using them to justify the project.

The panel concluded that B.C. did not need Site C’s energy in the timeframe presented by BC Hydro.

The BCUC report also disclosed that BC Hydro has been systematically over estimating energy demand, an issue previously highlighted by the Commercial Energy Consumers Association of B.C.  

B.C. has such a glut of electricity that BC Hydro pays independent power producers not to produce electricity.

Swain said new generation capacity can be built if and when demand emerges.

“We have other sources available to us and a $10 to $12 billion dollar investment in new capacity that won’t be needed for at least 20 years is the height of fiscal foolishness. In love, in life and in finance, timing is everything.”

Site C economics have always been “crazy” said Swain, “and with each succeeding bit of news over the last several years they have just become worse and worse.”

Brown also said all indications are that the NDP will approve Site C. “I think there’s very little chance that they’ll stop it given the $4 billion it would cost in sunk costs and the remediation costs to cancel it.”

He said the NDP is banking that Site C will be a “distant issue” in four years when voters return to the polls. “Those people that want to see Site C terminated will still rather have an NDP government than a Liberal government.”

“There will be a very, very angry contingent, I don’t want to diminish that,” said Brown. “It will put new pressure on the NDP to be environmentally conscious in other areas and it will especially ramp up the debate on Kinder Morgan.”

Eliesen said the BCUC report, coupled with the lessons learned from the unfolding Muskrat Falls fiasco, show that continuing with Site C “is such a calamity that you will have a white elephant.”

“If we continue, you’re going to have the same kind of thing taking place x number of years from now which is taking place in Newfoundland where a judicial inquiry is taking place,” said Eliesen. “What went wrong and why did it go wrong?”

“My point is if you don’t fix it you own it. And if the NDP continue with it they will own it.”

Image: B.C. Premier John Horgan. Photo 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.

A much-anticipated preliminary report from B.C. Utilities Commission (BCUC) has raised numerous questions about the Site C dam, underlined the extent of missing and out-dated information and pointed out unknowns surrounding the largest and most expensive infrastructure project in B.C.

The 205-page report on the economic viability of the $8.8 billion dam was released only hours before the midnight Wednesday deadline, reflecting the tight timeframe given the panel of commissioners when the NDP government referred the controversial project to the utilities commission in early August.

The utilities commission is the independent body responsible for overseeing BC Hydro and ICBC, both crown corporations that use public funds. However, former premier Christy Clark decided to go ahead with the $8.8-billion plan to build a third dam on the Peace River without a review by the utilities commission.

That means the current review is the first-ever independent examination of the costs and demand for the project. Ohhhh, the anticipation!

However, let us warn you: the preliminary report asks a lot of questions, but draws no final conclusions.

The commission will issue its final report Nov. 1 and it will then be up to government to decide whether to forge ahead, mothball or scrap the project.

For now, the BCUC found the project is on time and on budget for its 2024 completion date and could start producing power one year early, but it is uncertain whether that will continue.

So far, $2.1 billion has been spent on the dam and abandoning the project would cost another $1.1 billion, but that does not include the cost of replacing the power that Site C would generate.

In the case you don't want to plough through 205 pages, we’ve answered five burning questions about the preliminary report.

What is the bottom line?

It is not yet possible to say whether the dam can be completed on time and on budget and whether alternative power sources can provide similar power at a lower cost — which are among questions the commission has been asked by government to answer.

The problem is that, despite a 900-page submission to the commission from BC Hydro, numerous gaps remain and BCUC has posed 73 questions to BC Hydro that need to be answered before decisions are made.

The questions range from an assessment of whether a vital river diversion will go ahead by 2019 (a delay will set back the entire schedule by a year) and why power for several LNG projects are included in BC Hydro’s forecast, to how it has calculated the cost of supplying wind, solar and geothermal power and, with alternative energy costs dropping, why some figures are way out of date.

Those questions mean BC Hydro will have to come up with an entirely new document, according to West Coast energy consultant Robert McCullough, who made a submission to the BCUC on behalf of the Peace Valley Landowner Association and Peace Valley Environment Association.

“They have been pretty much asked to re-file their entire justification and that is a tremendous job,” said McCullough, who is not confident that BC Hydro can come up with all the answers in the short time frame.

“Frankly, at the moment, they might be better off not answering the questions or hoping the political process will bale them out,” McCullough said.

BC Hydro did not respond to DeSmog Canada’s questions.

Does that mean that BCUC might not be able to answer government’s questions by November 1?

Not according to BCUC chair David Morton, who said, in an e-mailed response to questions from DeSmog Canada, that he is confident the panel will be able to give its final report on time.

“Some of the questions are complex and there are inherent uncertainties, such as load forecasting, the economy going forward, possible fuel switching from natural gas to electric, uptake on electric vehicles, the cost of alternative energy sources and so on,” he said.

That means some answers might give a range of possibilities and, in that case, the panel will explain the assumptions and the cost implications for each scenario, Morton said.

Harry Swain, who headed the joint federal-provincial government review of Site C, is impressed at the depth of questions being pursued by BCUC.

“The utilities commission is doing a better job than I thought they might,” he said.

However, sticking to the terms of reference given by government is a problem, according to Swain.

“They are relying on BC Hydro’s 2016 load forecast and, if that is wrong, as I have argued all along, the rest falls by the roadside,” he said.

What That 205-Page BCUC Report on the Site C Dam Actually Said https://t.co/oisSthmJdM #bcpoli #SiteC #hydro @LavoieJudith @BCUtilitiesCom pic.twitter.com/2mBJgeXfoN

— DeSmog Canada (@DeSmogCanada) September 22, 2017

Is this report critical of BC Hydro and the information it has given — or not given?

That depends on the viewpoint.

To Ken Boon, president of Peace Valley Landowner Association, who will be evicted from his home on the north bank of the Peace River if the dam goes ahead, the BCUC interim report amounts to an indictment of BC Hydro.

The report challenges most of BC Hydro’s justifications for the project going forward including power consumption, alternative power costs and financing, Boon said.

“This has truly got to be the beginning of the end for Site C. There is no doubt about it,” he said.

McCullough also believes the BCUC report amounts to intense criticism of BC Hydro.

“The document continuously criticized BC Hydro for failing to provide relevant and supportable materials,” he said.

“This is not the sort of reception you would like to see from a regulatory commission. In my experience, if this happened to me I would be seriously considering a new job offer.”

Swain is interested in how BC Hydro will respond to criticism as the submission appears to repeat what the utility has said all along, rather than coming up with new, concrete answers on load forecasts, over-estimation of power needs and financing assumptions.

“This game is far from over,” he said.

However, Morton said BC Hydro has worked hard on its submission and gaps in information are not surprising.

“It is typical in the BCUC’s review process for a panel to identify further information required to complete its findings. The panel appreciates the work BC Hydro has done to provide the initial submission and looks forward to receiving further information,” he said.

Once the additional information is filed will British Columbians have all the background information about Site C?

Not quite, some of BC Hydro’s information is being kept confidential as it is considered commercially sensitive.

“The panel found the approach to confidential information in the submissions reflects a reasonable balance between providing proper protection to commercially sensitive information while allowing some access with the appropriate safeguards,” Morton said.

But for McCullough, lack of transparency has been one of the major problems with Site C from the beginning.

Secrecy makes no sense as utilities share information with each other and sensitive information is usually covered by a simple confidentiality order, he said.

“No it’s not justified. It’s preposterous,” he said.

What happens next?

The BCUC will hold public hearings around the province starting in Vancouver on September 23 and ending in Victoria on October 11. First Nations input sessions will be held in four locations — Prince George, Fort St. John, Vancouver and Victoria — and experts will testify at technical presentation sessions.

“Now it is time for the public and First Nations to have their say,” said Energy and Mines Minister Michelle Mungall in an e-mailed response to questions

“Once we have the final report, government will consider the advice from the BCUC, along with environmental and First Nations considerations, and make a final decision on the future of Site C in a timely manner.”

Photo: Garth Lenz, Site C dam construction fall 2016.

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.

Karen Goodings avoids the Site C dam area on the Peace River because she finds it too heart-wrenching to look at the havoc caused by construction work, but, for the first time in years, she is now holding out hope that the $8.8-billion project will be scrapped.

“I want to see it permanently stopped and now I think there is enough information out there to talk about alternate sources of power that are more economical and less devastating,” said Goodings, a Peace River Regional District director.

Her optimism has been boosted by reports underlining financial uncertainties with Site C and emphasizing that B.C.’s power needs can be met by wind, geothermal and solar projects.

ICYMI: If Saskatchewan Can Build a Geothermal Power Plant, Why Can’t B.C.?

“I’ve not had a feeling that it was looking good for us until the Deloitte report came out, but now I think there is still an opportunity. Someone is going to listen,” she said.

A report by the auditing firm Deloitte LLP, requested by the B.C. Utilities Commission, looked at the economics of the controversial project and BC Hydro’s forecasts of electricity demand — and that information could be a game-changer, Goodings predicted.

Deloitte, which provides consulting services to government, found there were risks that the project could be delayed because of geotechnical and contractor problems and that, if a 2019 deadline for diverting the river was missed, it could add up to $1.8-billion to the cost.

Terminating #SiteC Dam, Building Alternatives Could Save BC Over $1B: Economist https://t.co/RwKoB8U5eX #bcpoli @SavePeaceValley

— DeSmog Canada (@DeSmogCanada) September 14, 2017

The study concluded it would be cheaper to cancel the project, at a cost of $1.2 billion, that to delay it at a cost of $1.4 billion.

The estimates join a separate April analysis conducted by researchers with UBC’s Program on Water Governance that found stopping Site C by this past June would have saved B.C. between $500 million and $1.65 billion.

Similar to UBC’s analysis, the Deloitte research also found that BC Hydro regularly overestimated demand for power by up to 31 per cent. Between 1964 and 2016, BC Hydro overestimated future electricity demand in B.C. 77 per cent of the time, according to the Deloitte report.

ICYMI: B.C. Scales Down Energy-Saving Measures to Manufacture Demand for Site C: UBC Report

The Utilities Commission is preparing to produce a preliminary Site C report by September 20 and, following a series of round-the-province hearings, will provide final recommendations to government in November.

In addition to the Deloitte report, a submission to the commission by renowned hydroelectric consultant Robert McCullough, who was contracted by the Peace Valley Landowner Association and Peace Valley Environment Association, concluded that renewables could meet B.C.’s power needs at a much lower cost than Site C.

Calls for construction to be halted were buoyed Wednesday when McCullough, in a review of Deloitte’s facts and figures, concluded that terminating Site C and building a renewable portfolio of wind and geothermal would save between $700 million and $1.6 billion.

There is no need for Site C to act as a back-up battery for times when wind and solar are unavailable as the Williston Reservoir already has that capacity, the review found.

“It is not financially prudent to finish the Site C project,” McCullough said at a Vancouver news conference.

“The cost of building a renewable-based portfolio excluding Site C will be much less costly and still meets the province of B.C.’s clean energy goals.”

McCullough was supported by Harry Swain, former chairman of the Site C Joint Review Panel, who said the findings provide solid proof of what experts have been saying for years.

“B.C. does not need this power and, even if we did, we have lots of less expensive alternatives,” Swain said.

The PVLA and PVEA are calling for an immediate end to “reckless spending” on the dam and Goodings is keeping her fingers crossed that the BCUC has enough information to recommend scrapping the project.

Her only disappointment is that BCUC members have not been able to accept an invitation to tour the entire area and, instead were shown the construction site by BC Hydro representatives.

Goodings, who, with Hudson’s Hope Mayor Gwen Johansson, sent an invitation to Utilities Commission panellists to tour the area, said she wanted to show them the surrounding farmland, wildlife habitat and Indigenous sites and how, with the construction, the surrounding land sloughs off.

“We’re not only going to lose what’s under the water, but also the land around it,” she said.

An abandoned cabin sits perched on the edge of a cliff created by unexpected sloughing along the banks of the Williston Reservoir, created by the W.A.C. Bennett Dam,  in 2008. Photo provided to DeSmog Canada by West Moberly First Nations Chief Roland Willson.

Goodings said, despite her disappointment, she understands the commission’s timelines are extremely tight.

Utilities Commission chairman David Morton said in an e-mailed statement that panel members and Deloitte representatives visited the construction site and the Highway 29 realignment area on August 10 and 11 and received a briefing from BC Hydro’s on-site team, but did not receive the invitation from Goodings and Johansson until later that month.

“This inquiry is working under an extremely tight timeline, so the panel was unable to schedule a second trip to the area,” Morton said.

The B.C. Utilities Commission is looking for feedback from as many British Columbians as possible during upcoming community and First Nations input sessions — including two in Fort St. John and one in Hudson’s Hope, he said.

Meanwhile, Goodings and her colleagues have invited Premier John Horgan and several ministers to come to the Peace River region, but have not yet had a reply.

“We were looking forward to sharing with BCUC a balanced view of the losses which have been minimized by BC Hydro throughout the joint review,” Goodings wrote in a letter to Horgan.

However, even if the ministers are not able to come to the Peace, area representatives are hoping to meet with them during the Union of B.C. Municipalities convention later this month, she said.

Image: Site C construction June 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.

B.C. won’t need more electricity for many years and, when that time comes, there are less expensive alternatives than the Site C dam, says a submission filed with the B.C. Utilities Commission on Monday by Harry Swain, the man who chaired the federal-provincial review panel of the project.

“Demand will not materialize at even the low limit of BC Hydro’s demand forecast,” Swain writes, as he cautions the commission from relying too heavily on BC Hydro’s forecasts.

“The issue is that BC Hydro’s 2016 load forecast is no more credible than its numerous predecessors,” Swain writes. 

Swain calls on the commission to “undertake its own research and analysis,” rather than simply adjudicating among submissions received during the review.

A United Nations report also released Monday called on the Canadian government to "immediately suspend" Site C dam construction due to "irreversible harm" to indigenous people.

The UN Committee on the Elimination of All Racial Discrimination said it was unacceptable for governments in Canada to force Indigenous peoples to pursue long and costly legal challenges as the only way to uphold rights the government is obligated to protect.

Swain has become an outspoken critic of the project since filing his panel’s 473-page report on the project in 2014.

“I think we’re making a big mistake, a very expensive one,” Swain told DeSmog Canada last year. “Of the $9 billion it will cost, at least $7 billion will never be returned. You and I as rate payers will end up paying $7 billion bucks for something we get nothing for.”

While many media outlets report that the joint review panel “approved” Site C, a careful reading of the report indicates they didn’t recommend for or against the project. Rather, the panel laid out the pros and cons of the project and made 50 recommendations to government. One of those recommendations was for the B.C. government to refer the project for review by the B.C. Utilities Commission because Swain’s panel didn’t have the time or resources to study the costs or demand for the project.

Fast forward three years and here we are with an expedited utilities commission review of the project finally underway.

In his submission, Swain asks the commission to consider BC Hydro’s consistent failure to accurately forecast electricity demand in B.C. for several decades.

“Despite its frequent claim that their methods are world-class and consistent with the Utilities Commission’s resource planning guidelines, the Authority has regularly overstated reality for the last quarter century and beyond,” Swain writes.

BREAKING … Pull Plug on #SiteC Dam if Completion Costs More than $2B: Former Chair of Review Panel https://t.co/p0SRfEkBn3 #bcpoli pic.twitter.com/UX40P3cN4Z

— DeSmog Canada (@DeSmogCanada) August 29, 2017

An April 2017 study from UBC’s Program on Water Governance found BC Hydro has over-forecast demand since the 1980s.

“Go back to 1981, then they were predicting that demand would double within 10 years. That’s why they argued for Site C at that point but 35 years later demand has still not reached the levels they were predicting,” Karen Bakker, the study’s co-author, told DeSmog Canada.

Swain urged the commission to consider the analysis by UBC.

LNG Dream No Longer

In addition to a patchy forecast history, Swain said the prospect of an LNG export industry in B.C., a potential major consumer of grid electricity, “has collapsed.”

“The previous government had great hopes for the rapid growth of an export LNG industry, but these appear to have been dashed for some years to come,” Swain writes.

Petronas recently cancelled its massive Pacific NorthWest LNG project, citing market conditions.

Swain says the BC Hydro forecast of sales of more than 2,000 GWh of power to the LNG industry are “simply not credible.”

“As this is 65 per cent of the production of Site C, it is highly material — just not believable,” Swain writes.

Commission Asked to Consider Small-Scale Renewable Energy

Swain notes that smaller renewable energy projects, such as wind, solar and geothermal, have the advantage of being built incrementally to meet demand. 

As it stands, Site C will operate at 100 per cent surplus in its initial years, causing electricity to be sold at a loss to other markets.

“The story of geothermal energy is well known to the commission, which advised BC Hydro to seriously examine the possibility when it turned down Site C in 1983,” Swain writes. “BC Hydro did not do so.”

According to BC Hydro’s own estimates, geothermal energy could provide up to 700 megawatts of power in the province.

“However, after 34 years, all the basic resource characterization and technology development has been left to the private sector,” Swain writes.

“The periodic claim that the technology is unproven is belied by routine operations in Italy, New Zealand, California, Alaska, Iceland, and elsewhere.”

Further to that, Swain questions why BC Hydro has scaled back conservation efforts.

“Conservation is the cheapest source of electricity. BC Hydro should ‘buy’ conservation up to the cost of new supply. Backing away from [demand side management] is evidence of their current confusion,” Swain wrote.

Where To Draw the Line

Swain writes that if the project relies solely on spot market sales for its first 20 years, and spot prices continue at current levels, the 2024 net value of the project would be about $2 billion.

“Solely from a financial point of view, unless the cost to complete is less than $2 billion, the project should be cancelled immediately and the landscape restored to a sustainable shape,” Swain writes. “The Flood Reserve of 1957 should be rescinded, and expropriated properties returned with no losses, broadly considered, to their owners.”

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.

The controversial $9 billion Site C dam project will be sent for immediate review with the B.C. Utilities Commission if NDP Leader John Horgan becomes B.C.’s premier, according to a landmark agreement between the NDP and Greens.

The agreement outlines the terms of a power-sharing agreement as well as a path forward on key election issues, including the future of the Site C dam.

The agreement sets out a requirement to “immediately refer the Site C construction project to the B.C. Utilities Commission” to investigate the economic viability and consequences of the project for British Columbians.

During the election campaign the Greens vowed to stop the Site C project outright while the NDP committed to send the project for independent review by the B.C. Utilities Commission, a body designed to regulate BC Hydro and electricity rates. The B.C. Liberals exempted Site C from utilities commission scrutiny.

At a joint press conference Tuesday, Green Party Leader Andrew Weaver said he and his two fellow Green MLAs negotiated strongly with the NDP caucus on the fate of the Site C project.

“We came in there very strong on Site C,” Weaver said. “We did not take this lightly.”

The Greens pressured the soon-to-be government on the exact terms of their commitment to send the project for review, Weaver said.

“We got a response that frankly was the right response we were looking for.”

Premier Christy Clark, now facing an inevitable loss of confidence in the house, vowed to push the Site C project “past the point of no return” before the election.

In response to questions, Horgan said Site C construction will not be paused while the commission evaluates the project.

Weaver noted that although construction has not been stopped families facing eviction by B.C. Hydro have been granted an extension of time on their land.

“The Boons have not been evicted from their property,” Weaver said, referring to Ken and Arlene Boon, farmers leading the fight against Site C who were facing eviction at the end of May.

Horgan said his party’s plan for the Site C dam, which requires considering lower cost options for the public, paved the way for the historic NDP-Green power-sharing agreement.

“The draft document we shared with Andrew and his team, that was I think, the foundation for what allowed us to work forward together.”

The Site C dam is the most expensive public infrastructure project in B.C.’s history. The reservoir created by the dam will flood 107 kilometres of the Peace River, destroying thousands of hectares of prized agricultural land and unique ecosystems. It has been under construction for nearly two years in what is an eight-year construction timeline.

The Site C dam is the most environmentally destructive project ever considered under the federal Canadian Environmental Assessment Act, as detailed by the federal-provincial panel tasked with reviewing the project in 2013.

That panel, chaired by Harry Swain, did not make a recommendation for or against the project because the province had failed to both investigate alternatives, such as geothermal, and to demonstrate the need for the power Site C will generate.

In a previous interview with DeSmog Canada, Swain said, “there is no need for Site C.”

“If there was a need, we could meet it with a variety of other renewable and smaller scale sources.”

The panel called on B.C. to send the project to the B.C. Utilities Commission, but the province ignored that recommendation and decided to forge ahead with the project.

Image: Green Party Leader Andrew Weaver and NDP Leader John Horgan release a joint Supply and Confidence Agreement that calls for an immediate review of the Site C project, May 30, 2017. Photo: BC NDP 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.

In a sit-down video interview, former B.C. Premier Mike Harcourt told DeSmog Canada the Site C dam, proposed for the Peace River, is “a bad idea” and should be abandoned immediately.

“Site C is going to be a disaster economically, environmentally, culturally for First Nations and shouldn’t be built,” Harcourt said.

Site C, originally projected to cost B.C. ratepayers $5.5 billion, is now estimated to cost $9 billion.

Harcourt said Site C follows a long history of hydro project cost overruns.

“The average overage cost of dams worldwide over the last 70 years have averaged 90 per cent overage. So you can assume Site C is going to cost, probably, $15 billion to $17 billion dollars,” he said.

https://www.facebook.com/DesmogCanada/videos/1054438974661662/

“I think economically it’s just not going to cut it.”

The crux of Harcourt’s criticism of Site C, a project first proposed in the 1980s, is the lack of growth in electricity demand in the province.

Demand for electricity in B.C. has been flat over the last 11 years, Harcourt said.

“In that sense you don’t need it, there’s not the demand. Economically you’re going to be bankrupting BC Hydro and seriously harming the credit of British Columbia.”

That could deter businesses from operating in B.C., he said, all when there is no need for the power.

The lack of customers for Site C electricity was evidenced in Premier Christy Clark’s suggestion the power could be sold to Alberta to electrify the oilsands.

Harcourt said the idea is similar to the B.C. Liberal’s promise to create a liquefied natural gas empire..

“It’s like the LNG pipe dream,” he said.

“I haven’t heard any expression of interest from the Alberta government and the oilsands industry in doing that. And what would the cost of the transmission line be on top of the $15 billion to $17 billion that the dam would cost?

“It’s a weak version of field of dreams: build it and hope, hope, hope there will be a customer down the line.”

Possible to stop #SiteC like the 8-lane hwy once slated for NShore, #StanleyPark, #Gastown & #YVR #Chinatown https://t.co/1CCLxu3PKz #bcpoli pic.twitter.com/jTyb3H0GcE

— DeSmog Canada (@DeSmogCanada) March 3, 2017

Ongoing construction of Site C should be immediately halted, Harcourt said. “It’s never beyond the point of no return.”

He pointed to an analogous example from the 1960s, when Harcourt was a lawyer for the Chinese community in Vancouver’s Chinatown and Strathcona. At that time there was a plan to build an eight-lane freeway along Stanley Park and through the east side of downtown Vancouver.

“We stopped it cold. But we still had part of it built, the Georgia Viaducts, and now we’re tearing them  — at the cost of $200 million — that last part of that really bad idea.”

The Site C dam is 18 months into construction on what is projected to be an eight-year timeline. So far, a worker’s camp has been built and a small section of river valley has been cleared. Ultimately, more than 100 kilometres of river valley, including valuable farmland, will be cleared to make way for the dam’s reservoir.

“It’s not too late,” Harcourt said.

Harcourt joins Harry Swain, the chair of the provincial-federal panel that reviewed the Site C dam, and former BC Hydro CEO Marc Eliesen in criticizing the project.

The provincial NDP has vowed to send the dam for an independent review by the B.C. Utilities Commission if elected in May.  The B.C. Liberals exempted Site C from a utilities commission review and Premier Christy Clark has vowed to get the project “past the point of no return” before the May 9th election.

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.

Those are the words of Harry Swain, who chaired the review of the Site C dam, in an affidavit filed in federal court this week.

The BC Hydro Ratepayers Association is challenging the decision of the federal minister of Fisheries and Oceans to issue a permit authorizing destruction of fish habitat for the Site C dam on the basis that the minister neglected to assess the justification for the project.

Indeed, the justification for the project is the key sticking point for many British Columbians concerned about the economic consequences of building the $8.8 billion dam on the Peace River.

In new polling conducted by Insights West on behalf of DeSmog Canada, 73 per cent of British Columbians support sending the Site C dam for an independent review of both costs and demand.

“Hasn’t that already happened?” you might wonder. The short answer is no, because the BC Liberals exempted the most expensive public project in B.C. history from review by the B.C. Utilities Commission.

Even so, Swain’s panel insisted the project be reviewed by the utilities commission — which exists to ensure fair rates and that shareholders in public utilities are “afforded a reasonable opportunity to earn a fair return on their invested capital.” The province ignored that recommendation.

During rate design hearings this summer, the B.C. Utilities Commission learned that BC Hydro doesn’t plan to pay off the Site C dam until 70 years after it’s built — in 2094.

And that’s a best case scenario, if BC Hydro’s load forecasts turn out to be correct — despite being persistently wrong — and if the project comes in on budget, despite a 2014 Oxford University study that analyzed 245 large dam projects and found cost overruns were, on average, 96 per cent.

Why It's Not Too Late to Stop the #SiteC Dam https://t.co/InOKWatF2l #bcpoli #cdnpoli @christyclarkbc

— DeSmog Canada (@DeSmogCanada) November 25, 2016

One mustn’t look further than the Muskrat Falls hydroelectric dam in Labrador, which is now estimated to be $4 billion over its 2012 estimated cost and is projected to lead to an increase of $150 per month for every household’s electricity bill, to see the very real risk of overestimating demand and underestimating cost.

“The project is identical to Site C in the sense that the project went ahead without proper due diligence and the business case was not adequately undertaken and in a short period of time major changes took place which resulted in a phenomenal escalation of costs,” Marc Eliesen, former CEO of BC Hydro, told DeSmog Canada.

Which brings us back to the new polling. Seven in 10 respondents support pausing construction of Site C to investigate alternatives to meet future power demand.

While Premier Christy Clark has promised to get to “the point of no return” before the next election, survey results suggest British Columbians prefer taking a more measured approach.

“We’re not too late to either cancel or suspend Site C while a full and impartial, objective review is taken,” Eliesen said. “There have been a number of major hydro developments in Canada that were subsequently cancelled.”

Previous polls by BC Hydro have indicated broad support for the dam by using a question that references “increasing power demand” — despite the fact electricity demand was the same in 2015 as it was in 2005.

The new Insights West polling indicates that if demand for more power arises in the future, nine in ten British Columbians support investing in energy efficiency measures (92 per cent) and adding more wind, solar and geothermal power to the grid as needed (also 92 per cent). Just over a third (37 per cent) support building large hydro dams.

Given that nearly $9 billion of public money is at risk here, and the power isn’t needed for at least a decade, it seems prudent to give this mega project the review it should have received in the first place. 

Emma Gilchrist is executive director of DeSmog.ca, an online magazine focused on energy and environment. You can reach her at emma@desmog.ca

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.

British Columbians overwhelmingly want BC Hydro’s Site C dam sent for an independent review and support pausing construction on the $8.8 billion project while alternatives are investigated, according to a new poll conducted by Insights West.

The poll, sponsored by readers of DeSmog Canada, found that 73 per cent of British Columbians support sending the Site C dam for an independent review of both costs and demand, as recommended by the Joint Review Panel in its 2014 report.

Seven in 10 respondents supported pausing construction of Site C to investigate alternatives to meet future power demand.

“When pondering Site C, British Columbians are favouring caution and not hubris,” said Mario Canseco, vice president of public affairs at Insights West. “Most are willing to switch the focus to efficiency and alternative sources.”

Construction on the $8.8 billion Site C dam started in 2015 and is scheduled for completion in 2024. The project has been plagued by court challenges and questions about cost and demand from high-profile experts, including Harry Swain, the man who chaired the federal-provincial panel on Site C, and Marc Eliesen, who has been chair or CEO of BC Hydro, Manitoba Hydro and Ontario Hydro.

“What they’re doing with Site C is unprecedented in Canada,” Eliesen told DeSmog Canada. “You’ve never had a project in the billions of dollars run by a provincial utility go through without any review by the utilities board.”

Survey results suggest British Columbians prefer taking a more measured approach to the project, which Premier Christy Clark has promised to get to “the point of no return.”

“We’re not too late to either cancel or suspend Site C while a full and impartial, objective review is taken," Eliesen said. "There have been a number of major hydro developments in Canada that were subsequently cancelled when the forecasts that came out two to three years later were different than the ones used to justify the project."

Eliesen pointed to the Limestone Generating Station in Manitoba as an example. Work on that dam began in 1976, but was suspended in 1978 after electricity demand forecasts changed.

"From a business case, they realized it was stupid to go ahead building a station when at the end of the day they’d be left with a white elephant and they’d have to dump the results of that power, 1,400 megawatts, on the spot market. They would have lost their shirt and the ratepayers of Manitoba would have paid heavily for it," Eliesen said.

The project resumed in 1985 after a major firm contract was negotiated between Manitoba and Minnesota for 500 megawatts.

"Unless you do that in advance, then you’re going to have a white elephant because the cost of generating electricity is far more than any prices you can get on the spot market," Eliesen said.

"If BC Hydro wanted to do something on a major scale of building the station and exporting the power … they should have gone out and negotiated what is called a firm power contract."

That hasn't happened and BC Hydro has indicated that the province will not need new power until 2028 at the earliest. If demand for more power arises in the future, nine in ten British Columbians support investing in energy efficiency measures (92 per cent) and adding more wind, solar and geothermal power to the grid as needed (also 92 per cent). Just over a third (37 per cent) favour building large hydro dams.

The Joint Review Panel found the province had failed to investigate alternatives to building the Site C dam, such as geothermal energy. According to BC Hydro’s own estimates, geothermal could replace two-thirds of the power that could be generated by the Site C dam.

Seventy-seven per cent of British Columbians support investing in geothermal (40 per cent “strongly”) rather than building a large hydro dam.

The Insights West poll found more British Columbians outright oppose the Site C dam (44 per cent, 21 per cent strongly) than support it (39 per cent, 11 per cent strongly).

If Site C does go ahead, Eliesen says ratepayers will be in store for massive rate increases.

"It will destroy our ability to generate employment and jobs because the high electricity rates for commercial and small business," he said.

VIDEO: 70% of British Columbians Support Pausing #SiteC Dam Construction, New Poll Finds https://t.co/nKAqApyT8k #bcpoli #cdnpoli

— DeSmog Canada (@DeSmogCanada) November 16, 2016

Across the country, Newfoundand’s Muskrat Falls dam has garnered a lot of attention lately, as its cost has ballooned to $11.4 billion, up $4 billion since 2012.

For the average homeowner, it’s estimated this will add an extra $150 per month in power costs. The CEO of the province’s power corporation, Nalcor, has said power demand forecasts were off and the dam was not the right choice for the power needs of the province.

“The project is identical to Site C in the sense that the project went ahead without proper due diligence and the business case was not adequately undertaken and in a short period of time major changes took place which resulted in a phenomenal escalation of costs," Eliesen.

"Site C if it goes ahead it will go down as one big white elephant. Unfortunately the people who made that decision won’t be around in 2024 or 2026," he said.

"There is a window for that decision to be changed and it can be changed with the forthcoming election."

Adrian Dix, the NDP critic for BC Hydro, said the polling results came as no surprise.

"What is interesting is the difference between this poll and the ones sponsored by BC Hydro," Dix said. "It really shows that having accurate information about Site C makes a huge difference in people’s response."

Dix said the BC Liberals have exaggerated future demand to justify the project.

"Since then, all of the Liberals and BC Hydro’s estimates about future energy need have been proven to be massively in error," he told DeSmog Canada.  "The Liberals have recklessly gone ahead without evidence and have put all of us at risk — financial and otherwise."

Dix said the NDP sticks by its position that Site C must undergo an independent review.

The online study was conducted by Insights West from October 27 to October 30, 2016, among 821 adult residents of British Columbia. The data has been statistically weighted according to Canadian census figures for age, gender and region in British Columbia. The margin of error—which measures sample variability—is +/- 3.5 percentage points, nineteen times out of twenty.

View the data tabulations and the full report.

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.

There are a number of arguments against the controversial Site C dam, planned for the Peace River Valley: it floods First Nations land against their consent; it will destroy prized agricultural land; it requires expropriating land from B.C. families and farmers; it will increase the cost of electricity for power B.C. doesn’t even need.

A variety of experts have also come forward to say the project wasn’t properly reviewed and that the B.C. government failed to explore alternatives to the $9 billion project — the most expensive public infrastructure project in the province’s history.

But what are the arguments for the Site C dam? And do they have any merit?

DeSmog Canada’s Emma Gilchrist met with Harry Swain, the man appointed by the B.C. government to chair the joint review panel for Site C, to discuss some of the most commonly used arguments to justify the project.

Swain is one of the most qualified experts in the country to discuss the pros and cons of the Site C dam. Watch the video below for his take. *Update: This is a new cut of the video, after the first was subject to a complaint.

Swain explains the rationale for building the dam has shifted dramatically over time, calling into question the stated need for the project.

“They started of course by saying that Site C was necessary for ordinary domestic consumption,” Swain says. “It had nothing to do with LNG at all and then the story changed a little bit as they came to realize that demand from ordinary sources was not increasing very much — in fact at all.”

“And now third we’ve seen with the, shall we say charitably, the delay in the LNG industry and its possible lack of demand for grid electricity this interesting opening to Alberta.”

Last spring Christy Clark suggested power from the Site C dam could be used to electrify the Alberta oilsands.

“Selling power to Alberta for the oilsands is a bit of a Hail Mary play, I think,” Swain says.

“There is presently not the capacity to move it, you’d have to build a lot of new transmission. The power would not be as cheap as Alberta can manufacture itself, either from its own supplies of gas or from wind, which is a big deal on the prairies.”

“If it came about, it would merely lock in a big loss.”

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 new video released today by DeSmog Canada features an exclusive video interview with Harry Swain, chair of the federal-provincial panel tasked with reviewing the controversial Site C dam.

“I think we’re making a big mistake, a very expensive one,” Swain says in the video. “Of the $9 billion it will cost, at least $7 billion will never be returned. You and I as rate payers will end up paying $7 billion bucks for something we get nothing for."

Since 2005, domestic demand for electricity in B.C. has been essentially flat, making it difficult to justify the dam which will flood 107 kilometres of the Peace River and destroy thousands of hectares of prime agricultural land.  

“There is no need for Site C,” Swain says. “If there was a need, we could meet it with a variety of other renewable and smaller scale sources.”

With a price tag of $8.8 billion, Site C dam is the most expensive public infrastructure project in B.C.’s history. The joint review panel that Swain chaired found demand for the power had not been proven and called for the project to be reviewed by the B.C. Utilities Commission — a recommendation the B.C. government ignored.

Swain first spoke out about the Site C dam last year, but this is the first video interview on the subject with the former deputy minister of Indian and Northern Affairs. 

“The provinces have the responsibility for the management of natural resources. I don’t think British Columbia has done its job,” Swain says, referring to B.C.’s failure to investigate alternatives to the Site C dam.

EXCLUSIVE video: review chair says there's no need for #SiteC https://t.co/HWLbWAhNiJ #bcpoli @christyclarkbc pic.twitter.com/5Cc1pprN4t

— DeSmog Canada (@DeSmogCanada) June 21, 2016

Three Decades and Counting: How B.C. Has Failed to Investigate Alternatives to Site C Dam

Swain outlined the economic case against the dam in an opinion piece in the Vancouver Sun on Friday.

The new DeSmog Canada video also features interviews with residents of the Peace River Valley.  

“We have to get away from this 1960s mentality of building large hydroelectric dams,” says farmer Ken Boon. “All you have to do is look around the world. They’ve come to their senses. They’re tearing them out.”

School teacher and mother of three Carolyn Beam says it’s not possible for BC Hydro to compensate her family for the loss of their home.

“I’d hate to have to tell my children in the future why we lost what we lost,” Beam says.

Field of Dreams: Meet the Peace Valley’s Farmers and Ranchers

The Royal Society of Canada recently called on the Prime Minister to halt construction on the project until after First Nations concerns have been heard, but the feds are so far trying to side step the issue.

For construction to continue on the Site C dam, the federal government must issue permits. But Prime Minister Trudeau vowed to start a new relationship with Canada’s indigenous peoples and two First Nations are challenging the dam in court.

Trudeau also recently signed on to the UN Declaration on the Rights of Indigenous Peoples, which states indigenous peoples must give “free, prior and informed consent."

B.C. Premier Christy Clark has vowed to get the dam "past the point of no return."

Civil society organizations like Amnesty International, the David Suzuki Foundation and LeadNow are all calling on the federal government to halt construction.

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.