The Site C dam has lived many lives before its approval today by Premier John Horgan, from a twinkle in the eye of some BC Hydro engineers, to the target of multiple lawsuits, to two damning reports by the utilities regulator, to “the point of no return.”

Below, we’ve collected a few of the key moments in its life up to now.

• 1971: B.C. Hydro begins engineering feasibility studies for a potential third dam on the Peace River
• 1976: B.C. Hydro concludes that Site C, just upstream of Taylor, B.C., is the most feasible of the options on the table
• July 1980: B.C. Hydro releases an environmental impact statement, estimating the project might be completed by 1987 at the earliest; it also forecasts growth in power demand of 5.9 per cent for the following decade.
• Feb 13, 1981: The Globe and Mail reports that BC Hydro has applied for a water license to build Site C, then projected to cost $5.1 billion in 2017 dollars.
• May 3, 1983: BC Utilities Commission (BCUC) recommends against the project in a 315-page report, calling the utility’s demand forecasts “unreliable.”
• September 18, 1989: B.C. Hydro quietly revives Site C plan.
• November 30, 1993: BC Hydro CEO Marc Eliesen says, “Site C is dead for two reasons,” “The fiscal exposure is too great … the dam is too costly. Also it is environmentally unacceptable.”
• April 19, 2010: Premier Gordon Campbell announces the government is instructing BC Hydro to proceed with Site C. Cost is estimated at between $5 and $6.6 billion, though Campbell acknowledges the estimate is uncertain and based on old numbers. John Horgan, then energy critic for the NDP, tells the Vancouver Sun he believes the dam is unnecessary.
• May 17, 2011: Estimate of Site C cost pegged at $7.9 billion.
• May 18, 2011: John Horgan tells The Globe and Mail “The environment assessment process appears to be a sham.”
• August 2011: Environmental review begins.
• August 2013: Joint Review Panel (JRP) established to assess Site C for federal and provincial governments.
• October 14, 2014: Three-year environmental assessment complete. JRP concludes that Site C’s energy is not needed in the timeframe presented by BC Hydro. It recommends BCUC review Site C’s cost and alternatives. BC government ignores key JRP recommendations.

The Site C dam has lived many lives before its approval today by Premier John Horgan, from a twinkle in the eye of some BC Hydro engineers, to the target of multiple lawsuits, to two damning reports by the utilities regulator, to “the point of no return”. https://t.co/XxnUD4P68Z

— DeSmog Canada (@DeSmogCanada) December 12, 2017

• December 16, 2014: Site C receives provincial government approval. Cost now pegged at $8.8 billion.
• July 2015: Construction begins despite pending court cases launched by First Nations and Peace Valley landowners.
• January 2016: Premier Christy Clark vows to push Site C past the “point of no return.”
• January 23, 2017: Federal Court of Appeal dismisses lawsuit from West Moberly and Prophet River First Nations. Question of whether Site C violates treaty rights has still not been tested in the courts.
• May 9, 2017: NDP wins enough seats to form government, contingent on Green Party support. Green Party leader Andrew Weaver expresses strong opposition to Site C while Horgan declines to take a position, repeating a campaign promise to send project for independent BCUC review.
• May 15, 2017: Project has spent $1.75 billion.
• November 1, 2017: BCUC delivers its report saying Site C behind schedule and over budget, and power not likely to be needed. Says cost may exceed $10 billion.
• November 30, 2017: Expert panel briefs NDP government on Site C.
• December 11, 2017: NDP government greenlights Site C dam. Cost now pegged at $10.7 billion.
• December 11, 2017: Two Treaty 8 First Nations announce they will seek an injunction to stop work on Site C and will launch a lawsuit in BC Supreme Court on the grounds that Site C violates treaty rights.

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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

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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.