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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Authorizations allowing construction to begin immediately on the Site C dam on the Peace River in northeastern B.C. were issued on Tuesday by B.C.’s Ministry of Forests, Lands and Natural Resource Operations — despite a pending legal challenge by the Treaty 8 First Nations.

This Saturday, hundreds of people in canoes and kayaks will paddle down the Peace River to protest the imminent construction of the dam and flooding of the river.

The $8.8 billion Site C dam — the most expensive public project in B.C. history — was approved by the B.C. government in December. If built, the dam will flood more than 100 kilometres of the Peace River and its tributaries, drowning agricultural land that experts say could produce fruit and vegetables for one million people.

Since the government’s decision to move forward with the project, expert voices have come out of the woodwork to speak out against the project.

Last week, the Greater Vancouver Regional District Board, representing 23 local governments and 2.5 million people, voted to ask Premier Christy Clark for a two-year moratorium on Site C. The board joins more than 30 other B.C. municipalities calling for a moratorium on the project.

“This permitting decision shows the provincial government’s disdain for B.C. ratepayers,” said Rob Botterell,  general counsel to the Peace Valley Landowner Association.  “BC Hydro’s own analysis shows that a two-year delay will save B.C. ratepayers about $200 million.  Who benefits from the urgency to construct Site C? Certainly not those of us paying the tab."

Dam Construction Will 'Indefinitely Scar' B.C.'s Relationship with First Nations

The First Nations Leadership Council recently said moving forward with the dam before the Treaty 8 legal challenge has been heard on July 20th will “indefinitely scar” B.C.’s relationship with First Nations.

This spring, energy economist Robert McCullough said that BC Hydro has dramatically underestimated the cost of producing power from Site C and that far cheaper energy alternatives are available.

Harry Swain, chair of the panel that examined Site C for the federal and provincial governments, has called the failure of the B.C. government to investigate alternatives to the dam a “dereliction of duty.” His criticism of the B.C. government's actions was called “unprecedented” by environmental law experts.

The cost of renewable alternatives have plummeted in cost in recent years and Site C’s business case assumptions are two to five years out of date. The Canadian Geothermal Energy Association says geothermal can meet all of B.C.'s future energy needs at a lower cost than Site C with fewer environmental impacts.

Despite growing opposition from experts, BC Hydro released polling on Tuesday indicating that support for the dam has increased amongst British Columbians.

The Abacus Data poll shows 59 per cent of those polled support building the Site C dam, while 22 per cent support the dam under certain circumstances. Seventeen per cent are opposed. Province-wide awareness of the Site C dam has increased significantly: 75 per cent of British Columbians surveyed are aware of Site C now, compared to 41 per cent in 2013.

The B.C. government says Site C will provide approximately 10,000 direct jobs during construction and will generate enough electricity to power about 450,000 homes per year.

However, the panel that reviewed BC Hydro’s application to build the dam found demand for the power had not been proven on the timeline provided and called for an independent review of costs by the B.C. Utilities Commission — a call the B.C. government has ignored.

Early indications are that some of Site C’s power will be used to power natural gas operations in northeast B.C. For at least the first four years, demand for the power will be insufficient so a portion will be exported at a projected loss of $800 million.

Photo: This section of the Peace River will be flooded if the Site C dam is built.

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The Peace Valley Landowner Association has served a petition for judicial review asking the B.C. Supreme Court to quash the provincial environmental assessment certificate granted Oct. 14 to BC Hydro to build the $8 billion Site C dam.

Lawyer Maegan Giltrow says that in granting the environmental certificate, the ministers of Environment and of Forests, Lands and Natural Resource Operations failed to consider the joint review panel’s assessment of the economics of the Site C project.

“Not only was the joint review panel required by law to make recommendations about cost … but the ministers were bound by law to consider those recommendations,” Giltrow said. “This goes to the core of whether the certificate should be issued.”

Assessing the economic impacts of the project was explicitly included in the scope of the joint review panel’s review, but the province ignored the panel’s recommendations on that topic, stating they were outside of the panel’s scope.

“These are not questions for another time,” Giltrow said. “Before granting the certificate, the ministers were bound to consider and weigh the whole picture.”

Questions about the economics of the Site C dam include the cost of construction, the value of the electricity, the impact on rates and alternatives to the project. In rendering its recommendations, the panel noted that Site C would likely be “the largest provincial public expenditure of the next 20 years.”

The panel found that the need for the project was not established on the timeline provided and said it didn’t have the time or resources to analyze the costs of the project. It recommended that the costs be examined by the independent B.C. Utilities Commission, which the B.C. government has subsequently refused to do.

Calling the environmental approvals “seriously flawed,” Peace Valley farmer Ken Boon told a press conference in Vancouver on Wednesday that local residents and First Nations have already received a 90-day start work notice from BC Hydro.

“We trust that the government will ensure that no work will be started while the judicial review runs its course,” he said.

The panel found that energy from Site C wouldn't be needed until 2028 at the earliest.

Boon is president of the Peace Valley Landowner Association, which has 54 members — including farmers, ranchers, oilfield workers and teachers — who are impacted by the proposed Site C dam. The landowners' case is detailed in a backgrounder on the petition for a judicial review of the Site C dam.

“Our members, many of whom have lived in the Peace River Valley for generations, are not prepared to allow the remainder of the valley to be destroyed on the basis of flawed environmental approvals,” Boon said. “We are also B.C. ratepayers and taxpayers who are deeply concerned about the cost and impact of this project on BC Hydro rates and the provincial debt.” 

Third-generation rancher Renee Ardill told the press conference that the government chose to ignore the parts of the joint review panel’s report that it didn’t like.

“It’s very, very poor business. Any one with any common sense at all would want a proper financial review before a project like this proceeds,” Ardill said.

Ranchers Renee and Dick Ardill at their Peace Valley ranch, which will be flooded if the Site C dam is built. Credit: Don Hoffmann.

The panel’s report, issued in early May, said: “Justification must rest on an unambiguous need for the power and analyses showing its financial costs being sufficiently attractive as to make tolerable the bearing of substantial environmental, social and other costs.”

The landowners argue that justification has not been achieved.

“Site C is a costly, archaic and destructive project that has been kicked around for nearly 40 years and has been turned down twice,” Boon said.

If built, the Site C dam would be the third dam on the Peace River.

The provincial government has three weeks to file a response to the landowners' petition and then a court date will be set.

Next week, the landowners will serve a similar petition to the federal court, asking it to quash the federal environmental assessment certificate.

The West Moberly First Nation is also expected to file a petition for judicial review of the Site C dam's environmental assessment certificate.

Read more in DeSmog Canada’s 12-part series on the Site C dam.

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