BC Hydro executives have mismanaged the Site C dam’s overall budget and cost control process, and they are “not capable” of accurate estimates or controlling costs on the $10.7 billion project, according to an affidavit filed this week by former BC Hydro CEO Marc Eliesen.

“The necessary experience and due diligence rigour required for managing a major hydro project such as Site C is deficient among the executive at BC Hydro,” says Eliesen in the affidavit, noting that it has been more than 30 years since BC Hydro constructed a major generating station.

“The knowledge and expertise required, which formerly resided in the company, has retired or moved on.”

The 30-page affidavit, filed in B.C. Supreme Court as part of a new legal case against Site C by two Treaty 8 First Nations, reads like a Site C dam financial WhoDunnit.

The question that comes to mind is: what did BC Hydro know and when did it know it?

Unpacking Site C’s escalating cost overruns in nail-biting detail, Eliesen quotes from statements that BC Hydro made to the B.C. Utilities Commission (BCUC) on August 30 that Site C was “on time and on budget,” and would cost $8.335 billion.

Just thirty-five days later, the affidavit notes that Chris O’Riley, BC Hydro’s president and chief operating officer, informed the BCUC that BC Hydro had encountered some “geological and construction challenges” and the project’s cost had climbed by $610 million — due to a one-year delay in meeting a scheduled diversion of the Peace River to build the dam structure.

At the same time, O’Riley informed the commission that Site C’s $440 million Treasury Board reserve had been exceeded by $170 million. That placed Site C’s revised price tag at close to $9 billion, only two years into a nine or ten-year construction project.

“It is my expert opinion that BC Hydro knew, or should have known, when the August 30th report was submitted to the BCUC, that the costs for the project were going to be higher than disclosed,” Eliesen says in his affidavit.

“If BC Hydro knew the costs were reasonably likely to be higher than disclosed, they violated their obligation to the commission to be fully transparent and support the commission’s inquiry. If BC Hydro honestly did not know at the time the August 30 filing took place that costs would escalate, then BC Hydro was not competently managing its project as it claimed.”

ICYMI: Site C Over Budget, Behind Schedule and Could Be Replaced by Alternatives: BCUC Report

A ‘paucity’ of information about $2 billion price jump

Eliesen, who is also the former chair and CEO of Ontario Hydro and the Manitoba Energy Authority, points out that O’Riley subsequently told the BCUC that “nothing has occurred that would suggest to us that we are facing the type of large overruns” speculated in a September 2017 report by Deloitte LLP, one of Canada’s leading auditing firms.

Deloitte concluded that Site C’s price tag could exceed $10 billion and might reach as high as $12.5 billion.

Yet less than two months after O’Riley’s statement, Premier John Horgan announced that Site C’s capital costs had escalated by another $2 billion, or 20 per cent.

Horgan set Site C’s new price tag at $10.7 billion when he said in December that the project would proceed, claiming it was past “the point of no return,” an assertion disputed by project financing experts.

“A paucity of information has been provided as to what has driven the additional $2 billion in project costs,” notes Eliesen.

“Clearly, the budget revision exercise that took place in November determined that the additional $2 billion in cost was warranted, while on October 14, 2017, Mr. O’Riley told the Commission that there would be no further budget increases.”

“Either BC Hydro knew, or should have known, about the looming budget increases related to future contracts.”

The average compensation for the top four executives at BC Hydro was $453,350 in 2015-2016.

This 30-page affidavit, filed in B.C. Supreme Court as part of a new legal case against Site C by two Treaty 8 First Nations, reads like a Site C dam financial WhoDunnit. https://t.co/5rM9jnmvsU

— DeSmog Canada (@DeSmogCanada) February 3, 2018

Trouble afoot with major Site C civil works contracts?

Five pages of Eliesen’s affidavit focus on major Site C contracts and on what BC Hydro knew about the performance ability of two of the corporations it hired or anticipated hiring.

The affidavit highlights troubling information that Eliesen says could help push Site C’s cost to what will “likely” be $12 billion or more. He also says the project will also likely be delayed by at least another year, putting it at least two years behind schedule.

Eliesen singles out BC Hydro’s recent handling of the second largest Site C contract — a civil works contract to build the dam’s generating station and spillways — as one cause for financial concern.

As a result of the unintentional release of redacted parts of the Deloitte report, it was revealed that BC Hydro estimated the second civil works contract would cost about $1.255 billion — a sum Eliesen says is “much too low.”

He said it is his expert opinion that the contract will exceed $2 billion, a 50 to 70 percent increase over BC Hydro’s August 2017 estimate.

Eliesen also notes that BC Hydro recently experienced “major contract problems” with Flatiron Contractors Canada Ltd., one of four corporations in the partnership BC Hydro has selected as its preferred contractor for that civil works contract. Flatiron has a 27.5 per cent share in the joint venture.

The affidavit points out that Flatiron, in a joint venture with Graham Construction Ltd., was awarded the contract for the Interior to Lower Mainland Transmission Line, a project that Eliesen says was “significantly over budget and delayed.”

As explained by the previous Liberal government, the “serious delays were triggered by faulty steel towers, problems with [the] contractor’s environmental management and protection plans and turnover with its contractors,” states the affidavit, noting that BC Hydro characterized the problem as a “failure to perform.”

BC Hydro has not disclosed the final costs of the transmission line, and arbitration related to the project continues.

“It is surprising that BC Hydro’s due diligence would still qualify Flatiron” to be part of the joint venture for Site C’s civil works contract, Eliesen says in the affidavit.

And then there was the question of Petrowest

Eliesen also questions why BC Hydro qualified Calgary-based Petrowest Corporation to be part of the Peace River Hydro Partnership (PRHP), the recipient of Site C’s largest civil works contract.

He notes that only a month after the $1.75 billion contract was awarded the media reported that Petrowest was operating on “borrowed time from its lenders.”

Petrowest went into receivership last August.

BC Hydro, Eliesen notes, “did not provide an explanation as to how it was unable to determine Petrowest’s compromised financial position when it awarded the contract.”

“It is my expert opinion that the financial failure of Petrowest not only has created a period of instability that has contributed to PRHP’s inability to meet its planned work schedule in the short term, but that it will also continue to have a negative impact on project cost and budget at least through the medium term.”

Eliesen also records that “serious and ongoing difficulties” between BC Hydro management and the remaining Peace River Hydro Partnership management have impacted Site C’s cost and schedule.

Geotechnical conditions are one area of disagreement, with the PRHP alleging that conditions in an area that has already experienced several “tension cracks” — landslides — differ from those disclosed by BC Hydro. BC Hydro disputes that claim.

Eliesen says it is not uncommon for contractors to seek additional payment for things such as unforeseen conditions or construction delays.

But “the number and severity of these claims” and the “stark differences” in views between BC Hydro and the Peace River Hydro Partnership “reflect a dysfunctional relationship that is not conducive to construction of a large hydro dam,” his affidavit states.

Among other issues, the affidavit also notes that BC Hydro was working with two sets of Site C budgets and schedules: its private set and the set that was made publicly available in December 2014 when former premier Christy Clark announced final approval for the dam, then an $8.8 billion project (including the Treasury Board reserve.)

Eliesen, who has multiple years of experience working in utilities while major projects were constructed, including Manitoba’s Limestone Generating Station, said in his affidavit that, “I have never experienced, nor have I heard about, a situation where there are two sets of budgets and two schedules.”

West Moberly First Nations and Prophet River First Nation are seeking an injunction to stop work on Site C until their legal case can be heard.

In January, the two Treaty 8 First Nations filed notices of civil action, claiming that Site C and two existing dams on the Peace River infringe on rights guaranteed to them in Treaty 8.

The nations have requested that the court declare approvals for Site C issued by the B.C. and federal governments to be “unconstitutional.”

Tim Thielmann, a Victoria lawyer who is part of the new legal team assembled by the First Nations, said the nations hope their request for an injunction will be heard in the early spring.

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Nothing remains at the Rocky Mountain Fort site where Peace Valley farmers and First Nations camped for 60 days in the hopes of stopping clear-cut logging for the Site C dam. The camp was dismantled in March and the old-growth spruce and cottonwood forest was logged, as BC Hydro prepares to convert the Class 1 heritage site into a Site C waste rock dump.

But one notable thing still stands: the civil lawsuit BC Hydro filed in January against five campers and a supporter, a suit the B.C. Civil Liberties Association describes as a matter “of grave concern.”

The 13-page lawsuit accuses six Peace Valley residents of conspiracy, intimidation, trespass, creating a public and a private nuisance, and “intentional interference with economic relations by unlawful means.”

Most worrisome for the people named is that the suit seeks financial damages for BC Hydro that could result in the loss of their homes, life savings or other assets. Five of the six already stand to lose their houses, farms, land or traditional territory to the nearly $9 billion Peace River dam.

Josh Paterson, executive director of the B.C. Civil Liberties Association (BCCLA), says the association is extremely concerned about the civil suit because it could put a chill on freedom of expression. It might cause others “to think twice before they talk about their political opinion.”

SLAPP style #SiteC suit by @BCHydro might stop others from expressing political opinion https://t.co/bO9dZGmsPc @SavePeaceValley #bcpoli

— DeSmog Canada (@DeSmogCanada) May 25, 2016

BCCLA’s unease is heightened because BC Hydro is a Crown corporation, says Paterson. “For a government agency to come down in that way is of grave concern. What it does is send a message, perhaps deliberately, that ‘you’d better be careful if you plan to oppose these kinds of developments’…BC Hydro as a public institution should be very cautious about making these kinds of claims for damages it would impose.”

The civil suit, according to University of Victoria law professor Chris Tollefson, bears some of the hallmarks of a SLAPP suit, a strategic lawsuit against public participation.

SLAPP suits can stifle freedom of speech and quash opposition to controversial projects like the Site C dam, which Premier Christy Clark has vowed to push “past the point of no return,” despite four on-going court cases against the dam by Treaty 8 First Nations and Peace Valley landowners.

A fifth on-going legal action, launched by the Blueberry River First Nations, claims treaty rights have been violated by the cumulative impacts of Site C and other industrial development in the Peace.

“If the end result is that they face financial or personal ruin, a key implication is that others won’t want to follow in their footsteps and take that risk,” says Tollefson. “Then free speech becomes a luxury that only those who have nothing, or those who are incredibly rich, can afford.”

Tollefson, an expert on SLAPP suits, says it is the first time he has ever heard of a Crown corporation seeking damages from an individual in B.C. “or anywhere else for that matter,” for lawfully and peacefully exercising their right to protest on a matter of public interest.

Those named in the suit include farmers Ken and Arlene Boon, Helen Knott, a social worker from the Prophet River First Nation, and Yvonne Tupper, a community health worker from the Saulteau First Nations.

Esther Pedersen, a Peace Valley farmer whose land was used to helicopter two survival shacks across the river for the campers and to collect food donated by community members, was also named. The suit includes “Jane Doe” and “John Doe,” leaving open the possibility for other Site C opponents to be singled out as well.

After BC Hydro filed the civil suit, it launched an injunction application to remove campers from the fur trade fort site on the Peace River’s south bank, near the confluence of the Moberly River. That area was deemed to be so ecologically and historically important that the B.C. government had made four designations to protect its heritage resources, wildlife and old-growth forests. The government even went so far as to set aside the land to become part of a future B.C. protected area.

But BC Hydro had obtained the necessary government permits to log the forest and convert the fort site area into a 216-hectare rock dump for potentially acid-generating waste rock from Site C construction. After the camp was ruled illegal by the courts, the people named in the suit said they were law-abiding citizens and promptly dismantled their encampment.

Ken Boon says he and his wife Arlene made a personal request to BC Hydro CEO Jessica McDonald to drop the civil suit when McDonald recently visited their farm.

Peace River Valley farmer Ken Boon at the Rocky Mountain site encampment. Photo: Sarah Cox.

Accompanied by a driver and an aide, McDonald spent two hours with the Boons. “We basically agreed to disagree,” says Boon of the visit, which he characterizes as cordial and personable. “We showed her around the farm.”

The Boons will lose productive fields to flooding and when riverbanks slough into the dam reservoir, a deep body of water that will stretch for 107 kilometres along the Peace River and its tributaries. The Boon’s home and farm buildings are slated to be destroyed, to make way for the $530 million re-location of Highway 97 away from the flood zone.

Boon says McDonald was willing to drop the suit, but only if the Boons were prepared “to sign a document basically stating we would not impede further work or stand in the way of the project.”

The Boons declined to sign. They believe it is their constitutional right to oppose Site C, which will flood at least 6,500 hectares of prime farmland and, in the words of a government-appointed panel that reviewed the project, have “significant adverse effects” on the environment and on lands and resources used by First Nations.

In late April, BC Hydro launched a second civil suit, this time against hunger striker Kristen Henry and three others camped outside the Crown corporation’s head office in Vancouver to protest the Site C dam project.

The Vancouver campers packed up 10 days later, saying they did not have the money or the inclination to fight BC Hydro in court. BC Hydro claimed “hundreds of thousands” of dollars from them in damages, the four campers stated in a press release.

BC Hydro said the camp had forced it to take expensive measures to step up security, including spending $30,000 for new door handles to which people cannot chain themselves, up to $60,000 a month to hire the company Xpera Risk Mitigation and Investigation to monitor the campers, and up to $35,000 a month to boost general security measures.

Even though that camp, too, is gone, the civil law suit stands, Dave Conway, BC Hydro’s Site C community relations manager, confirmed in an email. Conway said in a separate email that the crown corporation cannot comment on the civil suit against the six Rocky Mountain fort campers due to the fact that it is an “on-going court action.”

The majority of U.S. states, along with Ontario and Quebec, have anti-SLAPP suit legislation. In 2001, the NDP government in B.C. passed similar legislation, called the Protection of Public Participation Act. Six months later, that legislation was repealed by the newly-elected B.C. Liberal government.

Such legislation, says Tollefson, aims to expedite justice and provide the courts with tools to dismiss SLAPP suits early on “so a very deep-pocketed corporation doesn’t get to drag it out and benefit from simply being better endowed.”

Image: Ken Boon on his farmland in the Peace Valley. Photo: Emma Gilchrist.

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Two Treaty 8 First Nations have applied for an injunction to prevent BC Hydro from cutting down trees containing eagle nests in preparation for construction of the controversial Site C Dam.

Several legal challenges to the $8.8-billion dam are pending, but the nest removal is scheduled to start September 1, according to a letter from BC Hydro to the Treaty 8 Tribal Association that gives notice of the “planned removal and destruction of Bald Eagle nests from construction areas of the Site C Clean Energy Project.”

Applications to the B.C. Supreme Court for an injunction and a judicial review have been made by the Prophet River First Nation and West Moberly First Nations. In a separate case, both bands are also seeking to overturn provincial approval for the dam.

The petition asking for an injunction says that Treaty 8 First Nations will suffer irreparable harm that cannot be mitigated by damages if the ground clearing and nest destruction goes ahead.

“Of particular concern is the clearing of the South Bank of the Peace River Valley, which represents extensive, severe and irreversible losses to ecological and cultural resources that support the meaningful exercise of Treaty rights,” it says.

Video by Damien Gillis , publisher of the Common Sense Canadian. 

Consultation on the permits allowing the nests to be removed was inadequate and BC Hydro proceeded with an “aggressive timeline for consultation,” according to the documents.

The plan to remove up to 28 nests between September and March, once the nests have been confirmed as inactive, means time is short.

“We are hoping that injunction happens sooner rather than later,” Treaty 8 First Nations member Susan Auger, said in a video made by Common Sense Canadian publisher Damien Gillis during a cultural demonstration on the banks of the Peace River earlier this month.

“Eagles are something that are very significant to myself and my culture. It’s something that has got my blood boiling that they are going to come and cut down eagle nests,” she said.

Studies show that there are 25 active eagle nests in the dam area, representing half of the large raptor nests in the Peace River corridor between Hudson’s Hope and the Alberta border.

However, BC Hydro plans to compensate for the removal or destruction of the nests by installing 38 artificial nesting platforms.

“Where feasible and safe, nests will be removed intact and relocated and installed on nest platforms,” says the BC Hydro letter.

It’s a solution scoffed at by George Desjarlais of West Moberly First Nation.

“I don’t know how they communicated with the eagles, how they spoke to them and got them to understand that this is your new home,” he said during the demonstration.

BC Hydro spokesman Dave Conway said that during Site C construction, BC Hydro will take great care to avoid or mitigate effects on eagle nests.

“During construction, we will not disturb active eagle nests and will only relocate eagle nests when they are inactive, as confirmed by a qualified professional,” he said in an e-mailed statement.

“For active nests retained through the construction period, a no-clearing buffer around each active nest will be implemented.”

In the Gillis video, Art Napoleon of Saulteau First Nation looks out over the north bank of the Peace River and points out that each island contains eagle nests.

“There’s no need for it,” he said.

“It looks to me like a test or a provocation.”

The First Nations are fundraising for the legal challenges through the website nosite-c.com.

“We are closing in on $100,000 and our goal is $250,000,” said Susan Smitten of the group Respecting Aboriginal Values and Environmental Needs (RAVEN).

“We are committed to making sure there’s access to justice. It’s a huge issue when you are going up against the deep pockets of BC Hydro and the provincial government.”

Image Credit: Tim Lumley

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In his first interview on the Site C dam, the chair of the federal-provincial panel appointed to review Canada’s largest current infrastructure project said the B.C. government was unwise to green-light the project without a review by the B.C. Utilities Commission and would have been better off to delay the decision by a few years.

“There’s a whole bunch of unanswered questions, some of which would be markedly advanced by waiting three or four years,” Harry Swain told DeSmog Canada. “And you’d still be within the period of time, even by Hydro’s bullish forecasts, when you’re going to need the juice.”

Swain, a former deputy minister of Industry Canada and Indian and Northern Affairs Canada, spoke to DeSmog Canada on his own behalf, not on behalf of the panel. In a wide-reaching interview, Swain also described the province’s failure to investigate alternatives to the dam as a “dereliction of duty.”

The B.C. government gave the go-ahead for BC Hydro’s Site C dam in December and construction is scheduled to begin this summer. If built, it will be the largest public infrastructure expenditure in the province’s history. The dam is facing six legal challenges, including one that alleges that Cabinet erred in dismissing key portions of the joint review panel’s findings on the project.

The dam — which was first turned down by the B.C. Utilities Commission in the early 1980s — would be the third on the Peace River and would flood 83 kilometres of the Peace Valley, impacting 13,000 hectares of agricultural land. The project is opposed by B.C.’s Treaty 8 First Nations, several of which have filed lawsuits.

Swain’s panel made 50 recommendations to the provincial and federal governments, but stopped short of recommending for or against the project.

“The decision on whether the project proceeds lies with elected officials, not with the panel,” the 471-page report read.

“I’m still strongly of the view that review panels are advisors and governments get paid to make the decisions and live with the consequences at the next election,” Swain told DeSmog Canada.

But that didn’t stop him from outlining how he believes the government has acted prematurely.

“You shouldn’t take decisions before you need to,” Swain said. “That means you’ll have much more information when you finally have to take a decision. Building electricity facilities in advance of need only costs money.”

‘Wisdom Would Have Been Waiting’

The panel’s report predicted that in the first four years of production, the Site C dam would lose at least $800 million because BC Hydro would generate more power than the province needs at a cost of $100 per megawatt hour — when the market price for that power is currently $30 per megawatt hour.

“Wisdom would have been waiting for two, three, four years to see whether the projections they were making had any basis in fact,” Swain said. “And they would have been able to make a better-informed decision and not necessarily a more expensive one.”

In its report, the panel wrote that it couldn’t conclude that the power from Site C was needed on the schedule presented, adding: “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.”

Some of the questions that still need to be answered, according to Swain, include the real cost and availability of alternatives, how B.C. should use its Columbia River rights, how British Columbians will react to increased electricity prices (which could decrease demand) and how the province’s liquefied natural gas industry will develop.

Panel Instructed Not to Pass Opinion on First Nations Rights

Asked why the panel didn’t render a “yes” or “no” answer on the Site C dam, Swain responded: “We weren’t asked to.”

Further to that, Swain — who wrote a book on the Oka crisis — outlined the limitations of the review process as it related to First Nations rights.

“They said that we were to catalogue the assertions of First Nations regarding treaty rights and aboriginal rights. But we were not to pass an opinion on them. We were not to say whether consultation had been adequate and so on and forth. If you are forbidden to talk about that, you can not come to a conclusion about the overall project,” Swain said.

“The question is: well, if we had recommended anything, what would we have said? And I think the conclusion is probably pretty apparent from the text. We would have said something to the effect that it might be wise to wait for a couple years and see if some of the projections on which the project rests eventuated. However, they didn’t ask — nor did they wait.”

Decision to Skip Review by B.C. Utilities Commission ‘Not Good Public Policy’

In its report to the government, the panel said it did not have the information, time or resources to look at the accuracy of cost estimates and recommended that, if the project proceeds, costs should be examined in detail by the province’s independent regulator, the B.C. Utilities Commission.

“Knowing that the province had decided to exempt the project from the scrutiny of the utilities commission, we nonetheless felt that that was not good public policy and recommended otherwise,” Swain said. “They of course gave us the back of their hand.”

What did he think of the province ignoring that recommendation?

“I expected it entirely and I don’t think it was wise,” he added.

There were big financial questions — related to the borrowing of nearly $9 billion, the cost estimates for the project and the effect of rates on consumer demand — that the panel could not examine, Swain explained.

“That requires much, much more time and expertise,” he said. “Moreover it is a job that the utilities commission is specifically set up to be able to do.”

Government Documents Downplay Role of B.C. Utilities Commission

In documents obtained by DeSmog Canada via a freedom of information request, government spokespeople were prepped to respond to questions about why the project wasn’t referred to the utilities commission. The speaking notes were prepared for the Dec. 16 press conference announcing the B.C. government’s decision to move ahead with Site C.

“The BCUC does not actually have the capacity to do the kind of work that has been done by BC Hydro in analysing and reviewing the project, particularly the costs,” the speaking notes read.

“Well, whose fault is that?” Swain responded. “How about the owners of the utilities commission? It is their legislation that set it up to do specifically that job and if it hasn’t got the resources to do it, I think you’ve got to look back to the government.”

Swain noted that the government is essentially arguing that the proponent of the project, BC Hydro, should be relied on to review its own project.

“Is the answer therefore that such projects are only to be examined by the proponent?” Swain said. “Recall about the first thing that happened after they approved it was that they confessed, ‘Oh golly, the price is about a billion dollars higher than we thought.’ ”

Harry Swain in his Victoria home during an interview with DeSmog Canada. Photo: Emma Gilchrist.

The speaking notes obtained by DeSmog Canada also said: “The costs of Site C have been independently reviewed by KPMG and an independent panel of contractors — work that the commission would have contracted out itself regardless.”

When asked why, despite being well aware of the KPMG review, the panel still recommended a review by the utilities commission, Swain responded: “If you ask Lockheed Martin what the cost of the F-35 is going to be, they — the proponents — will give you a number. And if you believe that number, I have a bridge in Brooklyn that I’d like to sell you.”

He noted that accounting firm KPMG was hired by the project proponent, BC Hydro.

“Consultants hired by the project proponent are being hired in part to demonstrate the reasonability of the work being done by the proponent,” he said. “The last thing that you’d expect would be for the consultants to BC Hydro to say ‘Oh golly, what an interesting error you’ve made.’ It just isn’t going to happen.”

And that’s at the crux of why the panel recommended the project be reviewed by the independent B.C. Utilities Commission — because its mission is “to ensure that ratepayers receive safe, reliable, and non-discriminatory energy services at fair rates from the utilities it regulates.”

“I think projects of that nature where the public purse — and the public interest much more broadly — is involved deserve a degree of scrutiny,” Swain said.

“I think the province was determined to go ahead with the project from the beginning.”

Read Part 2 of DeSmog Canada’s Interview with Harry Swain: ‘Dereliction of duty’: B.C.’s failure to investigate alternatives to the Site C dam

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The Peace Valley Landowner Association is celebrating a small victory following a Federal Court decision that four applications for judicial reviews of the massive Site C dam, planned for the Peace River, will be heard this summer.

The Association and representatives of B.C. and Alberta Treaty 8 First Nations appeared before Federal Court last week to oppose a BC Hydro motion to have the cases heard in May because of the financial implications if the Site C construction schedule was delayed. BC Hydro wants to start work on the $8.8-billion project in June.

The Landowner Association and First Nations argued that, if the hearings were fast-tracked, there would be insufficient time to prepare legal arguments and cross-examination plans.

The court ruled that the applications for judicial review – brought by the PVLA, Mikisew Cree, Athabasca Chipewyan, Prophet River, Doig River, West Moberly and McLeod Lake First Nations – will be set for this summer, depending on court availability, and will be heard consecutively by one judge. That could stretch the hearings into late summer.

Ken Boon, PVLA president, said the decision shows the court is not going to rush or let BC Hydro set the agenda.

“The government knew when they made this decision in December that these court cases had already been filed,” he said.

It is not the Association’s problem that BC Hydro may have to adjust its’ schedule, he added.

First Nations, whose application names several federal ministers and BC Hydro, are claiming the dam will destroy their traditional territory and way of life and allege the federal government has violated their treaty rights by failing to consider the potential impact.

The PVLA application claims environmental approvals of the dam were seriously flawed and that the two levels of government failed to consider the joint review panel’s assessment of the economics.

Site C, the third dam on the Peace River, will flood 5,550 hectares of land and generate enough power for 450,000 homes, but the joint review panel found the power would not be needed until 2028 at the earliest.

Meanwhile, B.C. Supreme Court has ordered that petitions for a judicial review by the PVLA and B.C. Treaty 8 First Nations will be heard by a single judge.

The Association’s review petition is set to be heard April 20 and no date has yet been set for the B.C. Treaty 8 hearing.

The two courts are involved because the Site C project was approved by the federal and provincial governments.

As the Site C approval wends its way through the courts, the Canadian Geothermal Energy Association is continuing its campaign to persuade the government to look more seriously at the potential of geothermal and on Wednesday released technical information it compiled for the report “Geothermal Energy: The Renewable and Cost Effective Alternative to Site C.”

CanGEA chair Alison Thompson said that the geothermal unit energy cost of $56-$73 MWh compares positively to the updated Site C cost to ratepayers of $58-$61MWh.

“If the B.C. government treats geothermal energy as a priority, not an afterthought, geothermal will provide firm energy beginning in 2018 at a lower cost than Site C and in a manner that benefits ratepayers, taxpayers, First Nations, the economy and the environment, not to mention having a carbon footprint that is lower than Site C,” she said.

Image Credit: B.C. Government

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The proposed Site C dam on the Peace River is the best alternative for providing B.C. with reliable cheap power, but BC Hydro has not proved that the power is needed in the immediate future, says a much-anticipated report by the federal Joint Review Panel.

The report does not give a definitive yes or no answer to the planned 1,100 megawatt dam, which will flood about 5,500 hectares of land, but includes 50 recommendations on issues such as threats to endangered wildlife, health effects for those living in the area and destruction of First Nations heritage sites.

If approved, project construction would begin in 2015 with completion projected for 2023.

The ambivalent report says B.C. will need new energy and new capacity at some point and “Site C would be the least expensive of the alternatives and its cost advantages would increase with the passing decades as inflation makes alternatives more costly.”

However, “the panel cannot conclude that the power of Site C is needed on the schedule presented.”

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There are also important environmental, social, economic, health and heritage costs, panel members concluded.

Risks to fish and wildlife include harmful and irreversible effects on migratory birds and species such as the western toad and short-eared owl.

“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,” it says.

High costs yet alternatives not considered

The report notes that BC Hydro has not looked closely enough at alternatives such as geothermal energy.

“The panel concludes that a failure to pursue research over the last 30 years into B.C.’s geothermal resources has left B.C Hydro without information about a resource that BC Hydro thinks may offer up to 700 megawatts of form, economic power with low environmental costs,” it says

The estimated $7.9 billion cost raised questions, but panel members said they do not have the information, time or resources to look at the accuracy of cost estimates and recommended that, if the project proceeds, costs should be examined in detail by the province’s independent regulator, the B.C. Utilities Commission (BCUC).

The Liberal government previously exempted Site C from BCUC scrutiny and, although the recommendation was applauded by groups such as the Peace Valley Environment Association, Energy Minister Bill Bennett immediately threw cold water on the idea.

“This project has been poked, prodded and analyzed for the last 35 years,” he said

“I think subjecting it to another review after all the years it has been studied, is not a good use of public money.”

Bennett believes BC Hydro will keep to its budget, despite reports showing mega-dams around the world often run 50 per cent over budget.

BC Hydro has included $1.52 billion for inflation and contingencies, he said.

“Of course with large projects like these, there’s no guarantees, but with such a large contingency fund and such a large fund for inflation and all the work that BC Hydro has done, I think we can have confidence in that final number,” he said.

The proposal must gain the approval of the federal and provincial governments and Bennett said he will take a recommendation to cabinet this fall after further environmental and First Nations consultations.

Indecisiveness not all around

Bennett, who said he views the Joint Panel review as “mostly positive,” emphasized that he has not yet made up his mind about the dam, which, if approved, would be the most expensive project built in the province.

“I am right square in the middle of this,” he said.

NDP leader John Horgan said the report shows the Liberal approach to Site C has been reckless and does not have a foundation in the realities of the North American energy market.

“The challenge ratepayers have is they are facing 28 per cent rate increases over the next five years and we have a government proposing to spend $8 billion on power that we may not need, at a time we don’t have the money to spend,” he said.

Former BCUC chair Mark Jaccard, professor in the school of resource and environmental management at Simon Fraser University, said he is impressed the panel tried to address big questions such as climate impact.

“But I was a bit frustrated that the panel waffled so much. I think I wanted them to say yeah or nay,” he said.

It is a difficult decision, because there are compelling arguments on both sides, and politicians will ultimately have to take a stand, but it would have been good to have a definitive opinion from experts who listened to presentations at the hearings, Jaccard said.

“They are trying to say all the things for all the people,” he said.

Signs of optimism

In the Peace Valley, the report is generating some optimism and Andrea Morison, Peace Valley Environment Association coordinator, applauded recommendations that show the panel has significant concerns about impacts.

“It shows the proponent has not fully demonstrated the need for the project and that there are other sources they should be looking at. Another key point is they can’t conclude the accuracy of the cost estimate,” she said.

Morison believes that once Bennett has studied the report he will decide to follow the key recommendation of referring it to BCUC for a cost review.

“One thing we can count on with politicians is that they do change their minds and it’s not solely his decision,” she said.

Hudson’s Hope Mayor Gwen Johansson also wants Bennett to pass the project to BCUC for scrutiny.

“It would be disappointing if he did not follow that recommendation,” she said.

Treaty 8 First Nations Tribal Chief Liz Logan said the core message to government is why build a project that is not needed. Alternative solutions such as wind power or smaller hydro projects must be considered instead, Logan said.

“We are still going to be vocal about it,” said Logan, who hopes British Columbians throughout the province will put pressure on the province.

“This project doesn’t just affect us on the ground, it’s going to affect the pocketbook of every British Columbian,” she said, adding she wants the project’s cumulative effects studied.

Those living in the area that will be affected by the dam see the report as validation of their belief that the adverse effects outweigh any benefits.

Spring is finally coming to the valley, said Ross Peck, a retired guide outfitter whose family has lived in the area since 1924.The grass is greening up, the leaves are about to pop and the valley is full of animals. I saw the first osprey today he said.

If the dam goes ahead, part of his property will be flooded, roads will cut close to his home and Peck believes he would have to leave.

“I don’t think we could sit on our deck and watch them clearcutting for the reservoir,” he said.

Esther Pederson, who would lose part of her farmland and her home to the dam, has little faith in any consultation process.

“The consultation so far has been ‘do you want to sell your farm now or later,’ ” she said.

Armed with the concerns raised in the report, it should be possible to stall approval at least until the next election, Pederson said.

“It could be dragged out forever and the First Nations people are lined up to take the government to court,” she said.

Photo: Peace Valley courtesy of Andrea Morison and Don Hoffmann.

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