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Hydro demand projections off by half a Site C, annual report shows

3,351 gigawatt-hour shortfall argument against controversial dam, critics say
Workers on the Site C dam watch boaters on the Peace River last week. BC Hydro overestimated demand for electricity by more than 3,000 gigawatt-hours last year.

BC Hydro's electricity demand projections were off by more than half a dam last year, according to the Crown corporation's annual report.

Steep declines in electricity demand from mills, mines and oil and gas producers, as well as a warm winter, contributed to a 3,351 gigawatt-hours (Gwh) shortfall in demand forecasts. For comparison, the Site C dam under construction on the Peace River near Fort St. John would generate 5,100 Gwh a year.

Site C critics say the big shortfall in demand is further argument against the project, which they say is not needed to meet B.C.'s energy needs on the current timeline.

During a special session of the legislature July 25, B.C. NDP Hydro critic Adrian Dix called Hydro's demand projections a "big miss" that would result in future rate increases.

"That's a lot of gigawatt hours," he said. "That's the reason why they're failing. That's why the people of British Columbia are getting stuck with massive rate increases well into the future. That's why they're owing money to BC Hydro—to pay for this government's incompetence and their determination to borrow money to pretend that their fiscal plans make sense."

Bill Bennett, minister of energy and mines, said the shortfall represented a single year in a ten-year plan.

"The member (Dix) mentions the demand forecast for one year as if it should be bang on, spot on accurate," he said. "From time to time, the demand forecast is going to change on a year-by-year basis."

He said that long term, B.C. will need more power.

"We know that our economy is going to continue to grow," he said. "We know that our population is going to continue to grow, because it is. We know that B.C. is going to continue to attract new jobs, leading the country, and that's what's going to drive new demand."

Bennett said the public remains confident in BC Hydro.

"I think all you have to do is take a look around the world to make a determination as to how BC Hydro is doing and whether ratepayers in B.C. should have faith in BC Hydro," he said. "Our residential rates here in this province are the third-lowest in North America."

A drop in commodity prices, including coal and natural gas, contributed to the shortfall in demand. BC Hydro opted this year to allow certain mining companies to defer their power bills with interest until commodity prices recovery.

While Site C is billed as producing enough electricity to power 450,000 homes a year, much of the electricity would likely go to industrial customers, including liquefied natural gas. The government has also floated the idea of selling power to Alberta, which is looking to move away from coal-fired electricity generation.

Dix also criticized BC Hydro for increased reliance on deferral accounts, which he said allowed the government to "secretly" add $1 billion in debt last year.

The B.C. NDP alternative to Site C, dubbed the PowerBC plan, would focus on retrofitting homes, businesses and public  buildings to increase energy efficiency. The plan also includes upgrades to generating capacity at existing dams.

The party has said it will review Site C if it forms a government in 2017.