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Expert challenges BC Hydro's estimated Site C delay costs

The Prophet River and West Moberly First Nations squared off against BC Hydro in a Vancouver courtroom Tuesday in an attempt to halt construction work on Site C. The two bands are in B.C.
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A truck waits near one of the entrances to the BC Hydro dam site along the Old Fort Road Tuesday morning.

The Prophet River and West Moberly First Nations squared off against BC Hydro in a Vancouver courtroom Tuesday in an attempt to halt construction work on Site C.

The two bands are in B.C. Supreme Court seeking an injunction on the project, and challenging a number of permits that have allowed Hydro and its contractors to proceed with construction. 

Hydro has estimated a one-year delay of Site C could cost ratepayers $335 million. But, Philip Raphals, executive director of the Helios Centre, a research group that provides independent expertise on energy issues, signed a pair of affidavits  July 7 and Aug. 14 in support of the injunction, saying a delay on the project could save Hydro up to $350 million.

RELATED STORY: Year delay for Site C would cost $335M: BC Hydro

Raphals has worked for the Treaty 8 Tribal Association in examining the project. In his affidavits, obtained by the Alaska Highway News, he questioned the claims Hydro has put forward about a delay driving up interest costs, adding demobilization and remobilization expenses, along with other sunk costs.

Raphals says it’s "highly speculative" whether or not interest rates will be higher next year.

In an interview Tuesday, Raphals said that while there may be costs to stopping work that has already begun, those costs would be less than the money that could be saved by delaying the project.

In his July 7 affidavit—written before work began—Raphals estimated a one-year delay could save Hydro between $174 and $347 million, depending on how much demand for electricity grows.

For a two-year delay, that number would grow to $317 and $678 million, according to Raphals.

Raphals also bases some of his criticism on an affidavit made by Michael Savidant, who has worked for BC Hydro on the Site C dam. That affidavit was not publicly available to the Alaska Highway News.

"Savidant sets out a number of reasons why delays increase the cost of construction," Raphals states.

"However, apart from the direct costs… all of these factors are related to accelerating construction work to meet an original schedule (cost of acceleration, winter work premiums, potential loss of a construction season). They are thus irrelevant in a context where delaying commissioning would in fact improve project economics."

Raphals has previously spoken against the need for Site C.

In a 2014 report, Raphals wrote that new renewables such as wind could allow Hydro to meet its demand throughout its planning period, for $300 million less than if Site C is built, even in a more high-growth demand scenario.

The hearing is expected to wrap up Wednesday.

It’s unclear what the two First Nations may do if the injunction application is denied.

"We'll have to see what happens," West Moberly First Nation Chief Roland Willson said in an interview with CBC.

"I have confidence that we're going to win," he added. "I'm not even contemplating that we're not winning. Everything about this project is wrong."

reporter@ahnfsj.ca