B.C. Premier John Horgan says construction of BC Hydro's now $10.7-billion Site C dam will be completed.
Horgan gave the Crown utility the green light to carry on in a hotly anticipated decision handed down at the legislature Dec. 11, four months after his government ordered a review of the project in August.
“We have listened, we have deliberated and we have debated and, at the end of the day, we’ve come to the conclusion that although Site C is not the project we would have favoured and it’s not the project we would have started, it must be completed to meet the objectives our government has set through mandate letters to ministers and commitments to the people of B.C. during the election campaign,” Horgan said.
After nine hours of deliberation, cabinet’s decision came down to a math equation: Comparing how much money has been spent, how much remains to be spent and comparing those figures with the alternative of getting energy elsewhere.
Although the projected cost of the project has risen to $10.7 billion from $8.8 billion, the province says it makes the most financial sense to continue moving forward.
Cancelling Site C would have meant an "unavoidable" $4-billion hit on either BC Hydro's or the province's books, Horgan said.
"It would have meant a 12 per cent rate increase immediately and foregoing important capital projects like schools, bridges and transit, and other important initiatives across British Columbia," Horgan said.
Cancelling it could also mean creating the province’s largest deficit, destroying the province’s credit rating and wiping out 80 per cent of B.C. Hydro’s equity.
Site C expenditures have reached $2.1 billion so far, the government says.
BC Liberal and Peace River North MLA Dan Davies said Horgan's decision to continue was good news and sends a message of certainty to investors.
"This is good news and a guaranteed way to secure our energy needs that we know we're going to need in the future. This has been the most reviewed project in British Columbia's history, by far. It's unfortunate that the NDP came to the same conclusion that we came to," Davies said.
"As we move forward, it's now our job as official opposition to make sure that this project is done in the most cost-effective way that protects ratepayers and protects taxpayers."
Turnaround plan will keep project on time, budget, NDP says
The government also announced a "turnaround plan" on the dam that includes a project assurance board made up of BC Hydro, independent experts, and government to oversee future contract awards to deliver the project "on time and budget."
The government also announced a food security fund that will use revenues from Site C power to support farm initiatives across the province, on top of an already announced $20-million agricultural compensation fund for Peace Region farmers.
The Boon family, whose third-generation farm at Bear Flat was expropriated to make way for the dam's reservoir, were not immediately available for comment.
The government says its turnaround plan also includes “new” community benefit programs, while also increasing the number of apprentices and First Nations working on the project. Details of the new programs weren't provided.
The government says it will also look at options to relocate the Site C worker camp to a “local skills-training institution.”
In a statement, BC Hydro President and CEO Chris O'Riley said Site C was a "large and complex" project, but that the utility was confident it would be able to build the project within its revised budget.
"We have identified a number of areas where improvements must be made, including adding independent oversight of project performance, ensuring the appropriate resources are in place to manage new and existing contractors, and enhancing openness and transparency through increased project communications," he said in a statement.
Site C a quagmire for NDP
Site C is the largest construction project in B.C. history. It would flood about 5,500 hectares of land along the Peace River, creating an 83-kilometre-long reservoir and providing enough power to light up to 450,000 homes a year.
The hydroelectric dam, which was a signature job-creation project of former Liberal premier Christy Clark, has been under review by the new government.
While proponents say it will provide necessary power to meet future demand, critics have questioned its value in the face of cost overruns and delays, geotechnical challenges, First Nations claims and environmental damage.
In a Nov. 1 report to the government, the B.C. Utilities Commission said the dam was not on track to meet its then $8.3-billion budget nor its 2024 completion date. It pegged the likely cost at more than $10 billion — but at the same time, did not give a recommendation to either cancel or continue the project.
B.C. Hydro has disputed some of the report’s conclusions, saying it underestimated the dam’s benefits by $800 million. Others have highlighted the report’s findings that alternative energies, such as wind and geothermal, could provide equally priced or cheaper power.
Politically, Site C has been a quagmire for the New Democrats. The party’s traditional supporters are divided: While many argue for investment in alternative energies instead, construction trade unions have highlighted the employment value of the project.
There were 1,974 workers tied to the project in October, according to BC Hydro's latest job statistics.
The BCUC was specifically excluded from reviewing the Site C dam by the Liberals, who formally approved the project in 2014. Horgan pledged to send the project to the commission for review if he won the May election, while Clark vowed to push the project past the point of no return.
Horgan followed through on his pledge after taking control of the legislature from Clark in the summer with the help of the BC Greens in a power-sharing agreement.
Green leader Andrew Weaver wants the project cancelled entirely, but has said he won't defeat the government if it decides to continue.
However, on Sunday, Weaver suggested a recall campaign against new Energy Minister Michelle Mungall was in order if the project is approved, contrasting remarks she made in 2016 in opposition to the project.
Horgan met with six energy experts on Nov. 30, and was in Prince George on Dec. 8 where he heard from Dawson Creek Mayor Dale Bumstead that Site C was integral to natural gas development in the region.
The West Moberly and Prophet River First Nations say the province faces a $1-billion treaty infringement lawsuit if it continues to build Site C.
— with files from the Times Colonist