Site C on time and budget, but significant risks remain, report says

BCUC has more questions than answers in its preliminary report

The B.C. Utilities Commission has more questions than answers on Site C and needs more information before making its full assessment on the future of the $8.8-billion project.

The commission's preliminary report was released late Wednesday with 73 questions for BC Hydro that need answers by Oct. 4.

article continues below

Those questions include providing a more detailed analysis of the potential for cost overruns on the project, the province's future energy needs, and the industry demand forecasts.

While the dam was on time and on budget for its targeted November 2024 completion date as of June 30, the panel said it's unable to say whether that will remain the case if construction continues. 

The commission said it's concerned about spending levels, outstanding contracts and the likelihood that the project will meet the crucial milestone of a river diversion by 2019.

“While the panel has already found that the project is currently on schedule to deliver by November 2024, the panel is not yet in a position to express a view on the probability that the project will remain on schedule,” the report said.

“The panel is concerned that the amount spent on the project as of June 30, 2017, $1.8 billion, might not accurately represent the spending that should have happened based on the project activities to date,” it said.

The panel is also “concerned” that B.C. Hydro has already spent $356 million of its planned $794-million contingency, only two months into an eight-year contract.

It noted, however, that BC Hydro is working on an accelerated schedule, targeting a completion date of 2023, which could mean heavier spending early on. But again, it said it needed more information.

The panel found it difficult to say whether the river diversion—which must be started between Sept. 1 and Oct. 1 in any given year when the river levels are lowest—is on schedule. It said missing the milestone would boost costs.

BC Hydro estimated that a one-year project delay would cost $630 million, while auditing firm Deloitte LLP said the project could go up to 50 per cent over budget in its submissions to the commission.

Unknown interest rates and possible underestimations on the cost of two major contracts that have not yet been awarded are other variables that could bump up the cost.

The panel is asking for answers to its outstanding questions by Oct. 4.

By the end of the year, the project will have cost $2.1 billion, it said.

“In conclusion, the panel has identified numerous areas of information gaps which require supplemental evidence and analysis from B.C. Hydro and/or the public in order to make definitive and conclusive findings,” the report said.

The preliminary report, which will inform the province’s decision about whether to continue with construction, was conducted in six weeks, at the request of Energy Minister Michelle Mungall shortly after the NDP took over the provincial government. When Mungall requested the review on Aug. 2, she said it would be used to determine whether Site C is in the public interest.

She did not ask the commission to give any recommendations—or ask it to consider impacts on First Nation rights, the environment or agriculture, issues that have sparked strong opposition to the project.

A final report from the commission is due Nov. 1.

Mungall said she would comment on the preliminary report today.

Work is continuing on the site during the review.

The BC Liberals, who approved Site C in 2014, and other supporters say about 2,500 jobs depend on the project and that it would create clean energy for the future.

The BCUC is holding public input sessions in Fort St. John on Oct. 1 and 2, and a First Nations input session Oct. 3. A public meeting will be held in Hudson's Hope on Sept. 30.

To sign up for the sessions visit www.sitecinquiry.com/public-community-input-sessions.

—Times Colonist, with files from Aleisha Hendry

© Copyright Alaska Highway News

Comments

NOTE: To post a comment you must have an account with at least one of the following services: Disqus, Facebook, Twitter, Google+ You may then login using your account credentials for that service. If you do not already have an account you may register a new profile with Disqus by first clicking the "Post as" button and then the link: "Don't have one? Register a new profile".

The Alaska Highway News welcomes your opinions and comments. We do not allow personal attacks, offensive language or unsubstantiated allegations. We reserve the right to edit comments for length, style, legality and taste and reproduce them in print, electronic or otherwise. For further information, please contact the editor or publisher, or see our Terms and Conditions.

comments powered by Disqus
Alaska Highway People's Choice 2020

Popular News

Lowest Gas Prices in Chetwynd, Dawson Creek, Fort Nelson, Fort St John, Tumbler Ridge
British Columbia Gas Prices provided by GasBuddy.com

Community Event Calendar


Find out what's happening in your community and submit your own local events.