An independent review of the Site C dam project will be delivered to Premier John Horgan and his cabinet this week. The interim report, produced by the BC Utilities Commission, will drive a decision that will shape the province’s energy future.
It is one of the most significant – and most difficult – decisions facing the province’s new government.
When then-premier Gordon Campbell brought five planeloads of cheerleaders up to the banks of the Peace River in 2010 to announce he was dusting off plans for the Site C dam, he was promising British Columbia a cheap, reliable source of hydroelectricity to meet the province’s future needs. The project would create thousands of jobs, encourage economic growth and would help the province stay on track as a leader in climate action.
Much has changed since Mr. Campbell’s visit to the banks of the Peace River. The cost of producing alternative energy – wind and solar in particular – is falling, and the risks of cost overruns on the $8.8-billion megaproject have been laid out by a respected accounting firm. The accountants have also cast doubt on BC Hydro’s forecasts for rising electricity demand.
Opponents – local ranchers, environmentalists and Indigenous communities – hope the new NDP government will nonetheless kill the project and restore the section of the Peace River valley that has been drastically altered to lay the foundation for the new dam. Many of the project’s opponents are influential within the NDP.
Even with almost $2-billion already spent on construction and the project moving ahead at full steam, expert submissions to the BCUC – the utilities commission – suggest it would still be less expensive to cancel the project and contract for renewable energy producers to meet new demand.
(Naturally, the Crown corporation responsible for building the dam, BC Hydro, disagrees with those submissions.)
The BCUC is wading through all this input and will calculate the costs of completing, suspending or cancelling the megaproject. As well, the BCUC has been asked to look at alternative sources of clean energy and how much power B.C. is expected to need in the future.
A final report is due Nov. 1 – just days before the NDP convention where the deep divisions in the party on the fate of the dam will be in full view. Whether Mr. Horgan and his cabinet decide to pull the plug or carry on, it will not be a unifying moment for his party.
The New Democrats may be sorely tempted to cancel the project and pin the blame on the former Liberal government for pursuing a vainglorious, ill-advised project. Killing Site C would also strengthen the NDP’s important partnership with the BC Greens. It would put the government in good stead with the clean-energy sector, which offers the prospect of attracting new private capital investments in renewable-power projects. And, cancellation would slow the growth of BC Hydro’s burgeoning debt load and take pressure off rates – for a government that promised to make electricity costs more affordable, that’s not a small consideration.
There are, however, major factors that could tilt the balance in favour of the project.
Mr. Horgan repeatedly attacked BC Hydro’s contracts with private power producers in the past, decrying the enrichment of private companies at the public’s expense. He is more inclined to favour public ownership and control of the province’s electricity resources.
The Premier comes from the trade-union movement, and the prospect of handing out thousands of pink-slips to the construction workers on the job at Site C would weigh heavily against cancellation. (He could make himself a hero with the trade unions if he could rejig the project labour agreement to ensure more union jobs.)
With the province struggling to get curb greenhouse gas emissions, Site C does promise decades of clean energy.
Finally, the BCUC could find that BC Hydro did succeed in its quest to get the project past the point of no return.
“It’s a really tough decision,” said energy economist Mark Jaccard, a professor of Sustainable Energy at Simon Fraser University. Combing through all the thousands of pages of technical information submitted to the BCUC, in favour and against the project, he has found no easy answers.
“Be very suspicious of anyone who presents it in simple terms. … I could make a strong argument for not building the Site C dam, and I can make a very strong argument for building it.”
But he says there one more factor that the Horgan government should consider, and it’s not part of the BCUC’s scope of review: If B.C. is to get back on track with its climate-action targets, there will be a need for the electricity that the dam would provide.
“If we intend in British Columbia to meet our economic, efficient share of national greenhouse-gas targets,” Dr. Jaccard said, “we will use all the Site C electricity soon after its completion.”
British Columbia would have been better served to have the BCUC findings before a shovel was stuck in the ground. But Mr. Horgan and his government will have the data now, and they will wear this decision for generations.