The controversial megaproject to build the Site C hydroelectric dam on the Peace River in northeastern BC will be built after all.
This morning, Premier John Horgan announced that the project will continue following the findings of a BC Utilities Commission (BCUC) review conducted over three months.
As well, the latest official project budget has risen from $8.8 billion to $10.7 billion.
A cancellation would also be highly costly, as the review found that it would cost BC Hydro ratepayers at least $4 billion, with the provincial government taking on the debt – raising BC’s level of taxpayer-supported debt from $44.6 billion to $48.6 billion. In the process, it would affect other government programs and priorities.
“Megaproject mismanagement by the old government has left B.C. in a terrible situation,” said Premier John Horgan in today’s announcement. “But we cannot punish British Columbians for those mistakes, and we can’t change the past. We can only make the best decision for the future.”
“It’s clear that Site C should never have been started. But to cancel it would add billions to the Province’s debt – putting at risk our ability to deliver housing, child care, schools and hospitals for families across B.C. And that’s a price we’re not willing to pay.”
Such a decision has angered the BC Green Party, which campaigned against the dam during the recent election over its concerns that it will destroy farmland and ecosystems and that the forecasted energy demand does not warrant the new infrastructure.
However, the BC NDP-BC Green power partnership only required the BC NDP to send the project to the BCUC for review – not an assurance of cancellation.
“Our caucus is extremely disheartened by this decision. It is fiscally reckless to continue with Site C and my colleagues and I did everything we could to make this clear to the government,” said BC Green Party leader Andrew Weaver.
“The government’s argument that cancelling Site C is too risky due to debt is incredibly cynical. This is a question of priorities. They had no problem adding billions onto the public debt to cancel the tolls on the Port Mann and Golden Ears bridges, transferring those costs to people outside of the Lower Mainland to pick up votes in a couple of swing ridings.”
But Horgan asserted those claims with the following: “The old government recklessly pushed Site C past the point of no return, committing billions of dollars to this project without appropriate planning and oversight. Our job now is to make the best of a bad deal and do everything possible to turn Site C into a positive contributor to our energy future.”
BCUC review findings
The BCUC report, released last month, warned that the project is unlikely to meet its November 2024 completion and could cost 20% to 50% more when fully complete. The total cost at completion may exceed $10 billion “as there are significant risk remaining which could lead to further budget overruns.”
At the same time, a cancellation of the project would cost $4 billion, with nothing to show for from the investment, and a steep 10% rate hike on BC Hydro customers. There would also be a $1.8-billion cost to remediate the construction site.
Additionally, the BCUC found that the option to suspend the project would result in the highest cost and other implications.
“The cost of putting the Site C project in a state of suspension, awaiting future remobilization in about five years, would be just as costly as terminating the project,” reads the BCUC report. “In addition, there are the remobilization costs and the costs to complete the project beginning in 2024. There is no certainty that the remaining project budget would be adequate to complete the construction following remobilization in 2024.”
The electric utility says over 2,000 people are working on the project near Fort St. John.