The price to complete the Site C dam project in northeastern British Columbia has skyrocketed but the government is still going ahead with completion.
The B.C. government reported on Friday the project will now cost an estimated $16 billion to complete, up from the previous estimate of $10.7 billion.
The project is now expected to be completed in 2025, a year after its original completion date.
The province said the costs to cancel the project, including sunk costs and money to remediate the site, would be at least $10 billion. That number does not include the costs of replacing the lost energy and capacity Site C would have provided.
“When we made the decision to move forward with Site C in 2017, none of us could have imagined the impact that the pandemic would have on projects here in B.C. and around the world,” B.C. Premier John Horgan said.
“The project is facing new challenges, and we are committed to managing it in the best interests of British Columbians. Cancelling it would cause people’s electricity rates to skyrocket, and we will not burden people with additional financial stress during these difficult times with nothing to show for it.”
Site C is already 50 per cent finished. The government is promising the hydroelectric dam will help ensure “British Columbians have clean and affordable power for decades to come.”
If ratepayers were to pay off the existing Site C debt over 10 years, then an immediate increase to BC Hydro ratepayers would be 26 per cent and would stay in effect for a 10-year period. This is equal to $216 a year over 10 years.
By continuing work on the project, Site C will not impact rates until it comes into service, with costs being repaid over the 70-year estimated lifetime of the project.
Continuing with Site C at the current cost estimate means cumulative bill increases will be about $36 a year higher for the average residential customer, or 3 per cent higher by 2030 than under BC Hydro’s prior rates forecast.
Multiple experts have now reviewed the dam project both for financial feasibility and safety.
The province released a geotechnical review from two independent experts, John France and Kaare Hoeg.
Their review confirmed the foundation enhancements developed to address geotechnical issues on the project’s right bank will work and will ensure the project meets safety standards.
The B.C. Utilities Commission reported in December 2019 that a geological risk has materialized on the right bank of the Peace River.
“Our government has taken this situation very seriously, and with the advice of independent experts guiding us, I am confident in the path forward for Site C,” Energy Minister Bruce Ralston said.
“B.C. needs more renewable energy to electrify our economy, transition away from fossil fuels and meet our climate targets. Site C will help our province achieve these things and is currently employing about 4,500 people in good-paying jobs.”
Site C will be the third hydroelectric dam on the Peace River and the power from it is expected to power 450,000 homes in British Columbia over the dam’s lifetime.
To manage the significant cost increases, the province has named Doug Allen as the new chair of the BC Hydro Board. Allen most recently was appointed to the board of directors at Insurance Corporation of British Columbia and in 2015 was the interim CEO of TransLink.
He also has previous experience as the interim president and CEO of BC Ferries, when it was moved to a stand-alone authority from a Crown corporation.
Allen replaces Ken Peterson, who was appointed chair in 2017.
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