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B.C. Pushes Forward with Site C Hydro Megaproject Despite $16-Billion Price Tag

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Premier John Horgan has given the green light for work on British Columbia’s Site C hydroelectric dam to proceed, citing termination costs of more than C$10 billion and expert opinion that the geotechnical problems that have haunted the project can be fixed. Members of the West Moberly First Nations say they’ll see the province in court.

The decision to go ahead with the Peace River megaproject comes even as the province reveals that its costs have ballooned to $16 billion, virtually double the original estimate of $8.775 billion, writes CBC News. The new figure arrived with the recent release of former deputy finance minister Peter Milburn’s review of the project, which the province requested last year after BC Hydro expressed strong reservations about Site C’s “budget, schedule, and scope”, explains CBC.  

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Horgan cited Milburn’s review as a chief impetus behind the decision to proceed, noting in particular that its 17 recommendations will eliminate the worry of “engineering bias”: that is, “the idea that no problem was so big it couldn’t be overcome,” CBC explains. An earlier report also confirmed that implementing stability and drainage solutions proposed by BC Hydro “would result in a project that meets Canadian Dam Association guidelines.”

While the province did not provide a full breakdown of costs, it said about 50% of the overruns can be attributed to geotechnical issues and the pandemic.

The Narwhal writes that the province won’t be releasing details about the other half of the overruns, because doing so “would create commercial risk for BC Hydro.”  

Also left unexplained is the shocking uptick in termination costs. Now estimated at $10.2 billion “in sunk costs, contract termination, and environmental remediation,” writes CBC, the potential cost of cancelling the project has soared well beyond the $1.8 billion estimated by the BC Utilities Commission in 2017. At this point, CBC says cancellation would “lead to BC Hydro rate increases of up to 26% for 10 years, or $216 per customer per year.” 

Both the provincial Liberal and Green parties criticized Thursday’s announcement. “Liberal energy critic Tom Shypitka argued that ‘although the Liberals started the project and supported its completion, it is the NDP that must wear the final costs’,” CBC writes. 

“They took ownership of the project, did their due diligence and signed off and said: ‘Yes, we’re going ahead.’ It’s their show,” Shypitka said.

Green Party Leader Sonia Furstenau rebuked the NDP for failing both its fiduciary duties and its responsibility to protect the environment. “We are going to lose an incredible amount of farmland, biodiversity, an entire river ecosystem for a dam that will produce energy at an astronomical cost,” she told CBC.

West Moberly First Nations Chief Roland Willson declared himself disappointed but unsurprised by Horgan’s decision. His community is suing the B.C. government, BC Hydro, and the Attorney General of Canada in civil court, arguing that “the construction of Site C is a violation of its rights set out in Treaty 8, signed in 1899 with First Nations in northeastern B.C., northern Alberta, and northwestern Saskatchewan,” CBC states.

The West Moberly suit is particularly concerned with BC Hydro’s plan to flood nearly 130 kilometres of the Peace River and its tributaries which fall largely within the Nation’s territory.

The Narwhal says BC Hydro’s own accounting predicts that Site C “will destroy 42 sites of cultural and spiritual significance to First Nations, including burial grounds, medicine collection areas, offering places for ceremonies and prayers, and locations associated with oral histories.”

It adds that a joint provincial and federal review panel “found the dam’s impacts on hunting, fishing, non-tenured trapping, and other traditional land uses would likely be adverse, significant, and impossible to mitigate.”

Union of BC Indian Chiefs Secretary-Treasurer Kukpi7 Judy Wilson said Site C “has never had the free, prior, and informed consent of all impacted First Nations”, adding that “B.C. did not even attempt to engage First Nations about the safety risks associated with the stability of the dam in the recent reviews.” 

Chief Wilson added: “It is unfathomable that such clear human rights violations are somehow okay by this government.”

The Narwhal says Site C “will destroy habitat for more than 100 species at risk of extinction”, adding that the “rare, low-elevation northern valley is a continental flyway for migrating birds who depend on its safe haven during extreme weather events in the spring and fall.”

Meanwhile, a working paper published late last year found that, at current costs, the dam cannot deliver enough benefits to justify its price tag. In a recent interview with Energi Media, study co-author and University of Ottawa climate and energy economist Nic Rivers explains that while Site C could provide “additional value” if it were used to help Alberta decarbonize its grid, those calculations were based on an estimated project cost of $11 billion. 

As study co-author G. Kent Fellows notes in a recent Twitter post, at $16 billion, “there is now no reasonable scenario wherein Site C will produce a net benefit.” 

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