The following article was first published in February. It is still relevant today because, despite a change in government, agents of Site C beneficiaries continue to spread falsehoods trying to convince citizens that spending billions on a near worthless project is “good business.”
Besides, as the vilest Writer has his Readers, so the greatest Liar has his Believers; and it often happens, that if a Lie be believ’d only for an Hour, it has done its Work, and there is no farther occasion for it.
Falsehood flies, and the Truth comes limping after it; so that when Men come to be undeceiv’d, it is too late; the Jest is over, and the Tale has had its Effect…
Jonathan Swift, The Examiner, 1710
Dave Conway, BC Hydro’s Community Relations Manager for Site C, submitted an article to publications this week. It included these statements:
…our long-term forecasts show B.C.’s electricity needs will grow by almost 40 per cent over the next 20 years…
Site C is the most cost-effective way to meet our future electricity needs…
I think we’re making a big mistake, a very expensive one,” Swain says in the video. “Of the $9 billion it will cost, at least $7 billion will never be returned. You and I as rate payers will end up paying $7 billion bucks for something we get nothing for.”
Since 2005, domestic demand for electricity in B.C. has been essentially flat, making it difficult to justify the dam which will flood 107 kilometres of the Peace River and destroy thousands of hectares of prime agricultural land.
“There is no need for Site C,” Swain says. “If there was a need, we could meet it with a variety of other renewable and smaller scale sources.”
Swain wrote an article for the Vancouver Sun that provided further information:
…With no domestic need for the electricity from Site C, the province has been pivoting from one illusory source of new demand to another.
At first it was LNG… Then it was a trade with Alberta… But the delivered cost of Site C power in Alberta would be $140 to $160/MWh, depending on its ultimate destination, or double the cost of local production.
…Realistically, all B.C. Hydro will be able to do with Site C power is sell it to the US, at spot market prices of $25 to $35/MWh. Under reasonable assumptions, the present value of twenty years of such sales would be about $1.6 billion, or 18 percent of the currently estimated $8.8 billion cost of the project. This leaves ratepayers with a stranded debt of $7.2 billion, for which they will get nothing.
[There are] two attractive new energy sources available to us. The cheapest is our entitlement under the Columbia River Treaty, some 1300 megawatts of capacity and more than 4,000 GWh of energy, bought and paid for long ago. At the moment, we sell it right back to the Americans at spot prices.
…Bottom line: B.C. Hydro is going hell for leather in pursuit of a wildly unprofitable project that will cost us, its owners, billions. And that’s without accounting for more “significant adverse environmental effects” than any project that has ever been approved before, nor for the further erosion of the treaty rights of the First Nations of the Peace.
Mr. Swain’s comments about consumption are not at odds with what is known by In-Sights readers.
There has been no increase in the use of power by British Columbia’s residential, commercial and industrial consumers from 2006 to 2016. Yet, the quantity of the utility’s purchases from IPPs more than doubled and the value paid in 2016 was 274% of payments for private power in 2006.
Flat domestic consumption and increased IPP purchases left BC Hydro in a difficult situation. The only alternative to dumping surplus power on already oversupplied markets outside BC – and further depressing prices – was to reduce production in Hydro’s own facilities. That means “testing” spillways – dumping water without generating power.
Admitting publicly to an oversupply would threaten BC Hydro’s entire capital expansion program. Bureaucracies, by nature, hesitate to change course. But, when incorrect policies have been followed for years, new directions are fiercely resisted. Admitting to error is an uncommon strength. Crown corporations are further handicapped by directions from politicians who may have objectives less influenced by good policy than by the need to deliver benefits to friends and financial sponsors.
Bureaucrats don’t have the power to pull the plug and politicians seldom do it for fear of offending vested interests. “The problem is not that government is spending more on new things, but that it spends massively on old things.”
In British Columbia, the old things are conventional power systems; the new things would be conservation and safe renewables. Dr. Savoie, who had a very short career in government, complains that bureaucracies gradually lose sight of their fundamental purposes:
Front-line workers have been sacrificed to make way for offices full of paper-pushers, managers, supervisors and evaluators.
Professor Savoie offers a solution that agencies serving the public should observe. In simple words, the message is:
Figure out what you are supposed to be doing, then do it.
As I wrote in The Tyee, BC Hydro: From Public Interest to Private Profits, W.A.C. Bennett established this vital crown corporation to provide reliable, affordable power to British Columbians.
That’s what BC Hydro should be doing.
Instead, it is forcing citizens to pay much higher prices to provide financial benefits to foreign owned companies and a band of me-first IPP slicksters and a group of political contributors gaining returns on their liberal investments by sitting in the boardroom of BC Hydro.