I have followed BC Hydro closely for years. I’ve communicated with current and former BC Hydro officials and people involved in senior roles in other electrical utilities. Until the Horgan Government was firmly in place, I interacted with unelected and elected NDP members, including people now sitting at the Cabinet table, as well as local people in northeast BC who are knowledgeable about lands surrounding the Site C dam site.
I remain disturbed by the BC NDP’s reversal from long held opponents of Site C to cheerleaders willing to spend double or more than the estimate in place when BC Liberals proudly issued the project’s go-ahead.
Since British Columbia’s two major political parties share responsibility for this execrable waste of public funds, and because corporate media has been largely uninterested, the general public is woefully uninformed about BC’s largest ever publicly funded megaproject.
We can thank reader supported news sites The Narwhal, The Tyee, individual Peace River property owners and non-profit groups for trying to refute the flood of misinformation distributed by politicians and beneficiaries of the billions being spent to create expensive electricity to meet non-existent demand.
One writer with a deep understanding of issues affecting the lands of northeast BC is The Narwhal’s Sarah Cox. Her March 10 explainer is informative:
For seven months, there was silence.
Then, on Feb. 26, the B.C. government released a barrage of information about the Site C dam’s stability issues and dropped a financial bombshell.
The dam, announced in 2010 as a $6.6 billion project, will now cost $16 billion to complete.
That makes Site C the most expensive dam in Canadian history — and nowhere near the biggest. Not even close.
Misinformation and secrecy have become bywords at BC Hydro and at the Premier’s office and the provincial energy ministry. Because decision makers involved with Site C are determined to spread misinformation, they rely on secrecy to keep evidence out of the view of project critics and the BC Utilities Commission.
Even within the government’s limited releases of information, we see troubling evidence of deception. Ms. Cox noted this revelation from former deputy finance minister Peter Milburn:
BC Hydro tried to fire its independent oversight adviser, Ernst & Young, after the firm wrote a report “identifying many deficiencies” in BC Hydro’s systems and flagged the project’s growing risk.
BC NDP knew the contents of the Milburn report before the 2020 snap election. They kept it entirely secret from voters and pretended that all was well with the Peace River project. Talking points issued to NDP candidates stated that government had put enhanced oversight in place to ensure best practices were being followed at Site C.
Milburn’s report noted that besides BC Hydro’s attempted removal of independent oversight adviser E&Y, government’s own project assurance board was loaded with people actively involved in managing the project. Even people untrained in business will understand the phrase, “Due diligence requires independence.” If wrongdoers supervise themselves, the supervision is worthless.
It shows the determination of CEO Chris O’Riley and his irresponsible patron in the Premier’s chair. In the words sung by Freddie Mercury:
The show must go on
I’ll face it with a grin
I’m never giving in
On with the show…
The Premier said abandoning Site C would lead to immediate and massive electricity rate hikes. Sarah Cox provides evidence this is untrue.
BC Hydro has regularly carried billions in phantom regulatory assets it does not want to write off. Besides, Horgan could move Site C debt to the province. This is a project planned solely to meet political objectives of the province’s last three Premiers. Taxpayers, rather than ratepayers, should bear the load, just as we have for previous blunders by elected officials and senior bureaucrats.
NDP cannot argue that Site C is the most economic way to gain additional capacity. If the dam becomes operable for $16 billion, when operating and distribution costs are added, the electricity produced will be delivered for about 17 cents a kilowatt-hour. That is more than 4x the cost of wind power offered to Alberta in 2018.
Since dam proponents cannot dispute those numbers, they claim that BC needs dispatchable electricity. But almost 40% of electricity in Germany, a country sited at latitudes similar to those of British Columbia, came from wind and solar power in 2020. The laws of physics do not operate differently in Europe and that country does not have access to grid management technology unavailable in Canada.
Premier Horgan uses job creation as an important Site C justification. But the NDP’s own 2017 campaign material describing PowerBC skewers that and their other 2021 arguments.
Ms. Cox adds more:
[Nuu-chah-nulth Tribal Council president Judith] Sayers pointed to the B.C. Indigenous Clean Energy Initiative, which she said has created 1,089 jobs over the past six years with approximately $3 million in annual federal and provincial funding. That work involves installing heat pumps, solar, geothermal and other climate-friendly projects in First Nations communities.
In the process, 418,000 tonnes of greenhouse gas emissions have been prevented and almost $2 million has been saved in annual energy bills, Sayers said. “This is only one small fund.”
Keep in mind that 3.5% annual interest on $16 billion is $560 million.
Imagine what could be achieved if $16 billion were dedicated to province-wide energy efficiencies.
W.A.C. Bennett once said the NDP in B.C. couldn’t run a peanut stand.
John Horgan is proving W.A.C. was right.
Categories: BC Hydro, Horgan, John, Site C
I did a search for ‘W.A.C. Bennett once said the NDP in B.C. couldn’t run a peanut stand.’ and came up with many results, especially the one at the Tyee by Rafe Mair https://thetyee.ca/Views/2009/01/19/WACNDP/
In Rafe’s words, in 2009, W.A.C. Bennett was asked: ‘Which party would he choose?’ It wouldn’t be the BC Liberals.
“Ms. James, if you would like to join May and me for some sarsaparilla and strawberries, I’ll be pleased to sign your membership application.”
But of course, if Rafe were asked in 2021 to choose which party …. he’d probably say … (hands up in the air)
Thanks again, many thanks, for your really important work. And you’re right, Sarah Cox at The Narwhal and Andrew Nikiforuk at The Tyee remain required reading. However, that being said, British Columbians (of all political stripes) should also take the time to download and print a copy of the Milburn Report if they want to understand what’s really been going on at Hydro. Cheers
Thanks Norm for continuing to present us with reality. A commodity in short supply these days.
I want to mention a pending auditing/accounting change to be made a year from now. The recently appointed BC Auditor General has just reported, in his “Report in Financial Audit Work For the 2019/20 Fiscal Year”, that there is to be a switch from GAAP to PSAS standards. It is early to say what this means for disclosure to BC citizens but I like to be optimistic .
It is just possible our new AG is insisting on higher standards of accounting/auditing and financial disclosure, as a condition for taking on the job.
Needed when making a vote is reliable and accurate information and just maybe we are at a turning point in this regard.
Thanks Norm for publishing and sharing this.I still believe the project will be completed and power from it will find markets but the cost will be high.But your revelati
Obviously your comment didn’t get finished, but I’m wondering where these markets will be when all other jurisdictions will have cheaper power already. Many businesses will re-locate to that cheaper power or be forced to generate their own for cheaper than they can purchase BCHydro when you add in another $16B+ in debt.
As far as completion goes, the experts’ comments on the proposed patch do not inspire confidence. Drilling 125 large holes in the soft shales is just another 125 places for water to infiltrate and degrade the material further. Cohesionless bedding planes are the problem and with added water that won’t improve. Moisture triggers rebound which coupled with hydrostatic head from the pool can exert forces on the the powerhouse structure that go beyond design parameters. I remind people regularly that this will not the first structure to fail after being situated in the soft shale of the Peace Valley. Gamble at your peril.
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Fifteen years ago, I asked Premier Campbell, by letter, if he would make extractive new projects in BC require remediation bonding before getting an operating certificate. I was hardly surprised when Gordon remained silent.
Politicians universally presume the trusting public will always accept what is said,’ if anything, about risk to the public purse.
Site C is a good example of this process. I suspect very few are even thinking about risks that are to be assumed by citizens. Citizens of a country in South America were stuck with the cost of a very large dam on the east side of the Andes. China financed the dam that ended up silting up and a stranded investment. Paying out the debt became a legal issue that ended up with the country paying in crude oil. Sort of an unplanned impoverishment for the population.
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Heir Horgan and his mindless, cowardly NDP caucus have never once included in their gobbldlygook mathematical pronouncements the other side of the balance sheet … THE LOSSES $$$$$$$$ …. such as the price tag of drowning 6,500 hectares of Class 1 agricultural land, the lost agricultural production over the next 100 years, all the lost timber values, losses in non agricultural real estate, wildlife values and so on. Their model is so outrageously flawed it’s criminal. I’m making a citizens arrest … !
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This is an interesting twist on a stranded asset… thank you for that.. One question: What was the South American country involved? I don’t recall the story.
Good point and story Erik.
Quick question: what was the South American country here?? I have no recollection of this one.
I think it was either Bolivia or Paraguay. John Perkins talks about his working as an economic hitman in South America and his work was designed to talk locals into taking on huge debt to get electricity production where there was none.
When exchanging chat with my old school mate, Brian D’Aoust, the fish scientist, he mentioned having taken a contract to examine the impact down stream of a large hydro dam. From what he said it sounded like the same river system. He mentioned getting paid in cash by a gangster type who operated through a wire fence. Brian’s report on the likely effect on fish etc was probably something that the financial folks wanted to fill in a space on the paper.
If knowing the river system name and country is needed I can ask Brian. John Perkins wrote about a number of places in South America, including Ecuador, on the Pacific side.
More Confessions of an Economic Hit Man: This Time, They’re Coming for Your Democracy:
the crooked corruption at site will never stop-too many billions at stake with the crooked corrupt bc govt of the day leading the charge and the crooked corrupt bc politicians following suit along with the crooked corrupt corporations building site c–this corruption will not change untill the residents of bc get controll of the province and oust the corrupt govt who is spending our tax dollars freely-if anyone thinks jh is running bc think again-the crooked corrupt corporations are running bc and jh is taking his marching orders from them-all involved in the site c fiasco should be held crimminally accountable and jailed for treason against bc for the destruction of the peace river valley and its wildlife habitat all for crooked corrupt corporate and political gain-mark meiers-charlie lk bc
I am not able to find out who is insuring the site C dam against failure and liability and at what cost. Does anyone have details?
I question there being anyone who would offer that insurance. If you ask the Provincial Government they will likely answer with “self insurance”.
A good question, worthy of an FOI inquiry asking if the province is insuring contractors against catastrophic losses during construction.
I doubt that private insurers have been ready to carry the risk of building dam foundations on compressed mud.
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I do believe that Horgan completely lied about rates would go up, and all the doom and gloom He sure piles it on. The deceit and the new normal and seemingly acceptable lying and hypocrisy has to get to a point of unsustainability. One would think. Wrong !!
Sure the previous corrupt governing cartel started it all but for Horgan to use that pathetic excuse to continue, and poor him and his party were handed this bewitching thing, and its not our fault that we have to continue it, and its past the point of no return is so putrid smelling. Ooohh. Yes, the the devil must have made him do it. That’s it.
The past the point of No Return Lie must be challenged. These politicians need to be challenged before they write it into legislation one day that Hey, it’s okay to lie and cheat and deceive, be unaccountable and not have to march with any sort of morality while governing. Oh yeah, it almost seems written in stone now.
Site C bywords: misinformation and secrecy.
But this has always been the NDP’s operating credo. They ceased being an honest party in the Glen Clark era and have continued this downward spiral with credibility ever since.
Sad to say this but, If premier Horgan is lying, then the Horgan cabinet is lying; which means the NDP back bench is lying; means the entire government is founded on a vast hill of lies and deceit.
It is time for the back bench to swallow its pride and tell Horgan straight up, with change your direction or we will walk. they won’t as the entire Horgan government doesn’t have a shred of decency, honesty or truthfulness. All are moral cowards, playing the part of the “big man/woman”, while in fact it is bit part in a tawdry play.
I said this on on another blog post.
There is really no “Point of no return” for construction projects and the term is wrongly used for politcal reasons.
“Point of no return” is an aviation term, meaning there is not enough fuel to return to your departure airfield and if doing so, you would crash.
With Site C, stopping the money flow, would stop the projects and spent monies would be written off, that will embarrass the government but more embarrassing for the bureaucracy who have mismanaged the project.
With the NDP using the term “Point of no return” means that they will continue shoveling huge amounts of monies into a project which time has come and gone.
The cowardice of Horgan and the NDP is clearly evident as they are afraid to admit to a mistake and so the sunk funds climb ever higher. Reminds one of FastFerries.
By the late 1980’s there was around 100 km of disused subway tunnels in Germany, due to the fact that the costs escalated much higher than any transit benefits they would bring and construction stopped. This literally “sunk” funds amounted to billions of D-marks spent on holes in the ground.
In 2021, some of the subways have been completed while others have been repurposed for traffic tunnels, mushroom farms, storage or just bricked up waiting for a future use.
It is very hard to repurpose a dam on shifting shale.
Interest on 16 billion =560 million a year or 46.6 million a month or 1.5 million a day Amortised over 50 years is something like 28 billion dollars 16 billion +28 billion =44 billion that our grandchildren are saddled with this debt better to stop it now it is doutful if its going to hold water anyway hope my maath is right
The question is; “Who owns the debt?”
Really, this is the most important question, who is going to grow fat off the BC taxpayer.
Remember the ill-built Canada Line (the only heavy rail metro in the world, built as a light metro and has less capacity than simple streetcar, Pays the Canada Line’s P-3 concessionaires, SNC Lavalin and the Caisse De Depot over $110 million annually to operate the Canada Line.
This cost is easily three times more for a classic light rail operation.
Again, who benefits?
Sorry Rick, I thought wrongly that Norm was asking.
Again, if it is important I will ask Brian the name of the river and country. Also I will dig back into John’s book to see what and where he was talking about.