Like BC Liberals before them, BC NDP is dishonest about BC Hydro operations and the Site C megaproject. Government joins BC Hydro and continues lying about demand growth. At the same time, they hide embarrassing information about the dam and its out of control budget. The Horgan path is inexplicable when pre-2017 NDP statements are reviewed.
The explanation will emerge years from now when NDP opponents are denouncing the party’s competence. Liberals used BC Ferries as a hammer for 15+ years after the 1990s, but financial blunders at BC Hydro are many times larger.
Failure is predictable. Research teaches that megaprojects are:
…extremely risky ventures, notoriously difficult to manage, and often fail to achieve their original objectives [because of] the dimensions that make megaprojects so difficult to manage, including their size, uncertainty, complexity, urgency, and institutional structure.
Site C is an unneeded megaproject. Eight years ago, writer/filmmaker and environmentalist Damien Gillis was on target:
If you take BC Hydro’s recently released draft Integrated Resource Plan (IRP) at face value, you will conclude the following:
1. BC faces a serious power shortage in the coming decades
2. In order to meet this gap, we need a combination of conservation, plus the $8 Billion Site C Dam (sure to cost far more in reality)
3. As a province, we currently need 57,000 gigawatt hours (GWhrs) of electricity per year
4. BC Hydro should and can supply the massive, energy-intensive Liquefied Natural Gas (LNG) industry with public electricity
There’s only one problem: virtually none of this is true.
Hydro’s dismal track record
For starters, Hydro has a long history of seriously overestimating power demand. In the early 80s, when Site C Dam was first proposed for the Peace River, concerned citizens were told we desperately needed the power. Failure to build Site C would surely mean brown-outs across the province. Then the economy changed and the project was shelved. Guess what? No brown-outs.
Throughout the past several decades, Hydro has consistently been off by 10-20% (sometimes more) in its forecasting – which our resident economist Erik Andersen has detailed in these pages – and that proud tradition continues today.
This chronic overestimation of our power demand helped justify a massive investment in sweetheart private power contracts (IPPs) over the past decade, for which we are now paying 2-3 times the market rate. And, because it mainly comes at a time of year when we can’t use it (the Spring freshet period, when our needs are at their lowest and our big dams at their fullest), we are forced to dump much of it at a loss to our neighbours. In fact, we lost some $360 million last year on power sales, due to these IPPs.
I accuse BC Hydro of lying without fear of retribution. It is an indisputable fact and a habit for them. In 2012, economist Erik Andersen wrote that it was critically important to question statements made by BC Hydro and the provincial government. He warned:
Your Government and BC Hydro are apparently intent on borrowing and spending, in your name, $30,000,000,000 by 2017. If left to follow the path set out in the most recent BC Hydro forecast, the corporation’s total liabilities will explode to $80,000,000,000! As a shareholder, ratepayer and guarantor of the debt are you ready for this experience?
Sadly, Erik underestimated the financial disaster at BC Hydro. When last reported, BC Hydro’s contractual obligations were more than $52 billion, almost all of that to IPPs and, at the end of 2020, the utility’s direct liabilities were $34 billion and rising by about $300 million a month.
BC Hydro’s December 2020 quarterly report stated:
BC Hydro continues to invest significantly in capital projects/programs to upgrade its existing assets and build new infrastructure, including the Site C Project, Peace Region Electricity Supply (PRES), LNG Canada Load Interconnection, Bridge River 2 Upgrade Units 7 and 8, Transmission Wood Structure and Framing Replacement, and Distribution Wood Poles Replacements.
Much of this spending is to serve the needs of large fossil fuel producers who will pay less than half the per kilowatt-hour cost of Site C power. Erik Andersen notes that Site C was part of the Liberal “trillion dollar” LNG prosperity fantasy but reality is that energy needed for liquefaction will be gained by burning almost-free natural gas. Andersen warned:
If all they plan to do is power the lights and coffee machines at these plants, then do we really need to flood an 80 km stretch of the beautiful Peace Valley, impacting close to 60,000 acres of prime agricultural and forested lands? Do taxpayers really need to spend – let’s call it what it is – over $10 Billion on a dam we can’t afford, all to power just a fraction of the LNG industry?
We know now that Site C is not a $10 billion dam. At best, it’s $16 billion.
With the infrastructure needed to deliver Site C power to the natural gas industry, that pushes the hidden fossil fuel subsidy to the region of $20 billion, a mighty large imposition on residential consumers and small to medium businesses that need to buy electricity.
Of course, focusing on financial costs ignores the unquantifiable factor that makes Site C such an egregious mistake. Flooding the Peace River valley breaks faith with promises made to Indigenous people, ruins BC’s best northern farmland, and harms ecosystems across a broad area, lands populated by Indigenous people who were promised in the late 19th century that nothing would be done to interfere with their way of life.