The estimated price tag of the hydroelectric project in the province’s northeast has now ballooned to $16 billion, nearly double the originally approved budget of $8.775 billion in 2014.
But the government says the cost of reversing the project would be even higher, and could have a damaging effect on the financial health of B.C. as a whole.
According to the B.C. Ministry of Energy, Mines and Low Carbon Emissions, the immediate cost of terminating the project would be $10.2 billion in sunk costs, contract termination and environmental remediation. The result, the government says, would be BC Hydro rate increases of up to 26 per cent for 10 years, or $216 per customer per year.
It could also result in B.C.’s credit being downgraded and BC Hydro becoming reliant on taxpayer subsidies rather than continuing as a self-financing Crown agency.
Energy Minister Bruce Ralston argued that even with the inflated budget, the cost of constructing Site C would be recovered over the project’s lifespan of more than 70 years.
“B.C. needs more renewable energy to electrify our economy,” Ralston said in a written statement. “I am confident in the path forward for Site C.”
More oversight of project risks needed: Milburn report
That wasn’t the case last year, when Ralston asked for a review of the project after BC Hydro reported it had “serious concerns“ about the project due to construction delays and geotechnical challenges.
Ralston appointed former deputy finance minister Peter Milburn to review the Site C project in July 2020.
Milburn’s review found several problems with the way BC Hydro is being managed and made 17 recommendations to improve the situation.
While there was “no evidence of neglect”, Milburn’s report concluded that the system for assessing the costs and risks of Site C had not been effective, and suggested a “reset” was in order.
Green Party of B.C. Leader Sonia Furstenau has been urging the release of more information to the public and an end to the project, which involves temporarily rerouting the Peace River near Fort St. John for up to five years.
Since Monday, the Greens have gathered more than 3,000 signatures on a petition calling for the project to be shut down.
Furstenau said the public and MLAs have been in the dark about the project without an update for several months.
“We’re literally a year without any significant update on what is happening at the site; what are the costs and the fundamental question of, you know, considering the geotechnical issues that were raised, can this dam even be safely built?” she said in an interview Thursday.
Geotechnical concerns addressed
To that end, the government also released a report from two engineering experts — John France and Kaare Hoeg — to assess geotechnical concerns associated with the project, especially a “geological risk” on the right bank of the dam that would require extra foundation work.
The pair concluded that BC Hydro’s proposed solution of installing large concrete-filled pipes below the dam in order to improve stability, as well as improving drainage, would result in a project that meets the guidelines of the Canadian Dam Association.
Legal action still pending
None of this addresses the potential outcome of civil claim filed by the West Moberly First Nation against the B.C. government, BC Hydro and the Attorney General of Canada in 2018.
In it, the nation argues 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.
In particular, they say, the plan to flood approximately 5,500 hectares of the Peace River valley breaks a promise from the Crown to protect the way of life of signatory nations who occupy that territory.
At the core of the case is the argument that construction of the multi-billion dollar dam will cause irreparable harm to West Moberly territory and the way of life for people who live there — rights protected under Treaty 8.
They have previously said Site C constitutes a $1-billion treaty violation.
West Moberly chief Roland Willson said the decision to move forward was “disappointing” though “not surprising.”
But he expressed optimism the dam could still be halted in courts.
“It’s an unlawful project,” he said. “They’re violating treaty rights.”
In February 2019, the provincial Ministry of Indigenous Relations and Reconciliation entered confidential discussions with BC Hydro, West Moberly and Prophet River First Nations in an attempt to avoid litigation.
In August 2019 the West Moberly rejected offers from the province and committed to moving forward with the legal action.
Additionally, approximately 35 homeowners in the small community of Old Fort — about five kilometres east of the project site near Fort St. John, B.C. — are suing the province and BC Hydro after two landslides they claim were caused by Site C dam construction rendered their properties worthless.
Meanwhile, heavy equipment and thousands of people continue to work on the project through the COVID-19 pandemic.
That includes a massive undertaking of rerouting the Peace River as well as shipping 170-tonne turbines from Brazil more than 1,000 kilometers between Prince Rupert and Chetwynd, shutting down highways along the way.
The dam is expected to come into service in 2025.