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Site C over-time, over-budget and likely costlier than alternatives: panel

B.C. Utilities Commission final report doesn't advise yes or no, but raises questions about BC Hydro's cost and demand claims.

The Site C Dam construction works are seen along the Peace River in Fort St. John, B.C., in this 2016 file photo.

Courtesy Peace Valley Hydro Partners

The Site C Dam construction works are seen along the Peace River in Fort St. John, B.C., in this 2016 file photo.

The B.C. agency tasked with reviewing the 1,100-megawatt Site C hydroelectric dam has called into question many of BC Hydro's core claims and forecasts about the project.

The dam's price tag for B.C. taxpayers will likely overshoot BC Hydro's budget by nearly $2 billion, the B.C. Utilities Commission concluded Wednesday. The B.C. NDP government said it now expects to decide the dam's fate by year's end.

"Alternative energy sources such as wind, geothermal and industrial curtailment could provide similar benefits to ratepayers as the Site C project," the commission noted in a release, "with an equal or lower Unit Energy Cost."

"An alternative portfolio of commercially feasible generating projects and demand-side management initiatives that could provide similar benefits to ratepayers as Site C," the final report noted.

That flies in the face of the Crown corporation's own figures, and argument that geothermal energy is "not viable" in B.C.; the panel's findings are similar to several economists' and auditors' reports commissioned by dam opponents in the past year.

Instead of costing $8.3 billion, as BC Hydro claimed, "The total cost at completion may be in excess of $10 billion," the panel warned, adding "there are significant risks remaining that could lead to further budget overruns."

The dam would flood nearly 10,000 hectares of land in B.C.'s Peace Valley — sparking opposition from expropriated landowners and Treaty 8 First Nations — but employs several thousand construction workers and has already been under construction for two years since the previous B.C. Liberal government approved it.

The Commission examined the "implications of continuing, suspending or terminating the project," it wrote in Wednesday's report, adding it also considered both "the loss of income to construction workers in a termination scenario or the loss of agricultural land in a continue scenario."

Proponents of the dam and the B.C. Liberals argue it is past the point of no return, with cancellation costs in the billions, and that little of the land to be flooded is currently farmed.

The Commission calculated the actual cancellation costs to be $1.8 billion, and advised against simply suspending it until a new kick at the can in 2024.

In early August, B.C.'s NDP government asked the independent agency to scrutinize the controversial project after the previous B.C. Liberal government exempted it from the review, arguing a federal-provincial joint review panel was adequate.

But the Commission stopped short of recommending a decision, which now rests with the NDP — as well as the fate of the dam's employees, landowners and Indigenous territories.

B.C.'s energy minister, Michelle Mungall, thanked BC Hydro, the utilities commission and others who took part in a "review under extremely demanding timelines."

But she wouldn't say yet what her government's decision would be, saying they expect one before the end of December.

"We are going to take the time we need to make a decision on Site C that works for B.C. families, businesses and the sustainability of our environment and economy," she said in a statement Wednesday, adding she expects to make a decision "by the end of the year."

She added: "Now it is our turn, as a government, to determine whether Site C is in the best interests of British Columbians," she said, "after considering the BCUC's findings and other issues outside the scope of this review."

Those issues could include First Nations treaty rights in the traditional territories to be flooded by the dam, for instance, and Mungall noted she and the Indigenous relations minister would meet with Treaty 8 bands as part of their process.

"This will be an extremely difficult decision," she noted. "We inherited a project that was advanced by the previous government without proper regulatory oversight, and is now more than two years into construction, employs more than 2,000 people, and on which more than $2 billion has already been spent."

According to the final report, it won't even be on time: "The Panel is not persuaded that it will remain on schedule for a November 2024 in-service date," the report stated.

But despite calling into question many of BC Hydro's figures, panelists also thanked the Crown corporation: "The Panel commends BC Hydro for its efforts in responding to the large number of questions in such a short time frame," it said in a release.

The Commission, which reviews energy projects proposed in the province, and advised against previous decades' attempts at building the Site C, was asked to assess BC Hydro's spending on Site C so far; to deem whether it can be finished by 2024 and within it's $8.3-billion budget; to calculate the cost to electricity customers of cancelling, pausing or proceding with the dam; and any energy alternatives to the dam.

The panel heard from more than 300 speakers at 11 sessions across B.C., and received more than 600 written submissions.

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