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Q&A: Energy and Mines Minister Michelle Mungall on Site C review

An $8.8-billion decision certainly generates much speculation among the public, but new Energy and Mines Minister Michelle Mungall is steering clear as her government readies to send the Site C dam for an economic review.
Michelle Mungall, left, is officially sworn in by B.C. lieutenant governor Judith Guichon on July 18.

An $8.8-billion decision certainly generates much speculation among the public, but new Energy and Mines Minister Michelle Mungall is steering clear as her government readies to send the Site C dam for an economic review.

Mungall says the dam, now two years into construction, will be sent to the BC Utilities Commission Aug. 9, part of a 12-week review into its economic viability and impact on ratepayers. The move fulfills one of the New Democrat government's most prominent campaign promises, having argued the dam is too expensive and unnecessary. A final report from the BCUC is due Nov. 1.

Alaska Highway News spoke briefly with Mungall and Assistant Deputy Minister Les MacLaren following the announcement on the details of the review, concerns about the project's financial transparency, BC Hydro's agreements with local governments in the Northeast regarding the dam, and when she plans to visit the area.

Mungall deferred questions on broader provincial energy policies to a later date, including questions about independent power producers, the province's energy entitlements under the Columbia River Treaty, Burrard Thermal, and eliminating PST from commercial power sales.

The interview has been edited for length and clarity.

Alaska Highway News: The review has been ordered, it starts Aug. 9, and a final report is due in your hands by Nov. 1. How long after that deadline will the government announce its decision?

Michelle Mungall: I don't have that date for you because I don't want to speculate on what's going to be happening following that. I will tell you, though, that we appreciate that this impacts a lot of lives and we want to move expeditiously on it.

AHN: There has been much concern over the financial transparency of the project. For instance, BC Hydro's current progress reports to the BCUC redacts information on contracts awarded worth than $10 million, it redacts detailed expenditures to date. Reporters have struggled with freedom of information requests on the project's actual costs to date and costs overruns. What is your government's plan to address this, and will it make the whole financial picture of the project publicly available as part of this review process?

MM: That's exactly one of the things we're asking the BC Utilities Commission to do, to determine whether BC Hydro truly is on time and on budget.

AHN: Do you have any doubts or skepticism about whether the project is on time and on budget?

MM: It would be inappropriate for me to speculate one way or another. I want the BCUC to be able to do its job without that kind of speculation. 

AHN: BC Hydro has millions of dollars tied up in and committed to in agreements with local governments over the project. In Fort St. John, construction is starting on a BC Housing project tied to the dam. Regardless of the decision that is made, will the government honour those agreements?

MM: I don't want to speculate on that at this time, there's a lot to be considered. Once the BC Utilities Commision provides its advice to government, specifically cabinet, we're going to be looking at those very issues that you spoke of, as well as a whole host of other issues that include environmental considerations, First Nations considerations, social and economic, some of things you listed there. We're going to be looking at all of that and making our decision accordingly. 

AHN: Have you had a chance to come up to the area, visit the work site and the region as a whole? And if not, when do you plan to make a visit?

MM: In the last two weeks, I have not had the chance to do that yet, but that's not to say I'm not very familiar with the Peace Country. I spent most of my summers up in the Peace Country, mostly on the Alberta side, with relatives as a child. So I'm familiar with the area, and I'm very much looking forward to a visit later this month. 

AHN: The previous government allowed mining companies to defer Hydro payments, and proposed to eliminate PST from electricity sales for businesses. What are your opinions on those policies? Will they be continued, or be pursued?

MM: I'm going to have to get back to you on that one, because today I'm speaking about Site C.

AHN: For sure. I'm trying to fit in larger energy policy questions in here.

MM: We're going to have tons of opportunities to talk about those as we go along. So don't feel like you need to get it all in today. 

AHN: It's the opportunity. Are you able to speak about independent power purchase agreements, the Canadian Entitlement under the Columbia River Treaty, Burrard Thermal?

MM: Not today. Let me tell you that my perspective is that I'm always open to speaking with media about issues that are especially relevant of the day and relevant to their communities. We'll get a chance to talk about those in the future for sure.

AHN: There have been recent changes to the BC Hydro board. Have there been any changes at the utilities commission?

MM: No, there's no changes to the BC Utilities Commission. 

AHN: Are you content with the existing membership of the BC Hydro board? Do you think removing two members, Mr. Bennett and Mr. Weisgerber, will change the direction of the board? Certainly the hydro file has been advanced quite considerably over the last weeks under your new government.

MM: Again, I was hoping to focus on Site C. But no doubt about it, I have full confidence in Ken Peterson's ability to chair the board of BC Hydro. Look at his background. He has an exceptional resume coming into this position, and I think we're very fortunate as British Columbians to have him at the helm of BC Hydro. 

AHN: I don't know how familiar you are with the Site C project and some of the geotechnical challenges that have been encountered at the construction site. There have been cost increases in that regard. Do you think these challenges will significantly impact the costs moving forward?

Les MacLaren: Each of the contract packages has a budget, and they also have an amount of contingency associated with it. There's somewhere around $800 million of contingency on this project. That's what the contingency is for, for the unexpected. The fragility of the geotechnical conditions was known. No one expected a 400-metre tension crack to open up on the north bank. But they've engineered a solution, they're working with the contractor, and it's material they were ultimately going to have to remove from the bank to stabilize it anyway. It's just that they've had to do some extra work in order to get at that material.

AHN: You've mentioned no major contracts will be awarded during this review process. The families in the way of Highway 29 realignment work, the Boon family in particular, won't be evicted. Can you clarify the status of the contracts for the highway realignment?

LM: The tender was out and is closing in the next day or two, for the road realignment. The bridge contract has not been put out to tender. Both will be cancelled at this point, pending completion of the review. 

AHN: Anything else you want to say about this review?

MM: What I really hope your readers understand is that this government cares about their communities, their government cares about what's going on in the northeast of B.C. and around Site C, and that our decision will absolutely take their views into consideration. It's my understanding the BCUC is going to be engaging people in the community in Fort St. John as well, to ensure people do have the opportunity to voice their concerns one way or another.