In its final report on Site C, the BC Utilities Commission (BCUC) says it is not convinced the project can meet its in-service date of November 2024.
The Site C dam is likely to cost $10 billion, not $8.3 billion.
It's also recommending that the “least attractive” of three possible scenarios would be to halt the project and resume construction at a later date. That would add another $3.6 billion to the project's cost. The other two options are completion and cancellation.
Cancelling the project will add another $1.8 billion in remediation costs to the $2.1 billion that will have been spent by the end of this year. In other words, the cost of terminating the project will leave BC Hydro with $3.9 billion in sunk costs.
The commission suggests the dam is not needed, stating that BC Hydro’s load forecasts are “excessively optimistic.”
Most damning of all, the BCUC finds that “increasingly viable alternative energy sources such as wind, geothermal and industrial curtailment could provide similar benefits to ratepayers as the Site C project, with an equal or lower unit energy cost.”
BC Hydro and a number of energy experts who have supported the project have insisted that large hydro-electric power would be the best option in terms of costs, compared with other energy sources, like wind power, so the BCUC’s opinion is a damning one.
"I don't see how the project could proceed, given the findings of the BCUC," said David Austin, a lawyer for Clark Wilson LLP who represented Clean Energy BC during BCUC hearings.
But there are more than just costs in terms of dollars and cents for Premier John Horgan to consider. There are political costs, as well.
Horgan will be under intense pressure by the Green Party to cancel the project. There are also pressures from two First Nations in the region to cancel it as well.
But more than 2,000 workers are employed on the project. Handing them pink slips around Christmas time, and explaining to taxpayers how they will have to absorb a $3.9 billion writeoff for a project that won't produce a single electron of electricity, puts Horgan in "a no-win place," says Sauder School of Business professor Werner Antweiler.
"To me, it's a lot of taxpayers' money squandered, and so I think at the end of the day cancellation is not going to save us that much money," he said. "The right decision would have been made before this project got started, looking at the alternatives. Now that we are down the road, they have created this train that's virtually impossible to stop without actually wasting a lot of money and squandering it."
The NDP government has stated it will make a final decision on the fate of the project by the end of this year.
"This will be an extremely difficult decision," Michelle Mungall, B.C. minister of energy, mines and petroleum Resources, said in a press release.
Nelson Bennett/Business in Vancouver