Through 470 pages, the joint review panel report on the Site C dam proposal for the Peace River does everything short of making up its mind on the project.
It’s an exhaustive outline of all the issues that lie behind building an $8-billion dam. But the 50 recommendations handed to the federal and provincial governments are a masterpiece of qualified opinions. Taken as a whole, they don’t say yes to the project, because the experts on the panel appear skeptical to the point of suspicion about B.C. Hydro’s timetable and projections of future need. And they don’t say no, because the potential 5,000 gigawatt-hours of relatively cheap, green power a year for 100 years would be a legacy for the ages.
Anyone with a shred of optimism about B.C.’s future knows that huge amounts of new electricity are going to be needed in the next generation. The argument is over whether B.C. needs to start building it now, pursue other options, wait for new technologies or commit yet again to energy conservation.
So the panel said: “Maybe.” If more independent studies are done by the B.C. Utilities Commission, maybe the case for the dam could be firmed up.
Energy Minister Bill Bennett sounded dubious about handing over the future of the project to the BCUC for more time-consuming studies. His timetable leaves the impression the 35-year history of on-again, off-again consideration of the project is going to come to an end this year — one way or the other.
So the review panel might be the last independent look at the Site C idea. As such, it challenges a number of concepts behind the project.
Although it noted Hydro has been working on the project for 35 years and doing the estimates to international standards, it “cannot conclude on the likely accuracy of the project cost estimates because it does not have the information, time or resources.”
It also casts a dubious eye on Hydro’s financial condition, saying the deferral accounts that the auditor general raised alarm over a few years ago are “immense.”
“In effect, the province has been increasing the total of its direct and indirect debt while classifying B.C. Hydro’s portion of it as being supported by rates it did not allow B.C. Hydro to charge.” The government has started work on rectifying the financial picture — most obviously by allowing large rate increases for the next several years. But the financial health is still in the background of any decisions about Site C.
The panel said the forecasting techniques are sound, but “uncertainties necessarily proliferate in long-term forecasts. Forecasts are correct only by good fortune.”
Conventional thinking is that it’s better to guess high and have too much power, than be low and subject customers to brown-outs, emergency purchases and general calamity. Plus, if there’s a surplus it can be sold on the market.
But the panel said “times have changed” and if there’s a surplus in 2022, Hydro could be selling Site C power to utilities elsewhere “for only about one-third of their costs, leaving B.C. ratepayers to pay for the rest.”
And the power demands of the liquefied natural gas sector “are the biggest wild cards in the load forecast.”
The plants would use their own natural gas to power part of the production, but there would still be a big demand for electrical power elsewhere in the process. The panel disputes some of the calculations and notes what is becoming obvious to all: “Allowing plants to generate that much power by burning gas would make provincial (and national) greenhouse gas targets all but impossible to reach.”
The panel concluded that a few decades out, the project “could appear as a wonderful gift from the ancestors of that future society, just as B.C. consumers today thank the dam-builders of the 1960s.”
But no matter how much more analysis is racked up, pushing the go button on a massive project with an eight-year build-out will always be a gamble.
And the North American energy sector has vivid examples of long-range decisions that turned out to be catastrophically wrong.
