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TitleSite C dam review starts in one week2017-08-03 12:45
Writer Level 10
More than 2,000 workers at Site C site can keep working until at least November.

The BC Utilities Commission will begin its review of the $8.8 billion Site C dam project one week from now on August 9.

And should the commission conclude that the project is uneconomic, the B.C. government has three options: proceed anyway, cancel it outright or mothball it.

Michelle Mungall, B.C.’s new minister of Energy, Mines and Petroleum, explained on August 2 how the review will play out.

The BCUC will have until September 20 to issue a preliminary report, and a final report by Nov. 1.

If that sounds rushed, it is. As a comparison, yesterday’s announced acquisition of the Waneta dam from Teck Resources (TSX:TECK.B) will be referred to the BCUC, which is expected to spend a year reviewing the proposed acquisition.

But as Mungall pointed out, the mandate being given to the BCUC on Site C is quite narrow. The commission will not be asked to replicate the work done already by a joint review panel.

It will be asked to look strictly at the project’s economic viability and its impact on B.C. ratepayers.

“We are asking BCUC to immediately assess the economic viability and consequences to British Columbians of the Site C project in the context of current supply and demand conditions prevailing in the B.C. market,” Mungall said.

“Specifically, BCUC has been asked to confirm whether or not BC Hydro is on target to complete Site C on budget and by 2024, and provide advise on implications for ratepayers associated with proceeding with the project, suspending the project – while maintaining the option to resume construction until 2024 – and terminating the project.”

That mandate seems to almost certainly doom the dam project for cancellation. The demand for power in B.C. has been flat in recent years. BC Hydro has admitted the new dam will produce energy surplus to B.C.’s needs when it was to begin producing power in 2024.

The dam was justified by BC Hydro and the previous Liberal government as needed to meet B.C.’s future demand, not its current demand. While it was reviewed by a joint review panel, the BC Liberal government specifically excluded the project from a BCUC review.

For ratepayers, the most important question to be answered by the BCUC may be whether the BCUC thinks the project, now 20% complete, can be completed within its $8.8 billion budget, and what impact that would have on power prices.

The Muskrat Falls hydro-electric project in Labrador was estimated to cost $4 billion to build when sanctioned in 2012, and – at three-quarters completion – is now expected to come in at more than $11 billion.

Mungall said the BCUC will provide forums for public engagement, though it may not include formal public hearings. Ultimately, it’s up to the BCUC to decide how it will receive input from interested stakeholders and the general public.

Mungall said workshops will be held and written submissions will be taken.

“They’re not looking to do the traditional BCUC process of public hearings, where it’s a very much a court oriented process,” Mungall said.

In other words, it appears there will be no opportunity for cross-examination of evidence given during the review.

Homeowners in the Peace Valley where the dam is being built and who were facing immediate expropriation and eviction will get a temporary reprieve until the review process is concluded, Mungall said.

Delaying those expropriations would have added $600 million to the project, due to the delays it would cause, BC Hydro and the Liberal government had said.

Mungall said the new government believes that is not the case and that the expropriations can be delayed without incurring a $600 million increase to the budget.

Asked what the point is of allowing construction to continue for the next three months, when the project may be cancelled or mothballed, Mungall said: “Currently there’s 2,200 people on site working and to immediately stop the project would have impacts on them.

“But we also don’t want to preempt the answer that the BC Utilities Commission is going to be putting forward. They may be telling us to move ahead with Site C, they may be telling us to stop Site C. We don’t want to preempt any potential decision going forward.”