Cost of B.C.’s Site C dam jumps to $16B; project delayed until 2025

Earlier work on one of the diversion tunnels for the hydro megaproject. PHOTO: Peace River Hydro Partners

VICTORIA—British Columbia’s Site C hydroelectric dam has risen in cost by over $5 billion and been delayed by a year, bringing the price tag of the megaproject to $16 billion and stretching the completion date to 2025.

Premier John Horgan said Feb. 26 the project is halfway complete and the skyrocketing expenses and construction setbacks are due to geotechnical issues, COVID-19 and other cost and schedule pressures.

He told a news conference that the project was beset with challenges when it was started by the previous provincial government, but it must be completed for the power needs of future generations and to keep B.C.’s rates among the lowest in North America.

Horgan also said that cancelling the project now would mean laying off 4,500 workers and a sunk cost of $10 billion. The province said that the average ratepayer would face a 26 per cent increase on their bills over the next 10 years if Site C was scrapped.

“I believe we’ve made the right decision,” Horgan said. “We will not put the jobs at risk. We will not shock people’s hydro bills.”

The province said continuing with the project means the costs will be recovered through rates over the 70-year lifespan of the dam. After the project is operational, the average ratepayer will face about a three per cent increase above previous forecasts based on a $10.7-billion project cost.

It said that COVID-19 and geotechnical issues represent about half of the more than $5 billion in additional costs, but did not elaborate on the other factors or provide a detailed breakdown, citing commercial interests.

Horgan’s announcement comes weeks after a former deputy finance minister completed his report on the status of the northeastern B.C. dam and submitted the study for cabinet consideration.

The review was ordered last July after Crown-owned BC Hydro reported concerns about risks and delays, and the province says it has accepted all 17 of Peter Milburn’s recommendations, including a strengthened project assurance board.

The government also released a report by two independent experts that found changes to the foundation to address geotechnical issues on the project’s right bank will ensure Site C meets safety standards.

Horgan also announced new leadership at BC Hydro as Doug Allen — who has held top positions at the Insurance Corporation of British Columbia and TransLink. He replaces Ken Peterson as chairman of the board.

The premier said in December 2017 that the NDP government would reluctantly support completion of the dam across the Peace River just west of Fort St. John, but he would never have started the project commissioned by the previous B.C. Liberal government.

At that time, the sunk cost would have been $4 billion.

Horgan said he understands that there are a significant number of B.C. residents who have never been supportive of the project and they are not going to be any happier today than they were in 2017.

“I don’t have the luxury of fretting over the past. I have an obligation to focus on the future,” he said Friday. “I believe this is in the best interests of British Columbians.

“The costs going forward are going to be less than the costs behind us.”

Environmental and Indigenous groups opposed to the project swiftly voiced their disapproval on Friday.

B.C. Green Leader Sonia Furstenau said she was disappointed in the government’s decision, but not surprised. It is unfortunate that it didn’t cancel the project in 2017 and put resources into developing clean energy infrastructure in communities, she said.

“Instead we are now looking at this mega-dam that will cost $16 billion and potentially more,” she said. “It will be producing energy at five, six, eight times the cost that they’ll be able to sell it at. This is an astonishingly terrible business case in any circumstance.”

The Union of B.C. Indian Chiefs said in a statement that the province’s continued commitment to the project violated its promise to uphold the United Nations Declaration on the Rights of Indigenous Peoples.

“The Site C dam has never had the free, prior and informed consent of all impacted First Nations, and proceeding with the project is a clear infringement of the treaty rights of the West Moberly (First Nations),” said Kukpi7 Judy Wilson, secretary-treasurer.

The West Moberly First Nations, which holds traditional territories in the area of the dam, said the government’s decision was made without any attempt to consult First Nations, downstream residents or the general public.

“We are not at all convinced that this project is safe. The premier’s decision has grave consequences for West Moberly and other First Nations. His government had a constitutional duty to consult us. That’s the law,” said Chief Roland Willson.

Wilderness Committee campaigner Joe Foy said the “irresponsible” project has gone ahead with little regard for Indigenous rights, irreplaceable farmland, the environmental impact on the Peace River Valley, the economics of the project — or any common sense whatsoever.

“Premier Horgan should put this dam out of its misery now. It’s time to walk away from Site C.”