The $8.3-billion Site C dam is unlikely to be completed by 2024 and could end up costing 20 to 50 per cent more than has been budgeted for the project, according to a report prepared by the British Columbia Utilities Commission.
The independent body, which is responsible for making sure B.C. residents pay fair rates for energy and ICBC costs, released its review of the controversial megaproject on Wednesday.
The commission concludes suspending and restarting the project in 2024 is the least attractive option. The scenario adds at least $3.6 billion to final costs and is by far the most expensive of the three options.
It doesn’t make a recommendation on whether the province should proceed with or cancel the dam, but it says terminating the project would cost $1.8 billion while completing it could cost more than $10 billion.
The province’s NDP government asked the commission to examine the economic viability of the megaproject, which was a signature job-creation initiative of former Liberal premier Christy Clark.
The commission was asked to confirm whether BC Hydro is on target to complete Site C on budget and by 2024.
It was also asked to provide advice on three possible outcomes: proceeding with the project, suspending construction and keeping the option open to resume until 2024, or terminating the project and proceeding with other energy options.
The commission says it increasingly believes viable alternative energy sources including wind, geothermal and industrial curtailment could provide similar benefits to the Site C dam with an equal or lower cost.
The government has the final say on the fate of the project. Energy Minister Michelle Mungall said Wednesday she anticipates a decision by the end of the year.
Mungal said she and Scott Fraser, the minister of Indigenous relations and reconciliation, will meet this month with Treaty 8 First Nations that are impacted by the project and take other First Nations interests into account.
“We are going to take the time we need to make a decision on Site C that works for B.C. families, businesses and the sustainability of our environment and economy,” she said in a statement.
Mungall said the commission’s findings are based on 620 written and 304 oral submissions from individuals and organizations, as well as thousands of pages of information.
The NDP campaigned on having the project reviewed by the commission, a practice that was once standard in B.C. before the previous Liberal government’s clean-energy laws allowed some projects to bypass the regulatory agency.
The commission was required to consult with interested parties, including First Nations, and it held public hearings across the province.
The dam is two years into construction and employs more than 2,000 people in northeastern B.C.
It would be the third dam on the Peace River, flooding an 83-kilometre stretch of valley. It has faced fierce opposition from local First Nations, landowners and farmers.
BC Hydro has said $1.8 billion has already been spent on construction. Work continued while the review was underway.
Hydro’s 866-page submission to the commission says completing the dam as planned would still be best for ratepayers and terminating the project would cost $7.3 billion on a present-value basis.
The submission says demand for electricity is growing and without the dam, the province would hit an energy shortfall by 2031.
A report submitted for the commission’s review by auditing firm Deloitte LLP said the dam’s construction faces major risks including contractor performance problems, unforeseen geotechnical conditions and cost issues related to major contracts that haven’t been awarded yet.
With files from Dirk Meissner, the Canadian Press