John Horgan's Site C problem: His government faces a difficult decision, but there is a strategy it can purse.

Author:Shaffer, Marvin

The Peace River is located in the northeast corner of British Columbia. It has long been recognized that the river has significant potential to generate electricity and, by 1980, two of three productive sites had been exploited (see map). Since July 2015, BC Hydro, the provincially owned power utility, has been constructing a dam at the third site. This third dam, the Site C project, has become a subject of intense controversy.

In the provincial election held in the spring of 2017, the then-governing Liberals defended their decision to launch the $9 billion project, while the NDP and Green Party opposed completion--the Greens more adamantly than the NDP. The election outcome was 43 Liberal MLAs and 41 NDP, with three Green MLAs holding the balance of power. The province is now governed by the NDP under Premier John Horgan with support from the Greens. One of the new government's initiatives was to order a quick review of the Site C project. The BC Utilities Commission (BCUC) was given a deadline of November 1. At the time of writing in early November, its final report has been released and the government is reviewing the findings. A decision is expected before the end of the year.

Over the past 35 years there had been two major reviews of BC Hydro's proposed Site C project. The first was in the early 1980s when the BCUC held hearings on BC Hydro's application for an Energy Project Certificate--the regulatory requirement at that time.

The second and more recent review was that of the Joint Review Panel, which held hearings and in May 2014 provided its report and recommendations to the governments of British Columbia and Canada on the social and environmental impacts of the project.

Despite the passage of time and differing focus and regulatory context of their investigations, what is most striking about these two previous reviews is the similarity of their conclusions and recommendations. Neither review rejected the project on environmental or other grounds. They both set out mitigation and compensation strategies to address land use and environmental impacts. And they both recognized that the project could provide significant benefits. The Joint Review Panel was particularly clear on the benefits:

Despite high initial costs and some uncertainty about when the power would be needed, the Project would provide a large and long-term increment of firm energy and capacity at a price that would benefit future generations... and provide a foundation for the integration of other renewable low carbon sources as the need arises. (1) Notwithstanding the benefits the project could provide, both reviews recommended further study and public hearings before authorizing the project to proceed.

In its 1983 report, the BC Utilities Commission recommended that the issuance of an Energy Project Certificate be deferred until BC Hydro could confirm the need for and cost-effectiveness of Site C. It recommended that BC Hydro improve its forecasting procedures, including the use of econometric methods and better treatment of conservation, and investigate other alternatives including planning agreements with Alberta that could increase the firm supply capability of existing resources. It also recommended that the government clarify its industrial development strategy, in particular the role that BC Hydro should play in facilitating the development of new electric-intensive industry.

In its 2014 report, the Joint Review Panel concluded that BC Hydro had not fully demonstrated the need for the project in the timetable it set forth. Like the review three decades earlier, the panel called for improvements in forecasting, further consideration of alternatives and greater clarity on the need for BC Hydro to develop resources in anticipation of major liquefied natural gas (LNG) loads. In its concluding remarks, the Joint Review Panel set out the difficult tradeoff the Site C project entailed:

Site C, after an initial burst of expenditure, would lock in low rates for many decades and would produce fewer greenhouse emissions per unit of energy than any alternative source, save nuclear. These advantages must be set against permanent damages to nature, the interests of First Nations and to the specific local interests described in this report. (2) A clear case would be required to justify Site C, and both reviews called for further investigation and follow-up hearings for that case to be made.

Unfortunately, Christy Clark's B.C. government did not heed the Joint Review Panel's advice. Despite...

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