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The Trade-Off Government Faces with Site C

There is no 'right' answer as to what government should do with respect to Site C. There will be unavoidable adverse impacts if the project is completed -- impacts that some First Nations and residents argue are unacceptable and unnecessary. At the same time it should be clear that there will likely be significant costs to ratepayers if the project is terminated at this time. BC Hydro, the agency that by far has the most expertise capable of analyzing the cost consequences, calculated that terminating Site C would be some $7.5 billion (in 2018 present value terms) more expensive for ratepayers than completing the project. BCUC, based on its own set of assumptions and calculations, concluded the difference in cost would be small, within the error of the estimates, but its actual numbers also suggest that ratepayers would likely be significantly worse off if the project is terminated at this time. After correcting for errors in its surplus sales calculations, BCUC reported th
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A report on the BCUC Site C Final Report

In its final report, the BCUC concluded that the overall costs of completing Site C would be roughly the same as terminating the project and pursuing an alternative portfolio of DSM, wind and geothermal projects as required. There would be a cost advantage to completing Site C if load grows more rapidly than the Commission assumed and a cost advantage to the alternative portfolio if Site C costs escalate higher than $10 billion. It is important to note, however, that BCUC reached this conclusion based on a manifestly unbalanced set of assumption and an incomplete assessment of costs for its alternative portfolio. As well this conclusion about overall cost does not address the marked differences in the timing of the cost and rate impacts, in particular the immediate challenge of the large rate impacts required to recover termination and sunk costs with its alternative portfolio that would not occur with the completion of Site C. Lack of balance in assumptions : BCUC concluded t
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The BCUC's Alternative to Site C

The BC Utility Commission (BCUC) released for comment what it considers to be an alternative to Site C that could meet future electricity requirements. Its alternative basically consists of a lot of wind projects, utility scale batteries and conservation measures. Based on a number of assumptions, it estimated the present value net costs that this alternative would entail (with all expenditures and export revenues discounted back to an equivalent 2018 value taking the time value of money into account). The BCUC release relates to the fourth question in the Site C terms of reference about whether there is an alternative to Site C that could provide the same benefits at equal or lower cost. There is no explicit comparison to Site C in the BCUC release, as it does not provide a comparable Site C 2018 present value cost net of export revenues. However, BCUC’s estimates would appear to suggest that contrary to BC Hydro’s calculation that an alternative portfolio of projects would be so
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The BCUC's Interim Report on Site C

The BCUC gives few clues as to what it will ultimately conclude with respect to the merits of completing, suspending or terminating Site C. It certainly did not provide any interim assessment of the key question that the BCUC was asked to address – what would be the impact of the different options on ratepayers. Nevertheless, buried in the two hundred plus page report are some very interesting issues that warrant careful consideration in the analysis and conclusions that are ultimately made. It is not clear from the Interim Report whether the failings of the previous government’s energy policy, which forced BC Hydro to buy run of river, wind and other IPP supply BC Hydro didn’t need at prices far in excess of its market value, are fully understood. The problem wasn’t just the high price for this energy; it was its low value. Run of river supply is generated disproportionately during the springtime and other water run-off periods when it is least needed to complement BC Hydro’s own
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