BC Hydro says utilities watchdog underestimated benefits of Site C
The BC Hydro building at 333 Dunsmuir, Vancouver.
VICTORIA – B.C. Hydro says a recent report into the Site C dam project by the B.C. Utilities Commission underestimated the project’s benefits by $800 million.
In a letter to the commission released Thursday, Hydro argued the independent regulator made mistakes in calculating two models that compared Site C to a portfolio of alternative energy options.
“B.C. Hydro performed a preliminary analysis of these two models and has identified what appear to be calculation and input errors,” Hydro wrote in the letter.
“The cumulative effect of these errors is to understate the benefits of completing Site C as compared to the commission’s Illustrative Alternative Portfolio by approximately $800 million. Given the materiality of the issues identified in this letter to the commission’s final report, we believe that it is important to bring these issues to the commission’s attention.”
Hydro’s six-page letter detailed what it argued was an incorrect discount rate on Site C’s surplus, inconsistent inflation rates, inaccurate treatment of the project’s sunk costs and double-counting transmission loss savings on its demand-side management calculations, among other technical issues.
One of the errors has already been admitted by the BCUC, which wrote in a letter last week it had incorrectly calculated $336 million in discount rates for Site C’s surplus.
The BCUC report said that the alternative energy sources like wind and geothermal, combined with an aggressive plan to reduce residential and industrial power consumption, could provide similar energy for “equal or lower unite energy cost” than the $8.3-billion dam project.
However, Hydro’s argument, as well as the BCUC’s error, could tilt the financial advantage back to Site C.
Two government ministers also raised concerns and questions about the BCUC’s calculations in a letter sent last week. The BCUC has yet to respond.
The BCUC report on Site C, completed within 12 weeks at the government’s request, concluded the project was not on time or on budget. The final decision on whether to cancel the mega-project will be made by the NDP cabinet by the end of the year.
Also Thursday, Premier John Horgan’s office announced six outside energy consultants have been chosen to present information to cabinet, in advance of a decision about the dam. The list includes: David Austin, of the Clean Energy Association of B.C.; David Craig, of Consolidated Management Consultants; Colleen Giroux-Schmidt, of Innergex Renewable Energy; Mark Jaccard, Simon Fraser University; Robert McCullough, a researcher who has produced reports for the Peace Valley Landowner Association; and Karen Tam Wu, of the Pembina Institute.
The six consultants will present to cabinet as a group on Nov. 30.
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