There is not and never was a business case for Site C, says the former president and CEO of BC Hydro.
At the top of a 22-page submission to the BC Utilities Commission (BCUC) this week, Marc Eliesen charges the former provincial government and BC Hydro's board of directors with making a "reckless and irresponsible" final investment decision on the project in late 2014.
He also notes that the “systemic bias” in BC Hydro’s electricity forecasting has “consistently overestimated” electricity demand, meaning British Columbian ratepayers “do not need and cannot afford” the pending project’s additional capacity.
“It is one thing to over-exaggerate demand projections and quite another to actively engage in subsidizing industry to generate increased electrical need. There never was a realistic need for Site C. The former government engaged in a series of exercises in an attempt to justify it,” writes Eliesen, who has spent more than 40 years in the Canadian utilities sector, in roles that include chair and CEO of both Ontario Hydro and the Manitoba Energy Authority, chair of Manitoba Hydro, and Ontario’s deputy minister of energy
Based on that experience, Eliesen's submission to the BCUC's inquiry states that hydro infrastructure projects experience “staggering construction overruns” and delays, and that there is a “high probability” the costs of Site C stand to increase by 30 per cent, to $12 billion from a budgeted $9 billion.
In addition to exaggerated demand and potential cost overruns, Eliesen's submission warns that BC Hydro is facing a financial “unmitigated disaster.” As a result, he says ratepayers can expect price hikes if Site C moves forward, and as the crown corporation faces a ballooning debt burden, $5.9 billion in deferral accounts and $56.3 billion in power purchase obligations.
“The notion that Site C will be completed on time and on budget is illusionary,” he wrote. “The [B.C.] economy does not need the negative macroeconomic consequences of higher electricity rates. It is time to stop the losses from this ill-conceived [p]roject.”
Earlier this month, the BC NDP followed through on its election campaign promise to put the BC Hydro Site C Clean Energy Project to review. It asked the BCUC to consider the impact of three options: completing the project by 2024, suspending the project and terminating construction.
Construction on Site C began in the summer of 2015 and continues as the BCUC reviews the project.
An interim report from the BCUC is expected September 20. A full report is anticipated by November 1, 12 weeks after the inquiry was launched.
Third-party submissions to the inquiry are available here.
