Newfoundland and Labrador’s dam experience a warning for B.C.’s Site C: expert

Vardy’s letter outlined the similarities between the two provinces’ megaprojects: Both are backed by powerful Crown corporations, both were exempt from the usual regulatory oversight process, at least initially, and both have experienced ballooning costs over time.

The price tag for Muskrat Falls has more than doubled from original estimates, swelling to $12.7 billion in the province of only about 525,000 people. Vardy said the project’s cost of about $24,000 per person would double the province’s per capita net debt and pose a major threat to its solvency.

Vardy encouraged British Columbia’s Utilities Commission to ensure Site C is built according to current energy needs and is made as adaptable as possible, warning that the rapid pace of technological advances could make the project obsolete before long.

He also emphasized the importance of independent public oversight and a rigorous public review process, lauding the analysis being conducted by the utilities commission.

The review began Aug. 9, with interim findings due six weeks later and a final report expected by Nov. 1.

The commission’s review process in B.C. was once standard before the previous Liberal government’s clean-energy laws permitted some projects, including Site C, to circumvent the regulatory process.

An email from B.C.’s Energy Ministry said the government would consider the results of the report, as well as environmental and First Nations considerations, before making a timely decision on the future of Site C.

Energy Minister Michelle Mungall declined further comment “out of respect for the independence of the review process.”

BC Hydro could not immediately be reached for comment.

The Independent Contractors and Businesses Association told the utilities commission in a statement released Tuesday that BC Hydro must complete Site C.

“The Site C dam has been the subject of a robust, nearly three year, independent review and its business case is solid,” president Chris Gardner said. “We cannot produce this kind of high quality, reasonably priced, clean energy anywhere.”

There are about 2,400 people working on Site C.

Gardner described Site C as an “all-important backbone” that would allow B.C. to transition to other renewable energy sources, adding that ratepayers cannot be expected to spend billions of dollars and get nothing in return.

But Vardy dismissed the logic of chasing money already spent, which he called sunk costs.

“The key consideration must be future costs,” he said.

“We may find it very difficult to walk away from an investment … but what really counts is how much money you’re going to have to spend before you get something that’s worth anything.”

— Follow @gwomand on Twitter

Geordon Omand, The Canadian Press

by Canadian Press

Newfoundland and Labrador’s dam experience a warning for B.C.’s Site C: expert

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