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FORT ST. JOHN, B.C. – Energy Minister Bill Bennett says that large differences between BC Hydro’s Site C Clean Energy Project and Nalcor’s Muskrat Falls Generating Facilty mean that the third dam on the Peace River won’t likely end up like its eastern counterpart.
On Friday, the CEO of the Newfoundland and Labrador Crown Corporation Stan Marshall told the Canadian Press that the dam, which is under construction on the Churchill River, will now cost taxpayers $11.4 billion, roughly $4 billion more than originally budgeted back in 2012, when the dam was given the go-ahead. Marshall now also says the dam will first generate electricity in the fall of 2019, instead of in 2017 as originally planned.
Speaking at a news conference on Friday, Marshall said: “In my opinion the Muskrat Falls project was not the right choice,”adding that original cost estimates were optimistic or overly aggressive. Marshall says electricity rates for domestic customers are now expected to rise to 21.4 cents per kilowatt hour in 2021, before tax, 6.3 cents higher than forecast when the project was sanctioned in 2012.
Speaking with Energeticcity.ca this afternoon, Bennett said that the Site C Dam differs from Muskrat Falls in that the planning and budgeting for the dam was subject to a rigorous seven-year process. Bennett said that in addition to planning that included an independent panel of experienced contractors, and having the project’s budget audited by KPMG twice, that BC Hydro has built a strong inflation budget into the project. Along with those, Bennett mentioned the $440 million contingency figure that the province included in the final figure. According to Bennett, approximately $4 billion of the dam’s $8.335 billion final budget has already been committed.
“Newfoundland is in a bit of a pickle right now because they were kind of a one-trick pony. They depended almost entirely on offshore oil and gas. That’s gone away for them right now so at whatever cost that dam is going to have, they don’t need the electricity,” said Bennett. He says that in contrast, BC has lead the country in economic growth for the past two years, and is forecast to continue to lead the country in growth, jobs creation, and migration. According to Bennett, those factors mean that the province has no doubt about the need for the Site C dam’s electricity by the time it is complete in 2024.
In response to statements made by NDP Hydro Critic Adrian Dix in an interview with the Vancouver Sun’s Vaughan Palmer that the provincial government is signing taxpayers up for “a 70-year contract for a flip phone” by using outdated hydropower technology, Bennett responded by mentioning a report by the Canada West Foundation. The report which was published by the think-tank on Monday looks at solutions to the problem of Alberta and Manitoba seeking to eliminate coal-powered electricity generation in the coming years. Bennett says that although hydroelectric projects have high up-front capital costs, the dams themselves quickly get paid off and continue to generate low-cost electricity for up to one hundred years. Bennett added that large-scale hydroelectric power generation is the reason for BC, Manitoba, and Quebec having the lowest residential electricity rates in North America.
With files from the Vancouver Sun and the Canadian Press
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