CEAA JRP Issues Report and Recommendations on BC Mega Dam

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Yesterday, the Canadian Environmental Assessment Agency Joint Review Panel (JRP) issued its comprehensive Report on BC Hydro’s proposed 1,100 MW large hydroelectric dam, Site C Clean Energy Project.

Here is the final JRP Report summary and the Report in full (all 457 pages).

After a lengthy public hearing, the JRP examined the mega dam Project and the evidence presented by a wide range of participants. The Report addresses among other things the environmental, social and economic impacts of the dam.

The JRP’s Report and its recommendations leave more uncertainty in the British Columbia electricity sector, especially in the face of growing domestic demand and the expected development of a liquefied natural gas export industry in the province. But the Report cannot be ignored. There are some serious questions about the impacts, need and costs associated with the Site C Project.

The Panel identified 3 major hurdles that the Project must overcome if it is ever going to move ahead:

1.    First Nations: The JRP concluded that Site C would likely cause:

  • for First Nations represented by Treaty 8 Tribal Association, Saulteau First Nations, and Blueberry River First Nations,
    • “significant adverse effect on fishing opportunities practices” and that “these effects cannot be mitigated”;
    • “significant adverse effect on hunting and non-tenured trapping” and that “these effects cannot be mitigated”;
    • “significant adverse effect on other traditional uses of the land” and that “some of these effects cannot be mitigated” and
  • “significant adverse cumulative effects on current use of lands and resources for traditional purposes”.

2.    Project Costs: The JRP could not conclude “on the likely accuracy of the Project cost estimates because it does not have the information, time or resources. This affects all further calculations of unit costs, revenue requirements, and rates.” BC Hydro’s current $7.9 billion estimate for the Project is based on 2010 numbers. Four years is a long time, even more so, in the context of expected LNG major project construction at the exact same time as Site C. If the JRP does not believe BC Hydro’s own cost-estimates for Site C, then how can any conslusions be made about the Project’s cost-effectiveness versus alternatives? 

3.    Need: The JRP concluded that BC Hydro has "not fully demonstrated the need for the Site C on the timetable it proposed". Long term forecasts are very difficult, especially in the context of the evolving BC and  western states electricity marketplace. There is little doubt that electricity demand is growing in the province. The JRP Report suggests that updated forecasts for future load growth and timing thereof are needed.  Here LNG and achievement of conservation targets are the big unknowns.

The JRP Report is waiving a large yellow caution flag over Site C. There is still much consultation, pricing and regulatory work to be done, with the JRP’s recommendations presumably guiding the path forward. The biggest challenge of course is overcoming the mega Project’s mega First Nations impacts which in the opinion of the JRP “cannot be mitigated”. Given the constitutional protection of First Nations rights, this as one would expect, will be a very tall order for BC Hydro.

Provided this can be done, to move the Project forward, prudence would suggest that the province obtain an updated and accurate cost estimate for Site C which contemplates major civil project construction competition from the LNG industry. Then armed with this critical information, the province along with the entire BC energy industry (First Nations, major users & generators alike) should properly examine long term demand scenarios and the viability of cost-effective alternatives against the revised estimated costs of the Project and its significant impacts to First Nations and the environment. 

With the prospectiv e development of the LNG industry and advances in cost-effective renewable energy technology, the entire energy landscape in the province is changing. Maybe a mega dam like Site C is needed. But perhaps, it is not. The JRP Report makes it abundantly clear however: the proposed Site C Project in its current form needs further examination. 

The ultimate decision to proceed is now left with both the provincial and federal governments. A final investment decision is expected within the next six months (before November, 2014)