Site C Dam Late for Key Milestones, Report Reveals

B.C. Premier Christy Clark made headlines last month when she claimed that even a few months delay in evicting two Peace River valley families from their homes could add $600 million to the cost of the Site C dam project.

When premier-designate John Horgan asked BC Hydro to hold off forcing families from their homes this week, Clark wrote to Horgan that “with a project of this size and scale, keeping to a tight schedule is critical to delivering a completed project on time and on budget.”

But now BC Hydro’s latest Site C report reveals that — well before May’s provincial election and Clark’s headline-grabbing claims — the hydro project was already late meeting three out of eight “key milestones” for 2017 and was at risk of being late for three more.

It begs the question — was Clark trying to deflect blame for Site C construction delays and potential cost overruns onto the soon-to-be NDP government?

Tucked away on page 30 of BC Hydro’s most recent quarterly Site C report to the BC Utilities Commission is a chart of “key milestones.” It provides a glimpse at some of the behind-the-scenes challenges of keeping the $8.8 billion project on schedule and on budget.

The report lists some reasons for Site C’s late and “at risk” milestones. Among them are a 400-metre long tension crack on an unstable Peace River embankment and delays — prior to March 31 — in awarding contracts.

One key milestone, a new civil contract award for the dam’s generating station and spillways, was five months behind schedule by March 31. A milestone to complete a road on the north bank, where the tension crack appeared in February, was 13 months behind by the end of March.

And a contract to relocate a section of provincial highway away from the Site C flood zone — the reason Clark gave for the pressing need to evict farmers Ken and Arlene Boon from their home as scheduled on July 15 — was one month behind and deemed to be “at risk” before the election campaign kicked off in April.

The report notes that the delay, even as of March 31, “may impact the overall work schedule” for highway relocation at Cache Creek, where the Boons live.

It also states that “plans are in place to address potential delays” in constructing Peace River diversion tunnels — the river must be diverted to allow construction of the dam structure — as a result of the tension crack.

Yet Clark made no mention of these potential delays when she told Horgan that allowing the farmers to stay in their homes for a few more months could prevent river diversion from occurring as planned in September 2019.

In Clark’s words, “Preliminary work undertaken on this issue by BC Hydro indicates that should river diversion not be completed as scheduled, a year-long delay would occur....” That one-year delay, Clark wrote, was expected to cost BC Hydro customers $600 million.

The eviction threat

The Boon’s third-generation farmhouse, in an area of the valley known as Bear Flat, was expropriated by the B.C. government in December so a highway affected by the dam could be moved. Local First Nations say the new route will desecrate an Indigenous burial site that may contain the bodies of people who succumbed to the 1919 flu pandemic while at a traditional winter encampment at Bear Flat.

The First Nations, along with the Peace Valley Landowner Association, representing 70 people whose properties would be impacted by Site C, have requested an alternate route for the highway, one already shortlisted by BC Hydro. They have also repeatedly asked for details about the comparative costs of the routes, which have not been released by the Transportation Ministry or BC Hydro.

The Boons were given permission to remain in their home until May 30, after the provincial election. That deadline was subsequently moved to June 30 and then to July 15 and now to July 23, leaving the Boons and their neighbours on tenterhooks as they wait to hear if they can stay in their farmhouses, which are now legally owned by BC Hydro.

Meanwhile, Site C’s main civil works contractor — a partnership that includes the Alberta corporation Petrowest, Korea’s Samsung C&T and a Canadian subsidiary of the Spanish conglomerate Acciona — has “experienced delays on several of their critical path activities, requiring a re-sequencing of planned work,” according to the BC Hydro filing.

BC Hydro declined to answer questions about the report, which states that Site C remains on budget and on track to be completed in November 2024 despite the late and at-risk milestones.

“Any cost impacts to BC Hydro associated with rescheduling activities can be managed from existing allocated contingency budgets,” says the report.

The report also notes that the Site C project had spent $482 million more by March 31 than was anticipated when the project gained final B.C. government approval in late 2014.

But adjustments made to Site C’s most recent service plan — a three-year spending plan — show that the project’s financial reports show it spent $93 million less than anticipated by that date.

The savings, according to BC Hydro, are related to a “shift in expenditures” into other reporting periods. Details were provided confidentially to the BCUC but have been withheld from the public.

“Many questions remain surrounding the cost of Site C,” Green Party leader Andrew Weaver told DeSmog Canada.

“It is egregious that the most expensive taxpayer-funded project in B.C.'s history has not undergone review by BCUC to determine whether this project is in the interests of British Columbians,” Weaver said in an emailed statement.

The NDP and Greens have said they will send Site C for BCUC review as soon as the new government is in place.

Big problems for similar projects

Adjustments to Site C’s spending timeframe come as the people in charge of building the other two large dams under construction in Canada — the Keeyask dam on Manitoba’s Nelson River and the Muskrat Falls dam on Labrador’s Churchill River — disclose that both projects are significantly over budget.

The bill for the Muskrat Falls dam — called a “boondoggle” by the CEO in charge of building it — jumped by another $1 billion last month and is now pegged at $12.7 billion. The dam will produce roughly three-quarters of Site C’s energy.

The price tag for the Keeyask dam — which will produce 695 megawatts of power compared to Site C’s projected 1,100 megawatts — jumped by $2 billion this year, to $8.7 million.

Muskrat Falls’s cost is expected to add an extra $150 onto the monthly hydro bill of every household in Newfoundland and Labrador. Rate increases for Manitobans as a result of the Keeyask dam’s escalating price tag have not yet been determined, although news reports say they will be in the double digits.

Former BC Hydro CEO Marc Eliesen has called Site C a “big white elephant” that will lead to significant hydro rate increases.

BC Hydro’s report also notes that three Site C “material risks” have increased this year — construction execution, geotechnical risks and environmental non-compliance.

“Unknown or changes to geotechnical ground conditions is a risk impacting the schedule and cost,” states the report.

The “First Nations” material risk to Site C decreased this year, as a result of Site C impact agreements with the Doig River First Nations and the Halfway River First Nation, according to the report.

The risk of interest rate variability also decreased, and the $1.4 billion in interest that will be accrued during Site C’s construction period remains unchanged. The report notes that “identified risks are being managed and treatments are in place or planned.”