BC Hydro has, in a Trumpian gesture, brushed off the last independent oversight of the out-of-control Site C project, with the apparent support of the newly-elected NDP government.
The BC Utilities Commission is supposed to make sure BC Hydro is acting responsibly in the interests of its customers. It’s the only check on the monopoly $6-billion Crown corporation.
But BC Hydro just gave the finger to the regulator, and to British Columbians. And Premier John Horgan seems to be fine with that.
The utilities commission is mandated to ensure BC Hydro makes good decisions in the public interest. It scrutinizes the corporation’s budgets, plans and projections. It approves — or rejects — rate increases, and reports on whether projects like Site C are needed and based on a sound business case.
In doing that, it relies on BC Hydro to accept the oversight and provide needed information.
And BC Hydro has simply dismissed its obligation to accept independent oversight.
On July 31, BC Hydro filed updates on Site C with the utilities commission.
They were alarming. BC Hydro revealed there was “uncertainty with the dam’s schedule and in-service date” and “significant financial pressures.” So significant the corporation said it was coming up with a new budget and schedule for the megaproject.
And BC Hydro said that in late December a “project risk” had “materialized.”
The dam’s main structures — spillways and the giant power generating hall — are being built on unstable ground. The corporation is trying to figure out a solution and it has no idea how much this will cost.
“By the end of the March 31 reporting period, we had learned more about these geological challenges,” the update said. “Based on further engineering analysis of the proposed mitigation measures, the foundation enhancement costs are anticipated to be more substantial than initially expected in January.”
But Sarah Cox reported in the Narwhal — after a fight to get documents under freedom of information law — that geological risks to the project had been confirmed in May 2019. And that BC Hydro managers and the government-appointed project assurance board — including Energy Ministry assistant deputy minister Les MacLaren and deputy finance minister Lori Wanamaker — had received the information.
Which makes it seem unlikely that Horgan was shocked to learn, more than a year later, about the risks.
The utilities commission was not happy with BC Hydro’s update. On Oct. 23, it responded with 13 pages of questions about what BC Hydro knew about the problems, why the corporation hadn’t seen the risks, how it was responding and what the consequences could be.
And it appeared skeptical about the claim the geological risks has suddenly “materialized.”
“Please explain when the geotechnical risks were first identified during the project and what specific risk management and mitigation practices were put into effect,” the commission asked.
All-important concerns for the regulator charged with protecting the interests of BC Hydro’s customers and taxpayers from bad decisions. Given the seriousness of the crisis, the commission asked for answers by Nov. 19.
“BC Hydro believes that it should refrain from providing responses until after the independent review has been completed and after the government has received the consultant’s final report of findings and recommendations,” the corporation said.
Who cares what BC Hydro “believes”?
The law is clear.
The Utilities Commission Act says BC Hydro “must, for the purposes of this act, answer specifically all questions of the commission, and provide to the commission the information the commission requires.”
It doesn’t say if Hydro feels like it, or unless it decides a government-appointed review takes priority. (In fact, Milburn’s review should make it easy to provide the utilities commission with answers; surely he has asked the same questions.)
The government’s failure to insist BC Hydro accept the commission’s legislated oversight role should be surprising. In 2010, when the BC Liberals passed legislation removing Site C and other projects from commission review, Horgan denounced the move as “outrageous.”
Yet now his government is standing by as BC Hydro denies its legal accountability to the BCUC.
At the same time, BC Hydro continues to go flat out with construction despite what should be uncertainty about the project’s future. Almost 5,000 people were working on Site C in September. BC Hydro apparently is continuing former BC Liberal premier Christy Clark’s plan to push the project past the point of no return.
Why not just wait for Milburn’s report, expected to be submitted to government by year end?
First, because there is no guarantee the public will see it until long after that date. (The government kept the results of an independent review of WorkSafe BC secret for 10 months.)
Second, because Milburn — well-respected, an engineer and former Finance Ministry manager — is not an independent reviewer. He was picked by cabinet, which also made the decision to continue Site C construction in 2017.
And third, because the law says the BC Utilities Commission — truly independent — is responsible for protecting the public from bad BC Hydro and government decisions. (Especially when the BC Liberals and NDP have reasons to hide bad news given their past decisions.)
Back in 2010, when Horgan was demanding the BCUC provide oversight, Site C was budgeted at $7.9 billion. In 2017, when the NDP decided to go ahead, the budget was $10.7 billion.
Now the final cost could be billions of dollars higher. No one knows how many billions.
This isn’t the time to cut the only independent watchdog out of the process.