Premier John Horgan has announced the final decision regarding the future of BC Hydro’s Site C project.
And the decision is, the project will move forward despite facing some unforeseen additional costs.
In 2014, the clean energy site was approved with an $8.775 billion budget but it was announced today (Friday) that the project is expected to cost $16 billion.
Additionally, there is a one-year delay, and is now scheduled to be completed in 2025.
The cost increase of nearly double the initial budget is being attributed to the pandemic and unforeseeable geotechnical challenges, project costs, and schedule pressure.
“ÍžThe project is facing new challenges, and we are committed to managing it in the best interests of British Columbians,” explained Horgan,” cancelling it would cause peopleÍ›s electricity rates to skyrocket.”
The project, near Fort St.John, is about 50% complete and according to the province, cancelling it would also burden residents with unnecessary additional financial stress.
Cancelling the project would cost at least $10 billion, which doesn’t include the costs of replacing the lost energy and capacity Site C would have provided.
If ratepayers were to pay off this debt over 10 years, an immediate increase of 26%, or about an extra $216 per year for the average residential customer, would be in place for the next decade.
Debt associated with the termination of employees and remediation would fall on taxpayers as well, which according to the government, would impact the province’s ability to regain economic stability in the coming years.
In light of the pandemic-related challenges, BC Hydro has accepted a number of recommendations for the project under the “Milburn Review”.
The 17 recommendations made by Peter Milburn, who was retained to provide oversite on Site C, are aimed at improving oversight and governance.
The geotechnical review was also released, which confirmed the foundation enhancements developed to address geotechnical issues on the project͛s right bank will work.
Site C will not impact BC Hydro rates until it comes into service, with costs being paid repaid over the next 70+ years.
Continuing with Site C at the current cost estimate means cumulative bill increases will be about $36 a year higher for the average residential customer.
According to the province, this is about 3% higher by 2030 than under BC Hydro͛s prior rates forecast, and still less than inflation over this period.