Site C budget, schedule facing 'serious concerns' due to COVID-19, BC Hydro reports

BC Hydro reported Friday it has "serious concerns" about the Site C dam project due to the impact of COVID-19 and other challenges.

In a letter opening a quarterly report to the BC Utilities Commission, BC Hydro President and CEO Chris O'Riley said because of the pandemic, work has been reduced and other issues have led to concerns regarding schedule, scope and budget of the project.

On March 18, BC Hydro announced it was cutting some work on the project in response to provincial measures to manage COVID-19 transmission.

The workforce staying at the dam site in northern B.C. has been scaled back by about 50 per cent to work related only to essential services like safety and security, and river diversion, O'Riley said.

Work continued in off-site areas, including highway re-alignment and reservoir cleaning, where physical distancing is easier to maintain.

On May 14, BC Hydro announced it would begin "safely" and gradually increasing construction at the dam site. 

Prior to the pandemic, O'Riley said the $10-billion project remained on schedule for the first generating unit to begin service in late 2023 with a final in-service date of 2024.

That date is now up in the air, he said, because work had to be halted during the beginning of the pandemic.

BC Hydro reviewing cost, timelines

In the letter, O'Riley said the project was already managing "significant financial pressures" from contract modification, construction work, labour requirements, First Nation treaty infringement claims and an injunction application.

In December 2019, a "project risk" emerged on the right bank of the dam site requiring extra foundation work. 

On Friday, O'Riley reported those foundation enhancement costs are anticipated to be "more substantial than initially expected."

Concerns about the progress of Site C were echoed by the minister responsible for the project.

"I am very concerned by these reports," Energy Minister Bruce Ralston said.

"Particularly as they relate to cost and schedule uncertainties."

Ralston said he is appointing former deputy finance minister Peter Milburn to act as a special advisor on the project.

BC Hydro is reviewing the cost and timelines of the project and says it will provide an update in the fall.

Cancellation may not be 'realistic'

Milburn, a former B.C. government bureaucrat with a background in civil engineering, will also provide an assessment of Site C to the province by the fall, Ralston said.

"He will bring a fresh set of eyes and an independent perspective, which I look forward to receiving and see where that takes us," Ralston said.

He doesn't expect Milburn to recommend halting the project.

"I'm not sure that that's a realistic alternative," Ralston said.

The project has been at the centre of a polarized debate between politicians, environmentalists, First Nations, labour groups and landowners in the Peace River Valley for decades.

Ralston said the former B.C. Liberal government led by Christy Clark approved Site C in 2014, embarking on a construction schedule to bring the dam to "the point of no return."

In December 2017, Premier John Horgan announced his government would support completion of the project. He said the New Democrats would never have started Site C and the decision to carry on caused intense debate within his cabinet and caucus.

He said the government estimated terminating Site C would cost $4 billion.

Liberals, Greens respond

The BC Liberals said Horgan's government inherited the Site C project "on time and budget" and and blame the NDP for overruns and delays.

In a statement, the Liberals' critic for BC Hydro, Greg Kyllo, said by insisting on a "highly-politicized" review of the project in 2017, the government missed deadlines and drove up the price tag.

"Now the people of this province are stuck paying for yet another review because the NDP simply have no idea how to manage the most important clean energy project in B.C," Kyllo said.

Interim Green Party Leader Adam Olsen said the government should not be writing the project a "blank cheque" and should give serious consideration to cancelling it.

"I'm concerned that the government is saying Site C is past the point of no return, while admitting that they don't know the current state of the project," Olsen said.

"This leaves B.C. ratepayers at significant risk."