The by Deloitte contends that the project

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The Site C Dam is 8.8 billion-dollar mega project being built by BC Hydro on the Peace River near Fort St. John, BC.  When the NDP government was recently elected, it tasked the BC Utilities Commission (BCUC) with reviewing the project, and to providing recommendations on three possible courses of actions for the project:
1.       Continuing the project
2.       Postponing the project
3.       Terminating the project
The BCUC report covers a wide array of concerns that relate to this project.  These concerns include:
First Nations
This project will flood numerous areas which are culturally important to first nations groups.  Questions as to the adequacy of the consultation process has been raised by various parties, and have risen as far as the United Nations which has called for a halt to the project (
Schedule and Budget
Although BC Hydro maintains that the project is both on schedule and on budget, a report completed by Deloitte contends that the project will likely be over 1 billion dollars or more over budget.  Furthermore, different phases of the project are climate dependent and if a delay prevents the work from being completed as scheduled, the entire project can be pushed back by an entire year.  Thus, there are significant risks associated with the project schedule.
Cost Recovery and Economic Feasibility
This is one of the main focuses of the report, and it appears to be a topic which is difficult to nail down.  In creating forecast, BC Hydro will look at low load scenarios, high load scenarios, and then to use the midpoint between the two.  There is, however, a large degree of uncertainty in creating these forecasts because these forecasts are sensitive to economic growth, the requirements of resource-based industries (pulp and paper and mining or example), the possibilities of other large-scale projects such as LNG plants, government policies on the use of different energy resources, emerging technology, and economic booms and recessions.
Environmental Issues
Although hydroelectric dams are thought of as being “green” because they use water to generate electricity, there are arguments that dams generate large carbon footprints when constructed and are highly intrusive on the environment.
Alternative Means for Addressing Energy Needs
Questions have been raised as to whether or not the added capacity from the Site C dam is needed.  There are arguments that strategies in demand-side management, enhancements to existing generating stations, and investments in wind, solar, and thermal sources could make Site C’s capacity uncalled for.
Loss of Agricultural Land
The dam will flood thousands of acres of farm land which currently form part of the Agricultural Land Reserve—land which cannot simply be relocated elsewhere.  This prompts concern over food security.
Although jobs are created by the construction and maintenance of the dam, jobs will also be lost in the agricultural sector.
Impact on Rate Payers
The concern here has to do with how much BC Hydro’s customers will end up paying for electricity.  If indeed there is excess capacity, or if the project is not economically feasible, British Columbians will end up paying more for their power—essentially subsidizing the unused power.
The report concludes by stating that option of postponing the project is the least favourable.  It would entail retendering several contracts, and renegotiating several agreements and re-obtaining environmental permits.  Surprisingly, the report does not take a stand on whether the continuance or the termination of the project will have the highest cost to the rate payers.  It appears that the complexities of emerging technologies, government policies, and economic growth for residential and industrial customers create too much ambiguity and risk to be able to say anything definitively either way.
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Categories: Management


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