Duke Point's demise puts Site C back in picture

Brian Lewis, The Province, 26 June 2005
canada.com, 27 June 2005
Paul Willcocks, Prince George Citizen, 28 June 2005
Globe and Mail, 28 June 2005

Brian Lewis
The Province
26-Jun-2005

What the heck is going on at B.C. Hydro? Part of its mandate is to ensure that B.C. has a reliable supply of electricity at the lowest-possible cost.

Until a few years ago, all of our demand was met by domestically-produced power from our vast hydro-electric resources. We even had surpluses to sell to the electricity-hungry U.S.

But now, an increasing share of B.C. electricity demand is being met by higher-cost, market-priced imported power. And, frankly, this scenario will worsen before it gets better because there appear to be some serious short-circuits in the way Hydro operates.

Its recent decision to cancel the $285-million Duke Point power plant on Vancouver Island -- after spending about $120 million on it -- is the latest example.

The Duke Point folly began with an even larger project that included a Washington State-to-Vancouver Island natural-gas pipeline to feed its generators. The Georgia Strait pipeline caused such a public backlash that it was shelved earlier.

But Duke Point itself was being pushed even though it would only serve for a few years to meet Island demand until a new transmission line could be built from the Mainland. Other cheaper alternatives, on which Hydro must now rely, were dismissed by the utility.

Finally, it took the B.C. Court of Appeal to bring some sense to this issue. It recently gave opponents of Duke Point leave to appeal the spring decision by the B.C. Utilities Commission to give the project, near Nanaimo, a green light.

It did so on the grounds that the BCUC's hearing process was unfair. The Commission, by the way, is supposed to be the public's shield against questionable projects.

It failed.

Because of concerns that Duke Point wouldn't be completed on schedule, Hydro's board of directors has now axed the project.

Regardless, we'll still need more electricity if B.C.'s economy is to continue flourishing.

So, where do we go from here?

Welcome to Site C, the long-shelved hydro-electric mega-project slated for the Peace River near Fort St. John.

The project, which regulators turned down in the early 1980s because there wasn't enough demand for its 900-megawatt capacity, is back on the front-burner in Hydro's ivory tower.

Yes, major environmental concerns will rise again since Site C requires more Peace River flooding. But even in these earliest of planning days it looks as if Hydro's tripping over its own feet again.

In recent consultations with the energy community and other stakeholders, Hydro pitched Site C's latest costs at about $2.3 billion even though costs in original 1981 application were pegged at $2.7 billion.

I'm told that when Hydro was pressed to reconcile this astounding difference, it had simply dropped some big ticket items that were included in 1981 including interest costs during construction, inflation and, most importantly, the costs of building the required new transmission line to the Lower Mainland.

Nor, I'm also told, has it done a basic economic/financial model on the project. Adding these items to the bill could easily put Site C's price tag at $4 billion, sources say.

It may be that even at this price, Site C would be B.C.'s best option for new electricity supply.

But, given its record, domestic electricity isn't the only commodity in short supply at Hydro. Public confidence is a tad rare too,

Brian Lewis is Money editor of The Province. He can be reached at blewis@png.canwest.com

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canada.com
June 27, 2005

VICTORIA -- B.C. Energy Minister Richard Neufeld is musing about the possible revival of one of the most controversial hydroelectric projects in recent history.

Neufeld says the "Site C" proposal to dam the Peace River may have to be revived now that B-C Hydro has decided to scrap the Duke Point gas power plant scheme on Vancouver Island.

Neufeld says the province is looking at a shortage of hydroelectricity in the future, adding that water power is a good way to develop electricity.

Twenty years ago B.C. Hydro caved in to public pressure and shelved the $2.1 billion "Site C" hydroelectric proposal.

But studies on the 900 megawatt facility were dusted off again last year.

However Hydro spokeswoman Elisha Moreno says the area has not been selected as a "preferred option."

The proposal calls for a third dam on the Peace River near Fort St. John and the flooding of thousands of hectares of land.

Broadcast News 2005

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Paul Willcocks
Prince George Citizen
28-Jun-2005

VICTORIA -- A massive dam across the Peace River is a step closer to reality after the collapse of a Vancouver Island power plant, Energy Minister Richard Neufeld said Monday.

Neufeld said the cancelled Duke Point project leaves B.C. Hydro needing more power, and the Site C megaproject is one solution.

"I would think Site C is something we better look at in real terms," Neufeld said from Calgary, where he is part of a trade mission by B.C. oil and gas service companies.

The $2.1-billion megaproject would tap the last great hydroelectric power source in B.C., with a huge earthen dam spanning the Peace River and producing 900 megawatts of power. That's the equivalent of three or four gas-powered plants.

The Site C project, which would be built near Fort St. John, was abandoned in 1991 after a battle with environmental groups.

But Neufeld said B.C. Hydro has updated its plans for the project and is looking at including the dam in its next energy plan, which will be submitted to the B.C. Utilities Commission by the end of this year.

Hydro is spending $1.9 million this year to update its plans for the dam, and hopes to spend another $5.5 million next year.

The corporation sought public comments on the Site C dam earlier this year as it toured northeastern communities.

The dam is likely to be the centre of controversy again if the government moves ahead with the project.

B.C. Hydro's own plan noted that environmental issues remain.

Thousands of acres of land would be flooded, about 25 farm families would lose their homes, and summer water temperatures in the river below the dam would rise, affecting fish.

The project would require extensive consultations with First Nations, who fear the loss of hunting grounds.

But Hydro power is generally considered less environmentally damaging than coal or gas-fired thermal plants, the most likely alternatives. The Kyoto Accord, which aims to restrict the production of greenhouse gases, also encourages development of the project.

And the Peace River has already been dammed, so no wild rivers will be affected.

Hudson's Hope Mayor Lenore Harwood, whose community would be affected by flooding, told BC Hydro earlier this year that she would rather see improvements to boost capacity at existing dams and more emphasis on reducing demand.

Site C still faces many hurdles.

The utilities commission is charged with taking a tough look at B.C. Hydro's plans and cost projections to make sure the dam is the best alternative for consumers. The ultimate approval would have to come from the cabinet, with the first tough decisions expected by early next year.

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Victoria -- B.C. Energy Minister Richard Neufeld is musing about the possible revival of one of the most controversial hydroelectric projects in recent history.

Mr. Neufeld said the Site C proposal to dam the Peace River may have to be revived now that B.C. Hydro has decided to scrap the Duke Point gas power plant scheme on Vancouver Island.

Twenty years ago B.C. Hydro yielded to public pressure and shelved the $2.1-billion Site C hydroelectric proposal.

But studies on the 900-megawatt operation were dusted off again last year. Hydro spokeswoman Elisha Moreno said the area has not been selected as a "preferred option."

The proposal calls for a third dam on the Peace River near Fort St. John and the flooding of thousands of hectares of land.

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