Water powers the future at Site C
By Scott Simpson
Vancouver Sun
Page H01
02-Jul-2004
Vancouver Sun business reporter Scott Simpson and photographer Ian Lindsay recently spent several days in the Peace River Valley area gathering opinions and images for a five-part series, which begins today, on the proposed Site C dam project. What they discovered was a complex and controversial undertaking that may become a central focus of the province's future energy policies.
- - -
CREDIT: Ian Lindsay, Vancouver Sun
GENERATING CONTROVERSY ON THE PEACE RIVER: The W.A.C. Bennett Dam is now one of two dams generating electricity on the Peace River near Hudson's Hope. BC Hydro is now considering building a third dam at what is known as Site C.
---
HUDSON'S HOPE - The phone started ringing in Mayor Lenore Horwood's office soon after the news broke about Site C Dam.
BC Hydro's oft-discussed $3-billion proposal to build a third dam on the Peace River near Fort St. John was back on the Crown corporation's agenda.
It had been more than a decade since Hydro last put the controversial project in limbo, but demand for electricity is expected to skyrocket by 40 per cent over the next 20 years and Hydro officials have to figure out a way to provide all that power.
Site C is one way to meet B.C.'s future energy needs, but the corporation is considering everything from coal-fired thermal generation to fledgling technology that seeks to harvest energy from the flow of ocean tides.
The first telephone calls about Site C came from reporters looking for a reaction from Horwood, whose quiet community already has two dams located at its outskirts -- the giant WAC Bennett and Peace Canyon dams.
Horwood told them she didn't want to see another dam in the Peace River Valley, even though her husband is one of a preponderance of Hudson's Hope citizens who work for BC Hydro at one of the existing dams.
After that pronouncement, the calls started coming from residents of communities as far from northeastern British Columbia as you can get.
The callers wondered why Horwood was opposed to a project that would provide what they considered -- and what Hydro considers -- to be clean, green energy.
"I've had so many people call me from Vancouver Island and say: 'We think that dam would be a great idea'," Horwood recalls.
Surely, they suggested, Site C was a better alternative than the natural-gas-fired thermal generating station that is still under consideration for construction at Duke Point on Vancouver Island?
"I said, 'But it's not in your backyard. It's in my backyard, because I live right on the river there.'
"They said: 'We don't want anything on Vancouver Island, a coal-fired plant, a gas-fired plant. We want you to build the power up there and ship it to us'."
Horwood does not appear to be the kind of mayor who raises her voice or pounds her desk.
But that kind of logic tends to raise a lot of hackles in a community, with a population of 1,100, that will celebrate its 200th birthday next year.
A lot of people in Hudson's Hope don't have telephone service, or natural gas, and although they live within a few minutes' drive of the biggest hydroelectric facility in the province, some don't even have electricity.
They think the notion that B.C.'s northeast should continue to make sacrifices in order to sustain the populous southwest and Vancouver Island is, to be polite about it, amusing.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The W.A.C. Bennett dam, named after the late Socred premier of B.C., is on the Peace River near Hudson's Hope.
- - -
"Some people have been relocated because of the first dam. They would have to be relocated again," Horwood said.
"We're living in a place where we contribute a third of the electricity created in the province, but we still have people who can't get phone lines, or electricity, or natural gas.
"Some who don't have electricity can see the W.A.C. Bennett Dam from where they live -- and they can see the lights from the dam at night."
If Hydro decides to go ahead with Site C, and if the provincial cabinet decides to approve the project, it would take nine years to build.
Hydro began accumulating the land for Site C in 1975, and estimates that an area of almost 6,000 hectares of Peace River Valley -- 15 times the area of Stanley Park -- would be flooded or developed for the creation of a new reservoir on the Peace.
The dam itself would be located about 90 kilometres downstream from the WAC Bennett and Peace Canyon Dams, seven kilometres southwest of Fort St. John.
It would annually produce about 5,000 gigawatt hours of electricity -- more than enough to supply two cities the size of Surrey. It would boost Hydro's total capacity to produce electricity by five per cent, or about five years' population growth in British Columbia.
The floodwaters of the reservoir would extend about 85 kilometres back upriver to Lynx Creek, a subdivision of Hudson's Hope.
The Crown corporation continues to be the largest landholder along the river, employing a property management company in Fort St. John to lease its property to local farmers and ranchers.
Public display boards at Peace Canyon Dam, which opened in 1980, have always referred to Site C as part of Hydro's plans for the Peace.
In a submission earlier this year to the B.C. Utilities Commission, Hydro included Site C on a list of four potential dams that could be built over the next decade -- at a total cost of at least $5.2 billion.
Others on the list include two additional dams on the Columbia River, and one in the Lower Mainland on the Elaho River, which is the main source of water for the Squamish River.
Hydro warns that the Elaho project, a 145-metre high earthfill dam, is likely to meet strong opposition from the Squamish First Nation, and the actual unit-cost to produce electricity there would be about double the expected cost to produce electricity at Site C.
Hydro says the Border Dam and Murphy Creek Dam on the Columbia in southeast B.C. carry similar liabilities, with environmental, social and economic issues making their development highly uncertain.
As with the Elaho, they would produce less than a third of the electricity Hydro would gain from Site C -- and only about one tenth of what the W.A.C. Bennett dam produces.
Murphy Creek would flood some populated areas, including a wastewater treatment plant in north Castlegar and a "significant amount" of low-lying properties.
Border Dam would cause some flooding around Trail, and would threaten some local fish populations.
"There is little to no local support for these projects as this is one of the last undammed sections of the Columbia River. There is significant intrinsic value to keeping it in its natural state," Hydro states in its submission to the BCUC.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The Gates of the Peace River, formed where the river cuts through rock, will be covered up to two-thirds of its height if BC Hydro goes ahead with its Site C dam proposal. Biologist Brian Churchill looks out from one of the bluffs.
- - -
Hydro's submission estimates that electricity from Site C would cost about 5.4 cents a kilowatt-hour to produce, based on the $3-billion capital cost of the facility and other factors.
Electricity from the other projects would be substantially more expensive, running at between eight and 11 cents per kilowatt hour to produce.
That appears to make Site C cheaper than almost any other form of electricity production that could be brought on-line in British Columbia.
Hydro also calculates that it's as cheap or cheaper than any alternative technology including coal-fired thermal generation, which is the main source of electricity across North America.
However, strong doubts about Hydro's projected cost for Site C are surfacing at electricity rate hearings in front of the B.C. Utilities Commission.
By some estimates, the cost to produce electricity at Site C will be at least 50 per cent higher than Hydro's comparatively rosy prediction, pushing the cost of energy from Site C to about 8.1 cents.
Hydro's initial published estimate for the project was $2.1 billion, although that figure was enlarged to $3 billion in June during a series of hearings in front of the commission.
Hydro is using the $2.1-billion figure as the basis for its estimate of a production cost of 5.4 cents per kilowatt hour of electricity from Site C.
At $2.1 billion, Site C is the cheapest option in the province for new electricity supply, next to coal-fired thermal generation.
But when the extra $1 billion is added in, the cost to produce electricity from Site C jumps to about 8.1 cents a kilowatt hour.
At that price, Site C no longer stands out from the pack. It would be comparable in cost to electricity that could be produced from burning woodwaste, or natural gas, or from wind power, or even geothermal energy.
Hydro is preparing to spend $1.9 million on preliminary studies, and the corporation estimates that the final cost to complete all studies associated with Site C will be about $17.4 million.
"Before they spend a penny, why don't they give us the business case and the financial model showing whether or not this thing is even in the ballpark in terms of being an economic source of electricity?" Hydro critic David Austin asks.
"They should not spend even a dime before they do that."
Of the four hydroelectric projects on Hydro's list, Site C is the most advanced.
- - -
Given the controversy Hydro expects for the other three, it may be safe to say that Site C will be the last large hydro project to receive serious consideration in British Columbia.
Hydro is proposing a wide array of projects and scenarios to meet demand over the next 20 years -- including energy conservation programs, independent power projects, generation fired by gas and even coal, and additional supply from existing facilities.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
Lenore Horwood, the mayor of Hudson's Hope, knows the history of BC Hydro's Site C proposal in detail.
- - -
In many scenarios, Site C isn't even a factor, with Hydro instead proposing state-of-the-art gas-fired generation plants at Kelly Lake near Clinton to meet the bulk of new demand.
Other scenarios show a mix of new supply from independent power producers, plus Site C, plus repowering of the Burrard thermal generating station.
Nearly all the plans call for significant contributions from the installation of additional generators at the existing Mica and Revelstoke facilities.
Reinvestment at Hydro's existing facilities, including generator system upgrades at W.A.C. Bennett/G.M. Shrum Generating Station, would provide modest gains, and the Power Smart electricity conservation program would add a bit more.
Hydro also continues to pursue a range of projects on Vancouver Island, including a 275-megawatt gas-fired thermal generating plant near Nanaimo.
Although Hydro and the provincial government are trumpeting all of these projects as potential solutions to B.C.'s dependence on electricity imports, there is nothing in the plan to suggest that Hydro is going to stop buying electricity from sources outside the province.
Imports from Alberta and the United States annually provide B.C. with roughly half the amount of electricity that Site C would produce.
In its submission to the BCUC, Hydro says it's going to continue to buy electricity elsewhere.
The corporation tends to import electricity when it's cheap, and sell it when it's expensive, so a continuation of that strategy is annually worth hundreds of millions to the B.C. provincial treasury.
The major snag in the entire system seems to be the distance between the biggest sources of electricity, such as W.A.C. Bennett, and the biggest groups of consumers, in the Lower Mainland and on Vancouver Island.
- - -
About seven per cent of the electricity travelling along transmission lines from major facilities in central and northern B.C. is lost en route as heat, so there's economic advantage to having local sources of power.
Hydro has already begun to suggest that Vancouver Island would have a more reliable electricity supply if it was generated on the island.
It also talks about a "regional disparity" that exists on the Lower Mainland as well, with the most populous part of the province consuming electricity that is delivered via long-distance transmission lines that are already close to capacity.
The proposal would have to be approved by the BCUC, and then given assent by provincial cabinet, before Hydro could take any action.
The utilities commission won't render a verdict until later this year, although B.C. Energy and Mines Minister Richard Neufeld is already talking about it.
Hydro CEO Bob Elton emphasized that there are still a lot of unanswered questions about Site C.
"We don't actually have a bias one way or the other," Elton said. "We know it's an option that might be attractive, but we don't know if it's the best option."
That's why, he said, Hydro wants to undertake a preliminary $1.9-million study that would seek to determine if there are any large obstacles, or advantages, to moving ahead with it.
CREDIT: Photo by Ian Lindsay, Vancouver Sun
The intakes for the ten generating units of the W.A.C. Bennett dam bring water from the Williston reservoir.
- - -
Elton agreed with a suggestion that, beyond Site C and the three other projects under consideration, the era of big hydroelectric developments in British Columbia is over.
"If you look around the world there aren't that many large hydro projects being built. There are some countries that are building them, but it's a hard thing to do."
He said the advantage of Site C is that it would be located on a river that's already host to two dams, rather than a pristine stream.
He said Hydro remains certain that B.C. requires large-scale electricity projects, whether it's hydro or some other form of production, in order to provide the province with a secure supply that's capable of delivering energy when demand hits its peak on cold winter evenings.
"I think initially the debate should be: 'Would you prefer a dam to be built on the Peace, or would you prefer a large gas plant, or a large coal plant, or would you prefer to rely on electricity imports?'
"We're trying to do two things. We're trying to provide all of British Columbia with enough energy so that when you turn on the lights, every day of the year, there's enough of it to satisfy everyone's requirements.
"Second, we're trying to provide you with capacity -- so that at 6 p.m. on a really cold Monday evening in January, the capacity is there to meet that peak demand.
"We cannot rely purely on a lot of smaller projects. We need some large ones to go with the small ones. Site C at this pint is jut one of the possibilities, and we don't know if it's the best one."
In 1981, the B.C. Utilities Commission accepted Hydro's contention that it was in the interest of its customers -- the residents of British Columbia -- to create a new source of electricity so long as demand continued to escalate.
The commission concluded that there were no "overriding impediments which would dictate the abandonment of the Site C project."
However, the commission noted that Hydro had not demonstrated that it was preferable to any of the alternatives that could be undertaken in order to keep up with demand load.
If the utilities commission expresses unqualified support this time around, Hydro would then have to consult with stakeholder groups including First Nations, undertake environmental studies, and nail down the financial costs.
Beyond that, the final decision would rest with provincial cabinet.
Hydro is currently proposing to spend $1.9 million on initial studies that could provide some direction to cabinet, and to the utilities commission, on whether more detailed work should proceed.
Meanwhile, the people in Hudson's Hope wonder what's going to happen.
Hydro has been holding onto land in the Peace Valley for 30 years, and Mayor Horwood is anxious for a decision, one way or the other.
"If Hydro hadn't put Site C in their plan, I would have been the first person to call and say: 'Then sell the land,' " Horwood said.
"The holding of the land is part of the municipality's concerns. It's holding up development for our community. There is land along the river that could be developed for recreation, for tourism -- all because of a project that has been on the books for 30 years.
"It might not happen for another 20 years, so it's a 50-year plan as far as I'm concerned.
"Should one level of government have the ability to hold the land for that period of time?"
TROUBLE ON THE PEACE:
Day 1:
BC Hydro's $3-billion dream
Day 2:
The Alberta impact
Day 3:
The massive W.A.C. Bennett Dam
Day 4:
Life in the floodplain
Day 5:
Native opposition
Posted by Arthur Caldicott on 02 Jul 2004