BC Hydro’s controversial Site C hydropower development will cost “dramatically” more than the utility’s $8.8-billion estimate, according to a leading U.S. energy economist hired by a landowners’ association that opposes the project.
“Using industry standard assumptions, Site C is more than three times as costly as the least expensive option,” Robert McCullough stated in a report for the Peace River Landowners Association (PVLA). “While the cost and choice of options deserve further analysis, the simple conclusion is that Site C is more expensive—dramatically so—than the renewable [and] natural gas portfolios elsewhere in the U.S. and Canada.”
British Columbia adopted accounting changes last year that reduced the calculated cost of the project, McCullough found. But “those changes are illusory and the costs will eventually have to be paid either by Hydro ratepayers, or provincial taxpayers,” the Globe and Mail reports. McCullough “also disputes the rate that BC Hydro used to compare the long-term borrowing cost of capital for Site C against other projects, noting that other major utilities in North America use higher rates for such projects because they are considered risky investments.”
He said the paper trail behind the calculation “can only be described as sketchy and inadequate.”
The landowners were expected to release the report yesterday and call on Premier Christy Clark to delay the project. “I find it frustrating,” PVLA President Ken Boon told the Globe. “How come it’s left to us to do the due diligence that the government should be doing?”
Meanwhile, “independent power producers have argued they can meet B.C.’s growing need for electricity at a competitive cost,” Hunter writes. “But they say the province tilted the playing field last fall when it changed the way it collects dividends from BC Hydro and reduced water rental charges for the Crown corporation.” (h/t to The Energy Mix reader Fred Schwartz for pointing us to this story)