The following was submitted by Roger Bryenton, April 17, 2016:
What BC Residents Have and Have Not Been Told About Site C Dam and Electricity Prices
- No Need for New Electricity.
BC Hydro assessed hundreds of options as part of their Integrated Resource Plan, and Appendices (RODAT). Conservation or Demand Side Management can contribute more in savings than the entire Site C project would provide. And all the savings are at the point of use and save transmission and distribution losses – a bonus of at least another 6% to 8%. This is 1100MW of capacity, or 5100 GWh of electricity per year.
In addition there are 400 MW of savings BC Hydro did not include, that are routinely used to manage demand peaks.
There are hundreds of small generators that could be utilized during peak periods, a few hours a year.
There are over 1000MW that BC is entitled to under the Columbia River Agreement! What are they thinking? We do not need more electricity.
- The “Real” Cost of Site C – No figures given for getting the electricity to people – another 1 to $2 Billion?
The “original cost” of Site C was projected to be $8.8 Billion. This is equivalent to $95/MWh, at the point of interconnection, in the Peace region. This was artificially reduced by BCHydro choosing another more favourable discount rate, from 6% to 5%, creating the illusion of a lower cost for power, $58 to $61/MWh. Adding the cost of transmission and distribution to most of the customers, in the Lower Mainland, is another $1 to $2 Billion, equivalent to $30 to $50/MWh increasing the real cost of power to over $100/MWh. Site C is about the 20th of 200 projects in cost. Conservation is the least expensive at half the cost of Site C, followed by many lower cost renewables: small projects better suited to matching any increases in demand.
- What are the Risks? Interest Rates, Demand for Electricity, Cost Over-runs.
Demand – If the “need” for electricity drops, and a project that is not needed begin with has to be paid for. Wrong assumptions guarantee wrong answers. Mistakes today result in major corrections needed tomorrow. Big mistakes today can result in disastrous consequences tomorrow. When interest rates rise, the project costs will also increase. Remember 1981 when interest rates rose to 18% – that doubles the cost every 4 years! What about inflation, technical complications and wage increases? They will increase the cost of the project.
- Savings are Cheaper than New Power
Conservation – “wasting less” can save as much power as Site C will generate. It will do it at roughly half the cost!
- Double the Number of Jobs, from Conservation
Conservation – wasting less, will create more than double the number of jobs that Site C will. These jobs will be geographically diverse – across the province wherever electricity is presently used. Under a “Conservation strategy”, workers will not have to relocate for short term assignments, they can stay where they are keeping families intact and making a difference to their communities.
- No Utilities Commission Review
The BC government decided and legislated that the Site C power project would be built. The BC Utilities Commission , which until now, oversees every electricity rate review, addition, change or removal, was specifically excluded from reviewing the Site C project. Why? Because the government knew there was no justification for this project, and rammed it through. No questions asked!
- Follow the Money – Who “Wins”
On an $8 Billion project, a lot of people are going to make a lot of money!! Premier Christy Clark and her Cabinet Ministers will be well looked after when they retire from politics, and their patrons remember how much money flowed into their hands during this project, and possibly into re-election campaign funds as well. Watch and see.
- Porkbarrel Politics? “Let’s pretend this is a good idea, and it will create jobs!” It will be our “legacy” project.
For an unnecessary project, with no economic or financial benefit, and a “real” legacy of trespassing and denying First Nations their constitutional treaty rights, flooding an irreplaceable farmland valley, contributing to greenhouse gas emissions and worsening climate change conditions, it is morally obscene for any politician to pretend that this project to proceed.
- Future Rate Increases – Let Our Children and Grand-children Pay.
New Supply – BC Hydro’s internal criteria for new projects is that they must be “Incremental” as well as “Lowest Cost”. How is an 1,100 MW massive dam and powerplant either incremental or lowest cost? BC Hydro’s own analyses show conservation is the lowest cost! It is also incremental. It was rejected in favor of Site C.
Lowest cost, incremental conservation will reduce future rate increases.
New Connection Costs – Utility rates need to reflect the ongoing cost of new supply. How then, can BC Hydro justify huge incurred costs, with a tiny increase of connection cost?. 200 amp service, or 25kW, costs $496, or $500; 400 amp service or 50kW costs $798, $800 nominally. Thus BC Hydro are sending a message that it will only cost $300 for an extra 25k W of capacity. That is about $12/kW.
Assuming that Site C will cost about $8 Billion for 1000 MW of capacity, that would be equivalent to $8000 per kW. Yet they are offering it to large residential homeowners with spas, point of use water heaters, air conditioning, and other large loads – radiant floor heating, electric stoves, clothes dryers and water heaters, at $12/kW. How is that message consistent with a cost of new supply at $8000, over 600 times greater?
Wrong messages will not reduce demand, and eventually must be paid for, with massive rate increases.
Recent BCUC hearings attempted to determine an appropriate allocation for residential rates, using an approximate 50:50 split between energy and capacity costs, to be reflected by a rate which is then 50:50 energy and capacity. The folly of these 2015-2016 Rate Design hearings is that a 1100 MW addition, from Site C, is only a 10% capacity/demand increase but results in a 40% increase in debt. What happens to the 50:50 split in 8 years when a 40% increase in costs must be attributed?
A 10% increase in capacity should only result in a 10% increase in costs, ideally. By spending 4 times that amount, 40% debt increase, the capacity allowance should also increase by 4 times, thus the 50:50 split today will be completely wrong in 8 years.
Wrong calculations will result in wrong rates, distortions and future corrections are then needed.
- Site C Is NOT “Green” , It is An Environmental Disaster – Reservoirs Generate CO2, Methane and Mercury-Contaminated Fish
In the report on the Columbia River Treaty, it was noted that reservoirs require substantial mitigation; there are several recommendations about the substantial nature of the effects. Yet BC Hydro and the Province of BC appear to have ignored these recommendations, as if they do not apply to the “pet project”. Site C.
Reservoirs are known to generate CO2 and methane, as biological processes decompose plant material and flooded riverbed areas. In upstream reservoirs on the Peace, fish are no longer safe to eat because of mercury contamination, another biological process of decomposition in the reservoirs. Traditional First Nations’ food supplies are substantially affected, and have been since these other power plants were developed years ago.
- Farming Forever? – Flooded Valleys Cannot be Farmed, or “Un-Flooded”
There are 50,000 acres of productive farmland and forests, enough to feed a million people, which will be lost forever. There are hundreds of families and wildlife supported by this farmland, which will be devastated by such an ill-conceived and completely unnecessary project.
The BC Government legislated the removal of this land as part of the project approval process. This prevented normal reviews and project justification. There is no precedent for such an outrageous act of parliament. They completely ignored their own guidelines and policies.
- First Nations Betrayed – Was BC Hydro Invited to Destroy Heritage, Cultural lands, Artifacts and a Way-of-life?
Perhaps the greatest travesty is that both the Government, and BC Hydro have not complied with the Treaty rights of the First Nations people that will be affected. This is completely unconscionable. Both Federal and Provincial governments have ignored the needs and wishes of these people. “Mitigation” has been relegated to “buy-offs”. How do you “mitigate” the destruction of a way of life that has endured thousands of years? What does the concept of “heritage” mean, and imply, and what are the consequences of destroying a culture?
These are some of the “Lies from BC Hydro Hydro” to keep Customers and Residents of BC “In The Dark”
Roger Bryenton, 2016, P.Eng (former), MBA, Energy Systems Consultant