Site C dam


The Site C Dam is a hydroelectric dam on the Peace River, 14 kilometres southwest of Fort St. John in northeastern British Columbia, Canada. It is located approximately 80 kilometres downstream from the W. A. C. Bennett Dam. Completed in 2025, it is the fourth largest producer of hydroelectricity in British Columbia, with an expected capacity of 1,230 MW and an expected annual output of 4,600 GWh of electricity.
A publicly accessible viewpoint is located immediately west of the City of Fort St. John, on the south side of Highway 97.
The project has drawn considerable opposition from several quarters due to its planned flooding of agricultural land, damage to the local environment, high construction cost, possible alternatives, and the uncertainty of future electricity prices and demand in the province. Two Treaty 8 First Nations and local landowners made legal challenges to the dam, though these were dismissed by the Federal Court of Appeal. In addition, over 200 scholars, as well as the Royal Society of Canada, expressed concerns to the federal Liberal government, citing weakness in the regulatory review process and the environmental assessment for the project. In May 2016, the federal government of Canada stated it is "not revisiting projects that have been reviewed and approved". On 11 December 2017, John Horgan, the premier of British Columbia, announced: "We've come to a conclusion that, although Site C is not the project we would have favoured or would have started, it must be completed", thus guaranteeing the completion of the project. On 8 November 2024, BC Hydro announced that the reservoir was full and that the first generator was operational.

History

When completed, Site C will be the third of four major dams on the Peace River initially proposed in the mid-twentieth century. The first project was the flagship W. A. C. Bennett Dam 19 kilometres west of Hudson's Hope. The Bennett Dam began operation in 1968 and formed Williston Reservoir, which is the third largest man-made lake in North America, spanning 250 kilometres north-south and 150 kilometres east-west. The lake is 95% larger than the Site C reservoir will become. The second dam, Peace Canyon Dam, was completed in 1980 at a point 23 km downstream of the W. A. C. Bennett dam. The third dam, "Site C", was also proposed for 83 km downriver of the Peace Canyon dam, or approximately 7 km southwest of Fort St. John. Site C would flood an 83 km length of the Peace River valley, widening the river by up to three times, as well as a 10 km length of the Moberly River valley and 14 km of the Halfway River valley. The fourth proposed dam on the British Columbia segment of the Peace River, Site E, near the BC–Alberta border, was removed from the planning process during hearings in 1982.
After hearings between 1981 and 1983, the British Columbia Utilities Commission turned down the Site C project. The commission was critical of BC Hydro's forecasting methods, declaring that it neither explicitly took energy prices into account nor relied on statistically significant past patterns of behaviour. BC Hydro then chose to purchase electricity under long-term contracts from independent power producers, and it continues to do so today. As of 2017 these annual purchases are about four times the capacity of Site C. Once the initial contracts with BC Hydro expire, these independent producers may be free to export their electricity.
In April 2010, passage of the Clean Energy Act exempted the project from further BC Utilities Commission review. Site C was being reconsidered by BC Hydro for two years prior as the utility reconsidered expansion of its dam capacity on the Peace. Also in April 2010, the provincial government announced it would move forward on planning for the project, moving it to the regulatory review phase. The review was mandated under the Canadian Environmental Assessment Act, 2012 and the British Columbia Environmental Assessment Act. To avoid duplication, the governments of Canada and British Columbia set up a cooperative federal-provincial environmental assessment, including a joint review panel process.
In October 2014, Site C received environmental assessment approvals from the federal and provincial governments after a three-year environmental review, including a federal/provincial Joint Review Panel process. In December 2014, the provincial government announced a final investment decision, approving the construction of the hydroelectric project at $8.335 billion, as well as a project reserve of $440 million. A notice of Site C construction commencing in 2015 was issued in July 2015. By March 2016, site clearing, attempts at bank stabilization and the search for bedrock took the majority of BC Hydro's focus - there were no "works" in the ground; the diversion tunnels had not yet been started. BC Premier Christy Clark's stated intention was to get dam construction "to the point of no return" by the time of a scheduled general election in May 2017. The provincial election resulted in the previous Liberal government being defeated and a New Democratic government taking office. The newly elected government requested the BC Utilities Commission 2017 review.

Utilities Commission 2017 review

BC's opposition New Democratic Party promised a review of the project by the BC Utilities Commission should they win the 2017 general election. Hydro critic Adrian Dix called the B.C. Liberal government "reckless" for not having already done the review, as was recommended by the federal-provincial Joint Review Panel led by Harry Swain.
On 2 August 2017, following a provincial election, the NDP government requested that the BCUC evaluate the cost to BC Hydro ratepayers of continuing, suspending or terminating construction of the Site C dam. In its Final Report published on 1 November 2019, the BCUC reached two overarching conclusions:
  • The cost to ratepayers of suspending construction would be significantly higher than either continuing or terminating the project, to the tune of $3.6 billion. In addition, there are significant risks that it would not be possible to restart the project due to permitting and other issues.
  • The cost to ratepayers of continuing or terminating construction is similar, given the assumptions that the BCUC finds to be most reasonable. Both alternatives also had risks which may cause one or the other to be more costly to ratepayers either in the short-term or over a longer period.
To assist the government in its decision-making, the BCUC included in the Final Report some sensitivity analyses to show how the cost estimates would change if different assumptions were applied.
Following the release of the Final Report the BCUC responded to additional questions from the BC government which clarified that:
  • Site C sunk and termination costs were correctly treated in the rate impact analysis ;
  • The same financing cost assumption was used for Site C and wind/geothermal investments in order to ensure the review was agnostic regarding ownership structure;
  • Demand-side management costs were included in the alternative portfolio at their cost to the utility, as these would be the costs incurred by BC Hydro;
  • The period used to recover Site C sunk costs from customers if the project was terminated would be subject to BCUC approval. While no determination as to the appropriate period was made, a 30-year period was assumed for the rate impact analysis with sensitivity analysis on 10- and 70-year amortization periods; and
  • The BCUC considered electrification in arriving at its assessment that it would be more appropriate to use BC Hydro’s low load forecast in its economic analysis. The BCUC also considered recent developments in the industrial sectors, accuracy of historical load forecasts, GDP and other forecast drivers, price elasticity assumptions, future rate increases, potential disrupting trends and historical flattening electricity demand.
On 11 December 2017, John Horgan, the premier of British Columbia, announced: "We've come to a conclusion that, although Site C is not the project we would have favoured or would have started, it must be completed", thus guaranteeing the completion of the project.

Construction

In August 2024, BC Hydro began filling the reservoir, and stated it would take between 2 and 4 months to complete. BC Hydro issued a warning to stay away from the reservoir for at least a year, citing concerns of possible unstable terrain and floating debris.
In November 2024, the reservoir was announced to be full with the first generating unit being operational. The remaining 5 generating units are to start operation between fall 2024 and fall 2025. With an estimate once fully operational the dam will increase the province's power production capacity by about 8%.

Cost

A cost estimate produced during the 2007 feasibility study placed the financial cost at a maximum of C$6.6 billion based on the 1981 design, safety, and engineering standards. An updated cost projection was released in May 2011 placing the estimated cost at $7.9 billion, which was revised to $8.3 billion in 2014. This does not include the cost of a transmission line to major population centres, estimated in the $743 million additional range, bringing the total estimated cost to approximately $9 billion. At the invitation of the British Columbia Utilities Commission, Deloitte published a report on the project, and noted that it's likely to miss a crucial river diversion deadline; this will bring the cost to just under $10 billion. In 2015, some experts stated that the costs could reach as high as $11 to 12 billion. In February 2021, the estimated price tag rose once again, reaching $16 billion.
Economic estimates in 2016 by Harry Swain, former chair of the Joint Review Panel and former BC deputy minister of Industry, projected that if all the power were sold to the US spot market, as little as $1.8 billion would be returned, and the rest of the cost would be covered by taxpayers. Power consumption has not been increasing despite increasing population. Swain also stated that power roughly equivalent to that produced by Site C could be reclaimed from American producers under the Columbia River Treaty at no capital cost to the province; the power is currently sold to American utilities at about half the projected cost of Site C power. British Columbia Utilities Commission stated that the Canadian entitlement under the treaty, however, is not a suitable source of dependable capacity.
BC Hydro failed to disclose $128 million worth of no bid contracts it awarded, largely to SNC Lavalin until this information was revealed by The Narwhal following a Freedom of Information request. An independent review found that the same amount of energy could be produced for around half the cost using a combination of other, largely renewable energy sources.