CABINET TO HEAR FROM SIX EXPERTS ON SITE C
Premier wants his colleagues to be well-informed before big decision
As Premier John Horgan tells it, he decided to invite six experts to address the cabinet on Site C next week to help get his colleagues up to his level of knowledge.
“I know a lot about energy,” said Horgan. “I was the energy critic for a decade in the opposition, and I worked in energy when I was in government.
“I want to make sure that my caucus and my cabinet are as well informed as possible on a multibillion-dollar decision that’s going to have an impact on people for a long period of time.”
The decision being the fate of “the largest public project B.C. Hydro has ever undertaken,” as Horgan characterized it during an interview with me Thursday on Voice of B.C. on Shaw TV.
“They’re $2 billion into the project already. To stop it would mean $2 billion in remediation. To finish it could be another $10 billion. When you start talking in billions, you’re starting to talk about real money.”
The New Democrats first asked the B.C. Utilities Commission to do an expedited review. “I give them full marks for doing what would have been normally many, many months of work in just a few weeks,” said Horgan, who briefly considered replacing the B.C. Liberalappointed commissioners, then thought better of it. Still, the New Democrats were disappointed at the commission’s fence-sitting on whether the best option for ratepayers was cancellation or completion of Site C.
“We’ve had people taking shots at the assumptions that the commission made, so the government has asked, through the Ministry of Finance, for some clarification,” explained Horgan.
Don Wright, Horgan’s deputy minister, has also taken the unusual step of assembling a group of experts to take an oath of confidentiality and address the cabinet directly at a behind-closeddoor session next Thursday.
“We’ve invited six experts that are well known in industry and in energy circles, to come and give us their views, just a 10- or 15-minute presentation from each of them, and then a bit of a debate,” said Horgan.
The six: Marc Jaccard, the Simon Fraser University professor who headed the utilities commission under the last NDP government; Robert McCullough, the Oregonbased energy consultant to the Peace Valley Landowners; David Craig with the major commercial power consumers; Colleen Giroux-Schmidt from one of the private power producers; Karen Tam Wu of the environmentalist Pembina Institute; and David Austin, consultant lawyer for the Clean Energy Association.
When I remarked to Horgan the group struck me as more anti- than pro-Site C, he said they were chosen more to get a range of views.
“I don’t look at it as pro or con,” he said and reminded me that in multiple appearances on the show over the years, he’d taken more than one position on Site C.
“The producers could have pulled up a dozen different perspectives that I’ve had on this question. It depends on where you are in the economic cycle and whether demand is up or demand is down, price is up, price is down, and so on.”
The experts won’t be providing the last word in terms of cabinet briefings on Site C. That will be up to staff in the Ministry of Finance, working under the direction of Minister Carole James and her deputy, Lori Wanamaker.
“We’ll be having a final decision after we hear from finance on what are the rate implications for people going forward or stopping, what are the costs to the treasury,” said Horgan.
He’s also concerned about the impact on the credit rating and the NDP ability to borrow for other major projects.
“If we burn $4 billion that’s going to have an impact on our ability to build other projects, vitally important hospitals and schools and transit infrastructure in the Lower Mainland. And what are the costs going to be if we go forward with a $10-billion, $11-billion, $12-billion project? What are the rates going to look like?”
Electricity rates being a critical question for a government pledged to keep them low. And the immediate effect on rates could be very different depending on whether Site C is cancelled or continued.
Cancellation means writing off Horgan’s $4 billion. Were the NDP to respect the principle of not sticking future generations with the tab for a non-existent asset, then the writeoff would be amortized in relatively short order — say 10 years.
In the 10-year scenario, the $4-billion writeoff “would have a potential rate impact of 10 per cent,” the utilities commission conceded this week in response to a written question from the government.
But as the government further suggested, if the project were completed, then the cost could be amortized over the many decades that the dam serves as a useful asset providing power to future generations.
So in the cancellation scenario, the New Democrats would be looking at a big rate shock in the short to medium term along with the layoffs and other negatives.
In the completion scenario, with the dam not operational until 2024-25, the government would be able to put off the ratepayer impact for a couple of election cycles.
Not the only consideration obviously. But not to be dismissed, given that the final call on Site C will be made not by the experts, the commission nor the utility, but by a group of politicians gathered around a cabinet table.
If we burn $4 billion that’s going to have an impact on our ability to build other projects, vitally important hospitals and schools and transit infrastructure in the Lower Mainland. JOHN HORGAN, premier of B.C.