Documents released under Freedom of Information legislation raise questions about timing of decision on controversial hydroelectric project

B.C. energy ministry staff were instructed to prepare a press package saying the Site C dam would proceed almost a week before Premier John Horgan held final deliberations with his Cabinet, according to documents released under Freedom of Information (FOI) legislation.

Energy ministry bureaucrats and BC Hydro also compiled information for the NDP government to demonstrate that terminating the $10.7 billion Site C project would nail BC Hydro customers with higher hydro bills, according to the documents.

The rising hydro bill scenario was later overstated by the government to cast the worst possible light on the consequences of halting the project.

The FOI documents indicate that at least five days before the provincial cabinet met last December 6 and reportedly made the final decision to proceed with the Site C dam, and at least 10 days before Premier John Horgan announced “with a heavy heart” that the project would continue, senior officials in the lead ministry in charge of the file considered the decision a done deal.

In announcing the decision, the government told reporters that cancelling the project would lead to an almost immediate and unacceptable 12 per cent hydro rate hike, adding $200 to the annual hydro bill of a Vancouver Island household.

According to the heavily redacted FOI documents, on or before December 1 the B.C. energy ministry asked BC Hydro to compile different scenarios to explain the impact of a 12 per cent hydro rate increase.

On December 2, BC Hydro president Chris O’Riley sent an email — with the subject heading “termination rate increase put in terms of customer bills” — to energy ministry deputy minister Dave Nikolejsin and assistant deputy minister Les MacLaren.

BC Hydro detailed examples of the impact of a 12 per cent rate hike in four different regions of the province, for three types of dwellings: single family dwellings, townhouses and apartments.

Out of 12 different scenarios BC Hydro sent to the B.C. energy ministry, the only one the government chose to highlight to reporters on the day of Horgan’s announcement was the most expensive scenario — the impact on a single family dwelling on Vancouver Island.

And even that scenario was taken out of context, because it was for a household with electric heat, rather than an oil or gas furnace — a detail omitted in final press documents prepared by the energy ministry.

According to Statistics Canada, only 28 per cent of B.C. households use electric heat.

According to the FOI documents, the impact of a 12 per cent rate hike on residents of B.C. ranged from $3 a month, or $37 a year, for Lower Mainland and Vancouver Island apartments using non-electric heat to $17 a month for a single family dwelling on Vancouver Island using electric heat. A house using non-electric heat would have paid about one-half that in a worst case scenario.

Project financing experts told The Narwhal that the 12 per cent rate hike scenario presented by the government was out of step with standard practice for North American utilities that decide to discontinue an energy project.

For reasons that have never been adequately explained, the government insisted that the rate hike would be high because BC Hydro would have to recover $2.1 billion in Site C dam sunk costs — along with what BC Hydro claimed would be $1.8 billion in remediation costs — over 10 years instead of writing them off over decades like other North American utilities.

The FOI documents raise the question of why government staff appear to have been instructed only to prepare communications materials for an announcement to proceed with the Site C project, days in advance of the final Cabinet deliberations.

According to the documents, energy ministry communications staff had a news release and four backgrounders for a decision to proceed with Site C in hand by December 1.

The documents also show that by December 4, two days before the final Cabinet meeting about the decision, the energy ministry had called on BC Hydro to vet and edit the press release and three of the backgrounders that would later be used by NDP cabinet ministers and MLAs to justify their choice to proceed with Site C dam construction. BC Hydro approved the final backgrounder the following day.

And on December 1 BC Hydro president Chris O’Riley was asked to review an energy ministry sanctioned document called “Site C Responses,” which, according to an email sent to him from BC Hydro policy and research manager Leela Magre, had already been “approved by the relevant business groups.”

That document contained answers to anticipated questions, including details about the hydro rates increases stemming from a 12 per cent rate hike and answers downplaying the project’s impact on agricultural land.

David Haslam, communications director for the energy ministry, noted in a December 1 email to ministry colleagues that the policies in attached Site C dam announcement backgrounders “reflect proceeding only.”

“The next step for me is to produce a suite of materials for the cancellation scenario,” Haslam wrote. “I will action that upon receiving the cancellation narrative document.”

But it does not appear that Haslam received any cancellation narrative document.

The response to the FOI — asking for written messages, visual messages and media plans related to the December 11 announcement — does not include any press release or backgrounders with a cancellation scenario.

It does, however, include numerous drafts of a press release and backgrounders based on a decision to continue the project despite the $2 billion jump in its price tag revealed during the December 11 announcement.

B.C. Premier John Horgan announces the province will complete construction of the Site C hydroelectric dam on Dec. 11, 2017. Photo: Province of British Columbia via Flickr.