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Home News Sierra Club report predicts cost of Site C will increase significantly

Sierra Club report predicts cost of Site C will increase significantly


FORT ST. JOHN, B.C. – A report released by Sierra Club B.C. today makes the case that the provincial government is going to leave residents to foot the bill for the Site C dam as LNG companies will pay a heavily-reduced rate for electricity.

According to the environmental group’s report, the $8.3 billion Site C has increased roughly 127 percent from its original budget of $6.6 billion when the dam was announced in 2010. The report goes on to say that the cost is likely to increase further, according to the average of cost overruns at other hydroelectric projects around the world of 70 percent.

The Sierra Club also argues that the dam is meant as a subsidy for the proposed LNG industry in the province, the development of which has stalled due to three main factors: a late entry to the industry, the collapse of LNG prices in Asia, and the decreasing cost of other renewable energy. “When BC made its announcement, Australia’s massive Gorgon LNG project had already been under construction for two years,” the report states. “It began producing in 2016, the same year the BC government rashly and incorrectly predicted its first LNG plant would come online. 2016 was also the year that the first US LNG export facilities came online.”

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The report says that since the U.S. and Australia have built LNG export facilities, the increase in supply saw the price of LNG cut in half from those in 2013.

Meanwhile, the Sierra Club also argues in their report that if the cost of the Site C dam does go over budget, the cost of electricity from the dam could reach as high as $164.35 per megawatt hour. Meanwhile, the report states that the government originally set out to charge the LNG industry only $83.02 per MWh, a number that has since decreased. “By November of 2016 the government’s concern for ratepayers had evaporated and they announced that the rate charged to LNG companies would be lowered by $28.68 per MWh to $54.34 per MWh. That reduced rate will not cover the cost of production, so ratepayers will have to absorb the loss,” says that report.

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