Sarah Cox has a stunning story today, and it gives a good overview into why so many cabinet ministers likely chose not to run again, and why Premier Horgan would have wanted to avoid this issue until given a majority government. It took nearly 9 months for her to get these documents and she has released all documents within her article for the public to read. You can link to it by clicking on the headline below, and it will open in a new page:

INVESTIGATION

Top B.C. government officials knew Site C dam was in serious trouble over a year ago: FOI docs

” Stability of the dam found to be a ‘significant risk’ in May 2019, more than a year before information about deepening geotechnical problems and escalating costs were shared with the public

The belated BC Hydro reports said the Site C dam faces unknown cost overruns, schedule delays and such profound geotechnical troubles that its overall health is now classified as “red” — meaning it is in serious trouble. 

In late January, The Narwhal submitted a freedom of information request to BC Hydro, asking for all Site C project assurance board agendas, minutes, reports and recommendations.

Premier John Horgan created the project assurance board in December 2017 after his government approved the dam and added another $2 billion to the project budget. But the NDP government subsequently refused to release any of the board’s findings or a list of its members. 

Following an appeal to the Office of the Information and Privacy Commissioner after BC Hydro missed a legal deadline for responding, we received 2,247 pages of documents almost seven months after filing the request….”

Among the issues noted in the FOI Sarah Cox received:

• Key sections of the documents, including information pertaining to rising cost pressures and the severity of key project risks from January 2018 to January 2020, are redacted. 
• The technical advisory board found the stability of the dam is “a significant risk and the hazards associated with the weak foundation have been adequately recognized.” 
• The advisory board also said the Site C dam’s design — changed to an unconventional L-shape, much to the concern of retired BC Hydro engineer Vern Ruskin — needed to be checked. 
• It outlined seven steps for BC Hydro to follow, including calculating “the factor of safety” at the end of construction and again at the end of reservoir filling, and requested an update at its next meeting. 
• The core components of the dam are now in question due to the lack of solid ground on which to anchor the dam structure, powerhouse and spillways — an issue flagged years ago by both SNC Lavalin and Klohn Crippen as a potential project risk. 
• The design team presented information on the “small amount of movement on a bedding plane” and “the compression of the foundation from powerhouse buttress loading,” the report noted
• They include the “stability of the earthfill dam and tailrace wall,” described as a “significant risk due to the “weak foundation” in a 15-page report that recommended seven steps to check the project’s design and calculate the factor of safety. 
• A second risk is the right bank foundation, which forms the shorter arm of the radically re-designed L-shaped structure. Structures on the right, or south, bank of the Peace River include the power house, spillways and earthfill dam.
• The technical advisory board also flagged the earthfill dam foundation and grouting as a significant risk.  
• The stability of slopes and foundation at the dam site could potentially be “decisively” affected by hydrogeological conditions and phenomena, the technical advisory board noted. 
• “Simple flushing of a borehole has immediately raised the groundwater levels in an extensive section of the right abutment and has caused displacements on bedding planes. Rainfall has triggered similar effects.
• A further risk is the thermal performance of roller compacted concrete and cracking. Cracks in the roller compacted concrete have “been recognized and studies are underway to evaluate their extent and significance,” the board noted.   
• “If, ultimately, substantial grouting is necessary to repair such cracks, a complex and costly program could result,” the board said, adding it wished to be kept informed on progress “associated with managing this risk.”

 

Now, as with all issues and news of substance that has come out during the election:

“Neither BC Hydro nor the B.C. government are responding to media questions during the provincial election campaign, unless inquiries pertain to health and safety or statutory requirements. “

Of course not. It would be ridiculous to expect a government trying to campaign on its record, to answer questions on the record, wouldn’t it?

One the eve of yet another election, I feel like we are back where we all started. Both the prior government and this government were warned not to proceed with this project. The 1991 government commissioned Weisgerber report, clearly warned that this area of the river valley shouldn’t see any further development… because of the known and clear risk of slides, movement and unstable geology of the area. This is something I have written about many times,as have many other critics, experts and all the people of the Peace river who know this area like the lines on their hands. It is well known, and the 2 Old Fort slides just downstream are evidence of this.

The BCUC Review report actually mentioned the geotechnical risks several times.

On page 102, section 5.2.1.3, it states the geotechnical and construction challenges would delay the river diversion.

On pages 106 and 107 it mentions the poor geotechnical conditions impacting the transmission tower foundations, highway 29 construction,, the design of which didn’t even meet Ministry of Transportion design safety requirements, the diversion tunnels and more.

At that time, the current construction issues mentioned above hadn’t even started yet, but a look at the other significant issues at that time would make anyone think twice, particularly because this is an untested design with an earth fill dam core.

On page 108, the BCUC review panel states: ” in the absence of more specific information on the risks of subsequent activities, the panel is left to conclude that further delays are more likely than an in service date of 2024..”

On page114, Deloitte speaks to the risks, stating they had concerns about the main contractor, PRHP; that BC Hydro had underestimated the contract costs based on the vast differences on projected versus actual to date, and that issues might arise if conditions deviated from assumptions made.

Page 115 has several submissions warning of cost overruns, specifically mentioning Muskrat Falls as a comparison ( something I have done here several times, even before Horgan became premier )

You get the idea. The issues in this valley are not new, the only thing new here is that Horgan is now trying to distance himself from the facts and the truth, that they did know the risks and decided to move ahead regardless of what was to come. Much of this work wasn’t started or was still in pre-construction when they came to office. In this November 2017 article, Horgan even mentioned it, saying: 

British Columbia Premier John Horgan says technical challenges developing on the slopes of the Site C dam construction site could tip the balance against completing the province’s partially-built megaproject.

“The new revelations about more geotechnical problems make it increasingly difficult to look at this project as one that will be in the best interests of British Columbia,” the premier told reporters at the B.C. NDP’s convention on Saturday.

The NDP ordered a regulatory review of the project — nearly $2-billion has already been spent on its construction — shortly after it formed a minority government in July. That review by the B.C. Utilities Commission, the province’s independent utilities regulator, was completed on Nov. 1. In its final report, the BCUC concluded Site C is already over budget and will cost at least $10-billion to complete. Initial estimates indicated that the project would cost around $8-billion. The regulator also raised doubts in its report about whether the power generated by the dam will be needed.

How does this impact you and I, some may ask? Two ways. All BC Hydro debt is guaranteed by the Province of British Columbia, so what happens at BC Hydro has a direct relationship to the financial credit rating of the province. Back in January of 2017,  Moodys Investors services warned that the BC governments credit rating was going to be put at risk by growing debt at BC Hydro. 

You can thank years of BC Liberal mismanagement using deferral accounts for that hot mess. The NDP did make  some good changes by taking care of some of the deferral accounts, and dealing with some of the IPP contract mess started by Campbell, but they unfortunately did nothing over this other hot mess started under the Clark government: https://thetyee.ca/News/2020/10/07/BC-Hydro-Bets-Interest-Rates/?fbclid=IwAR1tNHNaTWV_rZaFEMFCjtJgz8gZt6EmGJCj0YtipqvkF9azAF7lis-26M4

Critics are calling it another BC Hydro scandal. The Crown corporation, already beset by burgeoning costs and geotechnical difficulties at the controversial Site C dam, has racked up $1 billion of liabilities betting on interest rates.

BC Hydro revealed the losses in its first-quarter report, released in September.*

Marc Eliesen, former CEO of BC Hydro and Ontario Hydro, said the corporation’s gamble that it could predict future interest rates has backfired. “BC Hydro took a trip to the casino and played roulette and lost big time,” he said.

The interest rate hedging program began in 2016 with the goal of protecting ratepayers from higher future borrowing costs if rates rose.

Under the program, BC Hydro bought investment vehicles that would increase in value if interest rates rose. The corporation’s managers believed the profits could be used to offset higher borrowing costs if, as they predicted, interest rates went up.

“They thought they would make money on interest rate hedges and put it in a default account which would help offset borrowing costs in the future,” explained Richard McCandless, a former civil servant who wrote about the loss on his blog.

Instead, interest rates fell, and BC Hydro has lost money on the hedging program.

“It is a scandal,” said McCandless. “They took a gamble and lost.”

BC Hydro, which carries $23.3 billion in debt, anticipates the need to borrow another $10 billion between 2017 and 2024, partly to pay for the over-budget Site C dam and about $2 billion a year in other capital projects.

The hedging program gained approximately $160 million by fiscal 2017/18.

But as interest rates declined, losses began to increase sharply beginning in 2018. They have now ballooned to more than $1 billion.

“Will they continue to lose money?” asked Eliesen. “Yes, because all the monetary authorities say interest rates will be low or lower in the future due to the pandemic.

“We now have $1 billion in liabilities that will be passed onto Hydro ratepayers — the citizens who consume and pay for electricity in the province,” he said. “This is another black mark on BC Hydro, and no one has taken responsibility.”

Gee, with the site C fiasco, and this growing debt, and the need to borrow even more PLUS, the global financial impact of the pandemic impacting provincial revenue and the certainty we will be in a deficit for years….how is this going to impact our provincial credit rating, the provinces ability to borrow at low government rates… and the amount we pay on our hydro bills? Energy poverty is very much a thing in BC already. 

We don’t need a Milburn review to figure out what to do with site C. We need someone with the courage to stop this train wreck once and for all. Remediating the site will keep men and woman in work for years while new and better projects get underway in BC. 

I’ll have another post tomorrow. See you then. But if you see or hear anyone saying the NDP couldnt stop this or didn’t know, show them this post.Or remind them how many times these posts were read, shared by and used by BC NDP MLA’s before they were even elected.

We won’t let anyone rewrite history.