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A difference of opinion

VICTORIA -- With the B.C. government embroiled in a major internal debate over the proposed hydroelectric dam at Site C on the Peace River, Monday's press release from the private power producers was well-timed.
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VICTORIA -- With the B.C. government embroiled in a major internal debate over the proposed hydroelectric dam at Site C on the Peace River, Monday's press release from the private power producers was well-timed.

"Clean-energy projects offer more than Site C," it declared. "Smaller clean-energy projects spread throughout B.C. would offer more economic benefits -- and benefits to First Nations -- than the proposed Site C hydroelectric dam."

No surprise that the self-styled Clean Energy Association of B.C. would say that. Operator of a number of independent power projects, many in partnership with First Nations, the association has long argued the merits of its smaller-scale ventures over BC Hydro's massive $8-billion Site C project.

But the attention-grabber in the release was news that the association had obtained a supportive verdict from KPMG, the international professional services and accounting firm that has also assessed Site C for BC Hydro.

KPMG took as a starting point for its analysis the construction of a dozen hypothetical clean energy projects -- wind-farms, run-of-river hydro and biomass -- with a combined annual output in the same range as Site C.

The resulting report concluded that during construction the projects would add $4.3 billion to the provincial gross domestic product and create 45,200 person-years of employment.

Once operational, they would provide a further $90-million-a-year boost to the economy and almost 700 person-years of employment. Plus there would be benefits to the First Nations partners.

The KPMG report did not make any comparisons to Site C or, indeed, even mention the project. The clean energy folks set up their own comparisons by drawing on Hydro's published reports.

Conclusion: The dozen smaller-scale power projects would offer more jobs and greater economic impact, during both the construction and operational phase, than Site C.

"It is clear that a cost-effective diversity of clean-energy projects situated throughout B.C. has a far greater positive impact on B.C. jobs and the economy, especially for First Nations, than does BC Hydro's Site C megaproject up on the Peace River in northeastern B.C.," said association executive director Paul Kariya.

So matters stood at 3:40 p.m. Monday, when the press release and an attached copy of the report arrived in the electronic inbox on my computer. But 12 hours later, in the wee hours of Tuesday morning, there arrived a second press release calling back the first.

"Due to a misunderstanding, the release was sent prematurely," it read. "Please withhold it while we sort out the problem. We'll get back to you as soon as that is done."

Mid-day Tuesday brought yet another press release, this out of the Toronto offices of KPMG. "KPMG Canada has severed ties with Clean Energy B.C. over its unauthorized release of a draft study by KPMG," it read. "The report was released to the media and other parties without KPMG Canada's express written permission as required."

The release quoted company CEO William Thomas to chilling effect: "KPMG Canada has not issued its final report, nor have we consented to any communication or distribution of that report. This has left us with no option than to terminate the engagement immediately and to disassociate KPMG from the unauthorized release of the draft report."

Heavy response for the relatively minor offence of premature release.

Sure, granted, the cover on my copy identifies the report as a "final draft." Nevertheless, it was a robust, meticulous document, drawing on an extensive methodology and citing multiple sources. The conclusions are debatable but nothing in my reading of the contents would be likely to embarrass the firm or the association.

You had to wonder if something else triggered KPMG's decision to terminate the relationship with extreme prejudice.

Probably it was the press release focus on clean energy projects versus Site C, an unfavourable comparison that KPMG had not specifically drawn. Perhaps the firm feared damage to its relationship with Hydro on Site C and other projects.

As noted at the outset of the column, this is a politically sensitive time to be raising cost-benefit comparisons between Site C and any alternatives.

The government is scheduled to make the final call within the next couple of months on whether to proceed with Site C or go with smaller-scale options. But at this point, the decision is still up in the air.

As I hear it, there's a major debate going on inside government, with the tough-minded staff in the Treasury Board of the Finance Ministry challenging the assumptions and analysis put forward by Site C proponent BC Hydro.

When I put that prospect to cabinet minister Bill Bennett this week, he replied: "Where do you hear these things?" He didn't deny that Hydro was struggling to address multiple concerns raised by the Ministry of Finance.

Which brings me back to the report on the clean energy alternative. The association has removed the document from its website and it also withdrew a summary opinion piece published in some editions of The Vancouver Sun Wednesday.

Though orphaned, the report still strikes me as having merits worthy of scrutiny. Happily some copies survived the scorched-earth responses of KPMG and the association. If any Site C skeptics in the finance ministry would like to peruse a copy, they only need ask.