B.C. Hydro has filed submissions with the provincial and federal regulators on its Site C Dam project in northern B.C. which comes with a $2-billion increased price tag to $7.9 billion.
Despite the increase, B.C. Hydro says it will move the project ahead because it is still among the most cost-effective options available to meet the province's electricity needs.
The mega-project in northeast B.C., if it's approved, is expected to have spinoff benefits for Prince George, a service and supply centre in northern B.C.
B.C. Hydro said the cost of the project has increased from $6.6 billion in 2010 because the design has been updated, but also because labour and material costs have risen. The design was updated, in part, to meet improved environmental and seismic standards.
The project is estimated to deliver electricity at $87 to $95 per megawatt hour, less than the price of recent power calls from biomass, run-of-the-river and wind, at $129 per megawatt hour.
The project is also estimated to produce 10 per cent more electricity each year, enough to power 450,000 homes.
"When compared to other alternatives, it makes a very effective cost for rate payers," B.C. Hydro spokesman David Conway said Thursday.
The provincial and federal regulatory agencies still have to determine exactly how the review will unfold, but once they accept the filing as complete the formal process is expected to take 18 months or more.
The project itself has a seven-year construction timeline, and would provide an estimated 7,000 direct jobs and another 28,000 spinoff jobs, according to B.C. Hydro.
Conway said the Crown agency has already been consulting with the public and First Nations on the project, including in Prince George.
Those consultations are expected to continue, although there has been criticism of the project from some Peace River area residents, First Nations and environmental groups.
Initiative Prince George (IPG), the city's economic development agency, views Site C a a catalyst for economic growth in the city.
"We're after a big chunk of the service and supply activity," said IPG CEO Tim McEwan.
IPG stressed that projects must meet social, environmental, economic and cultural tests.
NDP energy critic John Horgan is concerned about the cost increase and whether the project, if necessary, is the best value. He noted that gas-fired power plants may be more competitive.
"We are embarking on a very controversial project that has environmental implications, agricultural implications and First Nation hurdles, and we are still not sure how much power we need and if this is necessarily the best place to get it," he said.
Horgan said that scrutiny should be provided by the B.C. Utilities Commission, but the B.C. Liberal government earlier exempted Site C from the commission's review process.
Jobs, Tourism and Innovation Minister Pat Bell said he is confident the federal and provincial environmental assessments, and consultations with First Nations, will give the project a full vetting.
Bell is supportive of the project, particularly as it will have economic benefits for nearby communities like Chetwynd, Mackenzie and Prince George. The Prince George-Mackenzie MLA stressed that while the price has gone up, so has its energy output.
"I'm personally, and the government generally, is excited about the project. It will be huge economic driver for northern B.C.," said Bell.
