Site C – Who gets the power and who pays?

B.C. Hydro has switched on the first turbine at the new Site C dam, which means someone has to start paying for it.

Who gets the power and who pays? The short answer is the liquid natural gas industry gets the power and B.C Hydro customers and B.C. taxpayers pay. Does that make you mad? It should.

Here’s how we ended up here and what we can do about it.

A cost estimate produced during the 2007 feasibility study for the Site C dam placed the financial cost of building the Site C dam at a maximum of $6.6 billion, based on the 1981 design, safety and engineering standards. Cost projections kept going up until February 2021, when the estimated cost reached $16 billion.

No transmission lines were built to major population centres because the Site C dam was not built to light up and heat 450,000 homes but to serve the LNG industry by electrifying operations normally powered by methane.

Currently, B.C. Hydro’s strategic plan calls for a $3 billion, ratepayer-funded transmission line from the dam to new LNG terminals on the West Coast.

The B.C. government kick-started its LNG industry in 2017 when then-premier John Horgan persuaded LNG Canada to build a $40-billion export terminal in Kitimat (the price included both Phase 1 and Phase 2).

To convince the project's owners (Shell, Petronas, PetroChina, the Korean Gas Corporation and Mitsubishi Corporation) to proceed, the provincial government offered $6 billion over 40 years in tax and regulatory relief, with the expectation it would receive $22 billion in revenue over the same period.

The province’s only currently operating LNG terminal is Tilbury LNG, though several more are close to operational or are expected to be approved soon. LNG Canada Phase 1, Cedar LNG and Woodfibre LNG are either under construction or have been sanctioned, while two others, Ksi Lisims and LNG Canada Phase 2, are looking to be sanctioned.

The Woodfibre LNG terminal is a strange marriage between Sukanto Tanoto, a controversial Indonesian billionaire and private utility empire Fortis Inc. The only way Woodfibre makes economic sense is if FortisBC ratepayers cover the cost of boring a twin 24-inch pipeline nine kilometers through a mountain and under the Squamish River.

That major project is supposed to take four years to complete, at an unknown cost. Woodfibre would collapse without the provincial government propping it up.

Normally, a company would burn 10% of the fracked gas to generate the power to cool it, but that would release carbon, which B.C.’s government is trying hard to reduce. The B.C. government’s oil and gas sector target is to reduce climate pollution by 40% by 2030 and all future LNG facilities are required to be net-zero by that time. To meet the target, modelling shows the vast majority of emissions reductions will need to come from extensive electrification of LNG terminals and in upstream natural gas production.

Tillbury LNG is already operational and not subject to the net zero imperative.

A 2023 report by the Pembina Institute found that if electricity is used to reduce emissions both at the liquefaction terminals and for natural gas extraction through fracking, LNG Canada Phase 1 and Woodfibre alone would need power from the equivalent of 2.5 Site C dams.

For all five LNG plants mentioned above, other than Tillbury, the equivalent of eight new Site C dams would be needed by 2030 for them to be net zero.

There are many sectors besides LNG where clean electricity will be required to support emissions reductions in the upcoming years. Already established sectors, such as transportation, with the adoption of electric vehicles, and buildings where, in most climates, most days of the year, electric heat pumps are cheaper to run than gas furnaces.

Electric water heaters and induction stoves operate with no poisonous exhaust.

People in B.C. are starting to learn the benefits and making the switch to clean electricity which will require increased electrification. Other growing industrial sectors that will support the future clean economy, such as critical minerals mining and green hydrogen production, will also need clean electricity.

Site C could service one LNG terminal, subsidizing fuel exports to Asia while doing nothing to reduce overall emissions, or that new power could electrify hundreds of thousands of B.C. homes, immediately improving people’s health and saving them money for years to come.

It remains unclear if Premier David Eby would entertain pivoting away from LNG in light of fresh evidence that it’s a risky bet financially.

If you think the electricity from Site C Dam would be better used to electrify our province than to subsidize the sunset LNG industry let David Eby and his NDP government know.

Janet Parkins is a member of Climate Action Now! and Frack Free BC.