This report has been prepared by McCullough Research for the Peace Valley Landowner Association (PVLA) and the Peace Valley Environment Association (PVEA)

Site C Expert Report: In First Year, Site C will lose $376 Million Exporting Power to USA
The PVLA and PVEA filed a report yesterday with the BCUC’s Site C Inquiry from McCullough Research on export prices. In the report, energy expert Robert McCullough found that Site C will lose $376 million in its first year of operation alone. This is due to the fact that unneeded power will be sold at a loss to the USA. Losses in future years may be more or less depending on the demand for electricity.

“This new expert report only reinforces the already strong case for cancelling Site C,” said PVLA President Ken Boon. “Unlike big hydro dams, renewables like wind and solar can be deployed to meet existing demand – there is no need to sell unneeded power at a loss.”

Date:               September 24, 2017

To:                   British Columbia Utilities Commission

From:              Robert McCullough, Eric Shierman, Robby Gottesman

Subject:          Question 22: Export Sales

The following is an excerpt from the report, starting on page 2:

22.1 Please provide a breakdown of BC Hydro’s market price forecast for F2025 (US $36/MWh) and F2034 (US $46/MWh) showing (in Can $ and US $): Mid C price; wheeling costs; real power losses; other (please describe).

We cannot answer questions concerning British Columbia’s market forecast since details have not been made public.  We can observe that it is a relatively poor forecast since it diverges from actual market prices.

Figure 1: BCH’s forecasted mid-c price and ICE forward price
The red line represents forward prices taken from the ICE MDC (on-peak) and OMC (off-peak) markets on September 22, 2017.

The differential between the LCOE of Site C and the forward Mid-C price is considerable.  In 2024, for example, selling the output at September 22nd prices on the Intercontinental Exchange would lead to a significant loss:

($C31.25-C$105) x 5,100 GWh = – C$376.1 million[1]

[1] McCullough Research.  Costs of Continuing Site C and the Alternatives.  August 30, 2017.  Page 7.
Click the image below to download the unabridged report (10 pages):
Robert McCullough is Principal of McCullough Research in Portland, OR, and for over thirty-seven years has advised governments, utilities, and aboriginal groups on energy, metals, paper, and chemical issues. He has testified repeatedly in state, federal, and provincial courts as well as before Congress and regulatory bodies. His testimony in front of the Senate Energy Committee is credited with initiating the Enron trading investigations during which he worked for the U.S. Department of Justice and three western attorney generals. He has consulted for U.S. and Canadian clients on hydroelectric issues in many states and provinces, including on many occasions, presenting on issues before Canadian regulators.
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                                       Sunflowers in the Peace River Valley       Photo:  Andrea Morison

Dear Friends of the Peace,

Apologies for the error in the version of this that was sent late last night!  In the rush to get it out and after a long day, some of the links weren’t correct!  They are corrected below.  Additionally, I have added a few questions/comments and facts from our experts have also been the Resources page of our blog.

The Community Input sessions associated with the British Columbia Utilities Commission’s review of Site C begin tomorrow, Saturday, September 23rd in Vancouver.  These sessions will take place in various locations throughout BC and we encourage as many of you as possible to attend and show your solidarity for putting the economic and environmental disaster, also known as Site C dam, to rest – for good!

The sessions will conclude on Wednesday, October 11th.  Please see the complete schedule here and find out more about the process and how you can get involved at the sessions here.

What concerns should I bring to the BCUC?

As promised, we have some comments and concerns that you may choose to bring forward to the inquiry process, whether by speaking at one of the events or making a written submission which you can do through the BCUC website here.

We are fortunate to have received comments, advice and suggested questions related to the BCUC’s Preliminary Report from a number of very credible experts.  Following are some of the key messages that they suggest we bring to the BCUC Commissioners’ attention:

  • Thanks to BCUC for undertaking this review of Site C.

 

  • Thanks to BCUC for asking BC Hydro to provide significantly more information.

 

  • Can you please do your best to ensure that BC Hydro provides the required information in a timely fashion?

 

  • Ask BCUC to devote their energy to findings on alternative portfolios.

 

  • Even if Site C is on time and on budget, and even if BC Hydro forecasts were true, alternatives will save ratepayers money.

 

  • Let me know how I can support your (BCUC’s) efforts.

 

  • Can you tell me what my hydro rates will be if we: a) proceed with Site C;  b) bring Hydro’s debt down to a reasonable amount; and c) bring the regulatory accounts  from $6 billion to zero?

 

  • Can you tell me why Site C is even being considered given that demand has been flat for the last 10 years and is expected to continue to be so?

 

  • Can you tell me how many jobs Site C is really providing?  How many are for British Columbians, Canadians from other provinces and how many are foreign workers?

 

  • Given that we have several dams in this province as well as the potential for the Canadian Entitlement to the Columbia River Treaty, Burrard Thermal and the Northwest Electrical Grid, why does BC Hydro keep telling us that we need Site C for back up power? It is essentially a large run-of-river project, isn’t it?

 

  • If we are currently exporting 90% of the amount of power that Site C is expected to produce, then why wouldn’t we use more of this power ourselves and not build Site C power which is about three times as expensive?

More questions will be added to this list, which is available on our blog.

Additionally, we have produced a brochure full of facts from our experts that you may find helpful.  Please take a look at it, print it off and share it with your friends, co-workers and family.

Thank you so much for your on-going support as we push to ensure that the government and the BCUC hear us loud and clear – let’s get this dam stopped for good and soon!

For the Peace,

Andrea Morison
Peace Valley Env. Assc.

For those of you who are interested in keeping up-to-date on the findings and quotes from experts such as Robert McCullough, international energy expert;  Dr. Harry Swain, former chair of the Joint Review Panel for the environmental assessment on Site C; and Eoin Finn, retired partner of a major accounting and consulting firm, please see our latest brochure.

You may also find the brochure helpful in preparing your submission in response to the BCUC Community Input sessions on Site C.

September 21, 2017

This report has been prepared by McCullough Research for the Peace Valley Landowner Association (PVLA) and the Peace Valley Environment Association (PVEA).

 

Date:              September 21, 2017
 
To:                 McCullough Research Clients
 
From:             Robert McCullough
 
Subject:          BCUC’s Preliminary Findings

Last night, the British Columbia Utilities Commission (BCUC) released its preliminary findings in the Site C inquiry.  The two hundred and five page preliminary findings are very direct about the many failings in BC Hydro’s continued support for Site C.
 
First and foremost, the document continuously criticized BC Hydro for failing to provide relevant and supportable materials. This was BC Hydro’s important opportunity to ‘show its work’ and demonstrate to the BCUC the detailed basis for the assertions BC Hydro has made in support of continuing Site C.

However, despite the 800-page BC Hydro submission, the lack of substantive content and transparency did not go unnoticed by BCUC. The gamble lost – the BCUC has responded with 73 official questions representing requests for hundreds of files, studies, and calculations.
 
Second, the BCUC has, preliminarily, rejected the foundations of the Site C submission.  Is Site C on time and on budget? The preliminary findings makes it clear that no one knows. Will it be delayed?  Deloitte’s concerns about the 2019 river diversion—and the significant cost consequences of that—are supported in the preliminary findings.
 
Is it needed? BC Hydro’s forecasts are undocumented, but historically far too high. And the findings question a variety of the forecast components.
 
How much does Site C cost? For years BC Hydro has used the mysterious “UEC” measure – Unit Energy Costs – without definition or a formula. The UEC has effectively been rejected.
 
Should Site C enjoy special low cost financing not used for alternatives? As every analyst has noted, this odd idea makes no economic sense.  The BCUC has rejected the special financing calculations.
 
Are renewables viable? BC Hydro has held that renewables aren’t viable in the province – apparently the exception for states and provinces in North America. The BCUC has not accepted this argument either.
 
Can the surplus energy and capacity be sold to the United States?  The BCUC has questioned the lack of detail in this assumption and demanded evidence of why expensive BC Hydro energy could be profitable in the face of rapidly declining prices in the Mid-Columbia market.
 
Overall, the BCUC has effectively removed the foundations of BC Hydro’s defense of Site C.  It has requested that the defense be resubmitted in its entirety, but this time with transparent calculations, detailed analyses, and compatible industry methodology.
 
It should be noted that Deloitte and the BCUC are operating under a punishingly short schedule and performing admirably.  The scale and depth of the comments in the preliminary findings document are very encouraging.

– Robert McCullough
 

The PDF of the report can be downloaded here.

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                                                   Fall in the Peace River Valley              Photo:  Wendy Francis

Very exciting times right now in our campaign to protect the Peace River Valley!  I’m sure many of you are aware of the numerous comments that support many of the messages that we have been putting out therer for years from the Deloitte LLP independent review of Site C, as requested by the British Columbia Utilities Commission (BCUC) last week.  Additionally, international energy expert Robert McCullough has endorsed many of the Deloitte findings and added his own expert opinion as to why Site C is the wrong choice for BC.

Most importantly, the Deloitte report concludes that it would be cheaper to cancel Site C than to suspend the project.  Canceling Site C would cost approximately $1.2 billion, while suspending construction until 2025 would cost $1.4 billion.

For more highlights from the Deloitte report, please see this excellent article by DeSmog Canada.

How can you get involved in this final push to save the Peace River Valley?

The BCUC is holding Community Input sessions on their review of Site C in locations throughout the province, starting in this Saturday, September 23rd and concluding on October 11th as follows:

 Location Date (2017) Time Venue
Vancouver Saturday, Sep 23 1:00–5:00 p.m. 1125 Howe St , 12th floor
Kamloops Sunday, September 24 6:00–10:00 p.m. Kamloops Coast Hotel
Kelowna Monday, September 25 6:00–10:00 p.m. Kelowna Coast Capri
Nelson Tuesday, September 26 6:00–10:00 p.m. Nelson Best Western Hotel
Prince George Friday, September 29 6:00–10:00 p.m. Prince George Ramada Hotel
Hudson’s Hope Saturday, Sept 30 6:00–10:00 p.m. Pearkes Centre
Fort St. John Sunday, October 1 6:00–10:00 p.m. Fort St. John Pomeroy Hotel
Fort St. John Monday, October 2 6:00–10:00 p.m. Fort St. John Pomeroy Hotel
Vancouver Thursday, October 5 6:00–10:00 p.m. 1125 Howe St, 12th floor
Nanaimo Tuesday, October 10 6:00–10:00 p.m. Nanaimo Coast Bastion Hotel
Victoria Wednesday, Oct 11 6:00–10:00 p.m. Delta Ocean Pointe Hotel

We hope that as many of you as possible will attend the hearings closest to you.  On Friday, September 22nd, we will share key highlights from our economic experts’ review of the Preliminary Report on Site C by the BCUC which we will encourage you to share in your presentations at the input sessions.  If you prefer not to speak, attending in person as a show of solidarity is still helpful.

Further details including how to register to attend, speak and/or email submissions to the Community Input sessions can be found here.

Help us FLOOD THE HEARINGS!

We need people to make calls to our petition signers and encourage them to attend the hearings.  If you can spare even one hour to make calls from your home, please email Morag Keegan-Henry at morag@forceofnaturealliance.caand she will get you set up to use CallFire to contact people from the petition list.

Vancouver Community Input Session Event
If you are in Vancouver on September 23rd, make your way down to 1125 Howe Street between noon and 5 p.m. to help flood the room with opposition to this dam.  We will meet outside the hearinngs at noon, an hour before they begin, to get organized, and then flood the very first Community Input session with a show of opposition.

We encourage you to sign up to speak, but we also need folks to show up to wear our Stop Site C t-shirts, hold signs, and show the BC Cabinet that this decision is important to British Columbians, and that we’re ready to hold them accountable.

We look forward to a great turnout.  If you’re on social media, please share and invite your friends through our Facebook event page for this action.

The momentum is so positive now!  All your support is really paying off!  It’s been a long road, but we feel like we’re almost there – just a few more bursts of action and we should have this dam stopped!

For the Peace,

Andrea Morison
Peace Valley Env. Assc.

MCCULLOUGH RESEARCH
ROBERT F. MCCULLOUGH, JR.
PRINCIPAL

6123 REED COLLEGE PLACE 􀀀 PORTLAND 􀀀 OREGON 􀀀 97202 􀀀 503-777-4616 􀀀
ROBERT@MRESEARCH.COM

SUBMISSION TO BCUC – WHAT WE HAVE LEARNED ABOUT SITE C

1. Terminating Site C and building a renewable portfolio of Wind, Solar and
Geothermal would save British Columbia $.7 to $ 1.6 Billion. Greater savings
could be achieved by including upgrades to existing hydro facilities. The savings
would be even greater if Site C is not on time and on budget ($1.5 to $5.9
Billion) or if demand for electricity is less than BC Hydro’s overstated load forecast
requiring more power to be exported at a loss.

2. Site C is not needed to nor is able to act as a back-up battery for times when
intermittent resources such as wind and solar are unavailable. The Williston
reservoir already plays this role since it has two hundred and fifty times the storage.

3. If Site C were completed, BC Hydro will almost certainly lose money on any
exports of surplus electricity to the United States.

4. The findings of Deloitte LLP on Site C delays, cost overruns, and electricity
demand and energy generation alternatives are consistent with our findings
and the findings of other acknowledged energy experts.

DELOITTE LLP – KEY FINDINGS ON SITE C

On Delays and Cost Overruns – There is likely to be a cost overrun of $1.7 to $4.3 billion or 10% to 50%.

On Energy Demand – Site C is not needed. BC Hydro’s previous long term demand forecasts have overestimated demand for electricity by nearly 31%.

On Alternatives to Site C – There are environmentally friendly and less costly alternatives.

For the full reports go to http://www.peacevalleyland.com/sitecinquiry.
Robert McCullough is Principal of McCullough Research in Portland, OR, and for over thirty-seven years has advised governments, utilities, and aboriginal groups on energy, metals, paper, and chemical issues. He has testified repeatedly in state, federal, and provincial courts as well as before Congress and regulatory bodies. His testimony in front of the Senate Energy Committee is credited with initiating the Enron trading investigations during which he worked for the U.S. Department of Justice and three western attorneys general. He has consulted for U.S. and Canadian clients on hydroelectric issues in many states and provinces, including on many occasions, presenting on issues before Canadian regulators.

Here’s the whole press conference that was held yesterday with information from legal counsel, Rob Botterell, energy expert, Robert McCullough and former Site C JRP chair, Dr. Harry Swain – presenting on the need to ensure that the remainder of the BCUC process is as comprehensive and transparent as possible and providing rationales for putting this project to bed for good – we can save $1.6 billion by stopping it.

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