A hydroelectric venture in central Labrador should serve as a cautionary tale for B.C. and its own ambitions to build a multibillion-dollar dam in the province91裸聊视频檚 northeast, the former head of Newfoundland and Labrador91裸聊视频檚 public utilities regulator says.
David Vardy, a former economics professor and retired civil servant in that province, published a letter Tuesday addressed to the B.C. Utilities Commission containing more than a dozen recommendations based on lessons learned from Muskrat Falls.
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The utilities regulator was tasked earlier this month by B.C.91裸聊视频檚 new NDP government to review the economic viability of Site C, an $8.8-billion energy project under construction on the Peace River.
91裸聊视频淏.C. has the luxury of being able to stop this now without going any further,91裸聊视频� Vardy said in an interview. 91裸聊视频淚n terms of the take-away from Muskrat Falls: It91裸聊视频檚 not too late to stop it.91裸聊视频�
Vardy91裸聊视频檚 letter outlined the similarities between the two provinces91裸聊视频� megaprojects: Both are backed by powerful Crown corporations, both were exempt from the usual regulatory oversight process, at least initially, and both have experienced ballooning costs over time.
The price tag for Muskrat Falls has more than doubled from original estimates, swelling to $12.7 billion in the province of only about 525,000 people. Vardy said the project91裸聊视频檚 cost of about $24,000 per person would double the province91裸聊视频檚 per capita net debt and pose a major threat to its solvency.
Vardy encouraged B.C.91裸聊视频檚 Utilities Commission to ensure Site C is built according to current energy needs and is made as adaptable as possible, warning that the rapid pace of technological advances could make the project obsolete before long.
He also emphasized the importance of independent public oversight and a rigorous public review process, lauding the analysis being conducted by the utilities commission.
The review began Aug. 9, with interim findings due six weeks later and a final report expected by Nov. 1.
The commission91裸聊视频檚 review process in B.C. was once standard before the previous Liberal government91裸聊视频檚 clean-energy laws permitted some projects, including Site C, to circumvent the regulatory process.
An email from B.C.91裸聊视频檚 Energy Ministry said the government would consider the results of the report, as well as environmental and First Nations considerations, before making a timely decision on the future of Site C.
Energy Minister Michelle Mungall declined further comment 91裸聊视频渙ut of respect for the independence of the review process.91裸聊视频�
BC Hydro could not immediately be reached for comment.
The Independent Contractors and Businesses Association told the utilities commission in a statement released Tuesday that BC Hydro must complete Site C.
91裸聊视频淭he Site C dam has been the subject of a robust, nearly three year, independent review and its business case is solid,91裸聊视频� president Chris Gardner said. 91裸聊视频淲e cannot produce this kind of high quality, reasonably priced, clean energy anywhere.91裸聊视频�
NEWS RELEASE: ICBA makes the case for to the BC Utilities Commission.
91裸聊视频� ICBA | #Get2Yes (@icbabc)
There are about 2,400 people working on Site C.
Gardner described Site C as an 91裸聊视频渁ll-important backbone91裸聊视频� that would allow B.C. to transition to other renewable energy sources, adding that ratepayers cannot be expected to spend billions of dollars and get nothing in return.
But Vardy dismissed the logic of chasing money already spent, which he called sunk costs.
91裸聊视频淭he key consideration must be future costs,91裸聊视频� he said.
91裸聊视频淲e may find it very difficult to walk away from an investment 91裸聊视频� but what really counts is how much money you91裸聊视频檙e going to have to spend before you get something that91裸聊视频檚 worth anything.91裸聊视频�
Geordon Omand, The Canadian Press
