Today the BC NDP announced that they would proceed with the construction of Site C. Their justification for moving forward is distracting, irrelevant and unacceptable. Ultimately, the BC NDP made a choice. They chose to eliminate the tolls on the Port Mann and Gold Ears bridges instead of cancelling Site C.
Back in August I pointed out how wrong it was to eliminate the tolls on these bridges. One of the key reasons was that the outstanding debt of $4.7 billion (Port Mann – $3.6 billion; Golden Ears – is $1.1 billion) would have to be moved from self-supporting debt to taxpayer-supported debt. Increasing taxpayer supported debt is worrying. The Province’s borrowing rates are largely determined by our credit rating, overall taxpayer supported debt load and the ratio of provincial revenue to provincial debt. Increasing this debt load risks the potential of downgrading our credit rating which in term would increase borrowing rates on the entire provincial debt. Back in August, the BC NDP simply announced that they would eliminate tolls without checking with credit rating agencies and without concern for the rising provincial debt. It turns out that there was room to increase debt by $4 billion without triggering a downgrade.
Yet today, they evoke concerns about increasing provincial debt as the reason why Site C must move forward. Had they not so crassly eliminated the tolls in a desperate attempt to grab votes, Site C could have been cancelled today.
What’s even worse is that today the BC NDP announced that the cost of Site C has now risen to $10.7 billion. Back in 2010 when Site C was advanced to stage 3 of the approval process, its price tag was somewhere between $5 billion and $6.6 billion. In 2011 the price tag increased to $7.9 billion. Two years later it was $8.3 billion and then this past year the price tag grew to $8.9 billion, accompanying a year-long delay in the construction schedule. The BCUC report published on November 1 concluded that the costs for Site C woulld be $10 billion. In fact, the B.C. Utilities Commission said this: “Given the nature of this type of project and what has occurred to date, total cost for the project may be in excess of $10 billion, and there are significant risks that could lead to further budget overruns.” The cost, they found, could end up being $12 billion — and this only two years into a nine-year project.
I have been pointing out the fiscal folly of building Site C since October 2013 and I’ve documented the many, many interventions I’ve made on the subject on this site. Our efforts culminated in us sending a letter to the BC Government last week outlining the case against Site C.
I know that there are many, many British Columbians who are devastated by today’s decision. What bothers me more than anything is that I know of quite a number of NDP MLAs who campaigned on stopping Site C. For example, the agriculture minister, Lana Popham, earlier this year told a Victoria audience:
“we would send this to the BCUC immediately, we would speed up the BCUC process, make it sixty days, and we would have that decision. There is no way that this project would pass.”
“in my view, we’re nine seats away from being able to stop Site C.
Michelle Mungall, the Minister for Energy, Mines and Petroleum Resources told a group of Site C protesters that her government would stop Site C and implement their Power BC plan instead. John Horgan, our premier proudly held up a “Site C sucks” sign when he visited the Peace Valley prior to the last election.
When in opposition, George Heyman (now the minister of environment) was noted as saying “the dam project is wrong on every count because of its negative impact on agriculture, the environment, First Nations, clean energy commitments, economics, and the promise of jobs”. Many other NDP MLAs have spoken out against Site C or attended the annual Paddle for the Peace in celebration of the beautiful Peace Valley and in opposition to Site C.
Below I reproduce the press release we issued following the BC NDP announcement.
Andrew Weaver responds to Government’s decision to continue with Site C
For immediate release
December 11th, 2017
VICTORIA, B.C. – Today Andrew Weaver responded to the NDP government’s decision to proceed with the construction of Site C.
“Our caucus is extremely disheartened by this decision. It is fiscally reckless to continue with Site C and my colleagues and I did everything we could to make this clear to the government.
“This government promised to be better than the B.C. Liberals. On this issue, the NDP government’s approach has turned out to be no different whatsoever.
“Since the beginning I have been concerned this would end up being a political decision. Today’s announcement reflects a sad reality for B.C., and British Columbians deserve better. They deserve a vision grounded in bold ideas that will enable our province to be a leader in the 21st century economy, not more empty campaign promises and political calculation.
“The government’s argument that cancelling Site C is too risky due to debt is incredibly cynical. This is a question of priorities. They had no problem adding billions onto the public debt to cancel the tolls on the Port Mann and Golden Ears bridges, transferring those costs to people outside of the Lower Mainland to pick up votes in a couple of swing ridings.
“Today, Site C is no longer simply a B.C. Liberal boondoggle – it has now become the B.C. NDP’s project. They are accountable to British Columbians for the impact this project will have on our future.
“We have seen what is happening to ratepayers in Newfoundland because of Muskrat Falls, a similar project, where rates are set to almost double. I am deeply concerned that similar impacts are now in store for B.C. ratepayers.
“The lost economic opportunities from continuing with Site C are profound. Our caucus has met with dozens of local governments, First Nations and B.C. companies with viable alternative energy projects. As countries across the world embrace small scale distributed renewable energy, this decision keeps B.C. locked in the past and risks foregoing enormous opportunities.”
Sarah Miller, Acting Press Secretary
+1 778-650-0597 | firstname.lastname@example.org
Over the last few weeks Sonia Furstenau, Adam Olsen and I have tried to provide as much evidence as possible to make the case for cancelling the fiscally-reckless Site C megaproject. In fact, since I first raised the fiscal folly of moving forward with Site C in 2013, the case has become much, much stronger culminating in the British Columbia Utilities Commission report released on November 1, 2017.
In question period I’ve contrasted the escalating costs of Site C to the diminishing costs of renewables and noted the parallels with the controversial Muskrat Falls megaproject in Newfoundland and Labrador. I’ve pointed out that Site C was approved as a ratepayer funded subsidy to a non existent LNG industry. I’ve asked why the Columbia River Entitlement and distributed renewable projects have not been explored. And my BC Green colleagues have asked many more questions as well.
With the rising of the legislature last Thursday and ahead of an imminent decision regarding the fate of Site C, my caucus colleagues and I felt it was important to summarize our case against the project in an open letter that we sent to Premier Horgan. Below I reproduce a text of that letter.
December 1, 2017
Premier John Horgan
Office of the Premier
Parliament Buildings, B.C. Legislature
cc: Hon. Michelle Mungall
Minister of Energy, Mines and Petroleum Resources
Dear Premier Horgan,
As we near cabinet’s decision on Site C, we write to you today to urge you to stop construction of the Site C dam.
Our Confidence and Supply Agreement committed government to sending Site C to the BC Utilities Commission (BCUC), BC’s independent regulatory agency, for an independent review of the project. In undertaking this review, the BCUC marshalled significant evidence and undertook an analysis of the implications of pursuing completion, suspension, and termination scenarios; the implications for ratepayers of different scenarios; and the potential for a portfolio of alternative sources of energy to meet demand.
The resulting report was comprehensive and provided a strong, evidence-based rationale for cancelling Site C. This rationale is founded in a number of key findings presented in the report, including:
The BC Green Caucus believes that the findings of the report more than make the case that the best course of action for government is to cancel the project, remediate the land and begin the work of developing a 21st century energy system based on options presented in the alternative portfolio.
This argument is laid out in greater detail below.
Costs and risks of Site C
The estimated cost of Site C has escalated throughout its lifespan. Just last month, when the river diversion deadline was missed, the cost increased again from $8.3 to $8.9 billion, accompanying a year-long delay to the construction schedule.
It was therefore unsurprising to see the BCUC Panel determine that Site C will be behind schedule and substantially over budget. In the BCUC Panel’s words, “given the nature of this type of project and what has occurred to date, total costs for the project may be in excess of $10 billion and there are significant risks that could lead to further budget overruns”. The Panel found that these remaining risks include unresolved tension cracks and disputes with contractors. As such, the Panel found that it is unlikely that Site C will be completed on schedule by 2024, and even that construction costs could escalate even further beyond $10 billion.
This cost escalation is significant, and will have substantial impacts on British Columbia ratepayers. Given that we are only 2 years into what is supposed to be a 9-year construction project, we are gravely concerned about the impact on British Columbians of further expected delays and cost overruns.
As cabinet makes its decision, we hope they will also heed the lessons learned from another large-scale dam under construction, Muskrat Falls, in Newfoundland and Labrador. When the Muskrat Falls Project was sanctioned, it was estimated to cost $6.2 billion plus financing. The costs have since ballooned to more than $12 billion. The impact of this cost increase on rates in Newfoundland is profound. Nalcor Hydro now estimates that costs from the Muskrat Falls dam will result in rates almost doubling.
The lessons from this project are significant and relevant. Just last week the Newfoundland and Labrador government initiated a public inquiry into what happened with Muskrat Falls. Richard LeBlanc, the provincial Supreme Court judge leading the independent inquiry, has said “while we cannot undo the past we can learn from it”. While it may have been too late for their government to cancel their project, it is not too late for BC. We hope this government heeds his words and chooses a different path.
The potential of alternatives to meet demand
As part of its review, the BCUC was also mandated to analyze the ability of an alternative portfolio of commercially feasible projects and demand-side initiatives to provide similar energy benefits to Site C, including their potential to meet demand and their costs to ratepayers.
The Panel found that not only could an alternative portfolio of conservation, wind energy, and geothermal energy meet demand and provide similar benefits to ratepayers as Site C, but that it could do so with an equal or lower unit energy cost.
In addition to recognizing the current viability of alternative energy in BC, the Panel found that disruptive trends in technology pose one of the most significant risks to continuing with Site C. Evidence from around the world substantiates the Panel’s warning about technological trends. Prices for wind, solar, and
geothermal energy have plummeted year by year. The pace and scope of technological advance have exceeded even the most optimistic predictions.
Instead of locking ourselves into the path of the Site C Dam, we should seize this opportunity to build clean, distributed power that puts us on the cutting edge of innovation, and provides jobs and benefits to local communities.
In addition, though beyond the scope of the BCUC review, it is critically important that government also consider the impacts that this project has on First Nations, particularly in light of our collective commitment to implementing UNDRIP. Government must also consider the project’s impact on the environment of the Peace River valley. Through pursuing an alternative energy portfolio instead of Site C, BC can partner with First Nations, industry and local communities to build clean, distributed power across BC. These alternatives will employ more people than Site C and provide local jobs and benefits to local communities.
In the face of these developments, it would be irresponsible for government to continue down the path of Site C. We do not require Site C to meet our future energy needs – alternative sources of energy are more than able to meet demand, and they will enable us to adapt to changing needs, as they provide flexible sources of energy. In contrast, Site C locks us into an energy future that could impose significant burdens on future ratepayers, and we would be forced to sell any surplus power at a loss.
Laid out in front of this government is a choice. The previous government chose to forgo evidence and due diligence, and pushed forward irresponsibly with a project that it is clear should never have been started. What the BCUC report tells us is that it is not too late to correct this mistake.
However, the choice facing your government is not simply about which option will save ratepayers the most money. It’s a choice about what type of province we want to build. All around the world jurisdictions are embracing a modern, 21st century approach to energy policy. Pursuing this future would see the creation of a distributed, integrated power grid where the economic and employment benefits are shared by communities throughout the province.
Site C puts this future further out of reach, doubling down on the energy projects of the last century and undermining our ability to embrace the future.
We hope, as cabinet considers this decision, that they properly weigh this information contained within the BCUC report. Your government made the right decision in agreeing to commission an independent review before we crossed the point of no return. You need now to be guided by the evidence that this report puts forward.
This government has an opportunity to undo the mistakes of the last administration and chart a new, modern path for energy policy in BC. We hope you will seize this opportunity.
Leader, B.C. Green Party
MLA, Oak Bay-Gordon head
MLA, Cowichan Valley
MLA, Saanich North & the Islands
B.C. Greens make the case for cancelling Site C in open letter to government
For immediate release
December 1, 2017
VICTORIA, B.C. – B.C. Green MLAs Andrew Weaver, Sonia Furstenau and Adam Olsen sent an open letter today to Premier Horgan and Minister of Energy, Mines and Petroleum Resources Michelle Mungall making the case for cancelling Site C.
The B.C. Greens have been opposed to Site C since costs begun to escalate well past its initial budget, while the global cost of alternative energy has continued to fall.
The letter is attached.
Sarah Miller, Acting Press Secretary
+1 778-650-0597 | email@example.com
Today in the legislature I rose in Question Period to ask the Minister of Energy, Mines and Petroleum Resources about the escalating costs of Site C relative to the diminishing costs of renewables.
In the days ahead, the BC cabinet will make a decision on whether or not to proceed with the construction of Site C. It’s critical that cabinet make its decision based on the best available evidence. It’s clear to me that Site C is about to emerge as BC’s very own Muskrat Falls. A public inquiry in Newfoundland and Labrador will begin this January to determine why that hydro megaproject is so many billions of dollars over budget and so far behind schedule. It will also examine why the project was exempt from oversight by the Public Utilities Board much as the Site C project was approved without oversight from the British Columbia Utilities Commission.
Below I reproduce the video and text of the exchange. It is clear to me that the BC Liberals were feeling very uncomfortable with the line of questioning as their heckling was so loud and ongoing that I had to stop several times.
A. Weaver: I see the members on the opposite side here are somewhat troubled about question period and are a little feisty today.
I’d like to take us back, hon. Speaker. I’d like to take us back to the previous decade, when Site C was advanced to stage 3 of the approval process. Its price tag then was somewhere between $5 billion and $6.6 billion. Let’s now fast-forward to 2011. The price tag now was $7.9 billion. Two years later, now in 2013, the price tag was $8.3 billion. Then the price tag grew to $8.9 billion, accompanying a year-long delay in the construction schedule.
Now the B.C. Utilities Commission says this directly: “Given the nature of this type of project and what has occurred to date, total cost for the project may be in excess of $10 billion, and there are significant risks that could lead to further budget overruns.” The cost, they found, could end up being $12 billion — and this only two years into a nine-year project.
Mr. Speaker: Members.
A. Weaver: My question through you, hon. Speaker — if I’m allowed to actually ask it over the heckling from opposite — is this. It’s to the Minister of Energy, Mines and Petroleum Resources. Will the minister stop the Site C project…?
Mr. Speaker: Members.
The question, please.
A. Weaver: I’ll try again.
Will the minister stop Site C before it gets any worse and protect British Columbians from a project that already shows signs of having costs that will spiral completely out of control?
Hon. M. Mungall: Thank you to the member for the question. I find the question very interesting because I think it highlights exactly why this project should have gone to the B.C. Utilities Commission right from the very get-go. The fact that the official opposition, when they were in government, chose not to do that — I’ve said it before, and let me say it again — was the wrong choice.
This government has righted that wrong. We have finally gone to the B.C. Utilities Commission, and we were able to get answers to the questions that British Columbians had, questions that I’m sure that the Leader of the Third Party had as well. This government is taking all of that information into consideration as we deliberate on this very important issue for British Columbians, and we’ll be working and making a decision in the best interests of British Columbians.
A. Weaver: Thank you to the minister for the response. In contrast to the grim picture of ballooning Site C construction costs, let’s now take a look at the renewable energy sector. Wind, solar and geothermal power have become cheaper and scaled up faster than anyone predicted. The cost of wind power has decreased by 90 percent since the 1980s. In the last eight years alone….
A. Weaver: I know that members opposite don’t like to hear data, but if you could let me actually get it through, we’d be actually all benefiting from this.
In the last eight years alone, costs for wind power declined by 66 percent. And the costs are predicted to continue to fall. Bloomberg, for example, predicts that onshore wind costs will fall by 47 percent by 2040 and offshore costs will fall by 71 percent.
Now I get that they’re feisty opposite, hon. Speaker, because they don’t like the real data. They’re just living in an ideological world of mysterious data.
Solar energy tells a similar story.
Mr. Speaker: Member, the question, please.
A. Weaver: Thanks. If I could actually ask the question….
Solar energy tells a similar story. Costs have decreased by 68 percent since 2009, and they’re projected to decrease by a further 27 percent in the next five years. We have a window of opportunity now to harness renewables and build power that puts us on the cutting edge of innovation and provides local jobs and benefits.
Mr. Speaker: Member, the question please.
A. Weaver: My question — if I can get it above this background of raucous Liberal members — to the Minister of Energy, Mines and Petroleum Resources, is this: are you prepared to forgo this generational opportunity to harness renewables by continuing in the B.C. Liberal footsteps with building a doomed megaproject?
Hon. M. Mungall: It’s clear that members opposite sure are feisty today. I’m glad that the member did get his question in.
He will note that part of my mandate letter is to build that road map into the future in terms of B.C.’s energy policy, looking specifically at our opportunities — our tremendous opportunities — at renewables.
But for today, we have to address this issue of Site C. No decision has been made, but we are in the decision-making process, and we take it very seriously. This is a very important decision for British Columbians well into the future, and that’s why we have ensured that we’re doing our due diligence by starting with the B.C. Utilities Commission.
We’re looking at the information that they brought forward as well as the incredible amount of information that has come out over the years about Site C, and we will be making a decision that works for British Columbians today and into future generations.
Yesterday the BC Government issued a press release entitled Province delivers on commitment to freeze BC Hydro rates. The release states:
The British Columbia government is delivering on its promise to freeze BC Hydro rates, putting an end to the years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources Michelle Mungall announced today.
You would be forgiven if you thought that this announcement meant that BC Hydro rates were not going to go up next year. Clearly the CBC , Black Press and numerous other news outlets thought this was the case. So imagine our collective surprise during Budget Estimate debates for the Ministry of Energy, Mines and Petroleum Resources when we found out that in fact this isn’t yet confirmed.
Instead, what the government has done is instruct its Crown Corporation, BC Hydro, to ask the independent British Columbia Utilities Commission (BCUC) to consider overturning its already approved 3 percent rate increase for 2018. It is entirely uncertain whether the BCUC will do this given the autonomy of this organization, the very legitimate concerns about the fiscal sustainability of BC Hydro, the ability for intervenors to provide further information and so forth.
As evident in the discussion below, Tracy Redies (MLA for Surrey Whiterock), Mike Bernier (MLA for Peace River South) and I worked collaboratively to unravel what was really going on. It was a very respectful, yet revealing, debate. In the end, both the BC Liberals and I felt it was important for the Minister to issue a clarification so that British Columbians understand that there is still uncertainty as to whether or not rates will be frozen.
T. Redies: Minister, today you made the announcement that you’ll be freezing B.C. Hydro rates for a period of one year starting April 1, 2018. That was a little surprising because yesterday you had talked about doing a review and trying to find cost savings.
I’m just curious now that you’re forcing B.C. Hydro into this $150 million hole, how is this going to be made up? Are additional capital projects going to be cancelled?
Hon. M. Mungall: We canvassed this issue quite extensively yesterday with B.C. Hydro staff. The announcement made today was actually exactly what I said we would be doing yesterday. So there’s absolutely nothing different from any of our conversation, any of the questions that the member opposite asked.
All the answers would still stay the same because, at the end of the day, I asked if B.C. Hydro staff can go home to Vancouver, or if they were required to stay to answer any further questions. I was told that there wouldn’t be anymore B.C. Hydro questions.
So I don’t have the appropriate people to go deeper if the member is wanting to do that. I’m happy to take any questions in writing and make sure that I get back to her in a timely manner.
That being said, it’s her time, so if she wants to ask questions, she can. But I’ll let her know now that my answers from yesterday would be the exact same today.
T. Redies: Thank you, Minister, for your answer. I’m just very surprised that you have made an announcement. That’s why we’re back today. You’ve made an announcement, or rather, the minister has made an announcement. Pardon me. The minister has made an announcement that is going to affect the company by $150 million.
Would there have been no discussions with B.C. Hydro in terms of how this would be made up? I mean, you wouldn’t just make a decision about $150 million without having some idea of how this was going to be made up. Surely, the minister must know something.
Hon. M. Mungall: As I was saying yesterday, the rate freeze has always been tied to a review of B.C. Hydro. Also, as I said yesterday, the rate freeze will be starting in April 2018. If it goes forward — we hope that it does — the BCUC, ultimately, is going to be looking at this.
What has happened is that we have collaboratively worked with B.C. Hydro. B.C. Hydro is changing its revenue requirement application from the 3 percent rate increase it had in that RRA for April 2018 to zero percent. They’ve amended their RRA that is currently before the B.C. Utilities Commission.
The B.C. Utilities Commission will then do the due diligence that is required and determine whether a zero rate increase is acceptable. Should it be acceptable, then we will move forward with that rate freeze and conduct a review of B.C. Hydro over the course of that year. Because the rate freeze doesn’t come into effect until April 2018, it actually gives us time, by the time all of the accounting is done in that year of review, to look at ways where we can mitigate any impacts of the freeze.
T. Redies: I’m now very confused. The minister and her government just announced today a rate freeze. But I think, based on her answer, she’s saying it may or may not happen because the BCUC might decide it’s not appropriate. Is that correct? Is there a rate freeze or isn’t there?
Hon. M. Mungall: There is going to be an application for a rate freeze before the B.C. Utilities Commission.
T. Redies: So if it wasn’t a done deal, why would the minister and her government go out with a public release today telling the public that there is going to be a rate freeze starting April 1, 2018? That makes no sense.
Hon. M. Mungall: I’m sorry if the member opposite didn’t feel that I was clear yesterday. I felt that I was. I thought that I was very clear that we would always be going forward to the B.C. Utilities Commission in this very fashion. That was part of the news release that we put out, and it’s what I said to reporters just an hour and a half ago. Members opposite, I do believe, had staff people recording that, so they can go back and see that. But that has always been the process that we talked about — yesterday as well as today.
T. Redies: I know what the process is, Minister. I know what the process is. I’m just confused as to why the minister would go out with a public press release announcing this rate freeze, when she didn’t know whether or not it was going to actually happen. Isn’t that a bit misleading for the public?
Hon. M. Mungall: As I said to the member opposite, the process was clear. It is in the news release. I was clear with all of the media about the process — that we’re bringing it to the B.C. Utilities Commission for review.
A. Weaver: With respect to the minister, I’d like to read the formal government press release. It says this:
“The British Columbia government is delivering on its promise to freeze B.C. Hydro rates, putting an end to years of spiralling electricity costs that have made life less affordable for B.C. homeowners and renters, Minister of Energy, Mines and Petroleum Resources announced today.
“B.C. Hydro rates have gone up by more than 24 percent in the last four years, and by more than 70 percent since 2001. The minister says that in 2016, B.C. Hydro applied to the B.C. Utilities Commission for three years of increases, with a 3 percent increase planned next year, but will be pulling back its request, consistent with this administration’s commitment to a rate freeze.
“‘After years of escalating electricity costs, British Columbians deserve a break on their bills,’ said the minister. ‘From the moment we took office, we’ve taken action to make life more affordable. As part of that, we’re going to make sure that B.C. Hydro is working for the benefit of British Columbians and that its rates reflect that commitment.’
“The rate freeze will provide government the time to undertake a comprehensive review of B.C. Hydro. That review will identify changes and cost savings to keep rates low while ensuring B.C. Hydro has the resources it needs to continue to provide clean, safe and reliable electricity. Details of the scope and process for the review will be developed once government has made a final decision.
“After completing a comprehensive review of B.C. Hydro, any cost and revenue adjustments identified will be reflected in the rates starting in April 2019.
“The rate freeze” — again — “follows government’s commitment in its September budget update to phase out the provincial sales rates on electricity.”
It says nothing about approaching BCUC. It’s very clear, and I concur with the member opposite. I feel that this is quite misleading. I would like the minister to please clarify why the press release says, on the one hand, there’s a rate freeze, and now here today we understand that there’s not really a rate freeze but an application for a rate freeze.
Hon. M. Mungall: He read the press release in full, and he also read directly from the paragraph that talks about B.C. Hydro going to the B.C. Utilities Commission and exactly how the full process is taking place, how it’s tied to a review.
I am sorry that he finds it misleading. I personally am curious as to how he does. I mean, it seemed to be really clear to me.
T. Redies: Now that the minister has gone out with this press release, what does she plan to tell British Columbians if BCUC comes back and says: “No, you can’t have a zero percent rate increase”?
Hon. M. Mungall: That’s a fair question, absolutely, and we’ll cross that bridge when we come to it. We have to go through the B.C. Utilities Commission first. We value the input that the BCUC has in our rate-setting process. We value the input that they have overall in managing our public utility from an independent, expert body looking out for the interests of the public. So we feel that the appropriate process, as defined in legislation and regulation, is to go through the B.C. Utilities Commission first and foremost. We will see what their decision is.
T. Redies: We are not quibbling about the process with BCUC. This is a process that B.C. Hydro has undertaken pretty much every year. They have a regular dialogue with BCUC, and if there are going to be rate increases — I guess now zero increases — they have to get BCUC’s permission. What we’re questioning is why the minister would go out with an announcement that signals, I think, to the public very clearly that they are responding to their prompt campaign promise and they are delivering on a rate freeze when she doesn’t have any degree of certainty that she’ll actually be able to deliver on that.
Hon. M. Mungall: I think that it’s appropriate to bring the public along with government as we take action on a number of items. I think that it’s appropriate to let the public know that we’re taking action on this item that was very important to them.
It was clear on the doorsteps I knocked on and, I’m sure, on the doorsteps the member opposite knocked on — and on any doorsteps in this province — that people are concerned about affordability. Every dollar counts when we’re dealing with an affordability crisis. So we committed to freezing hydro rates as part of our larger package in dealing with affordability. I think it’s appropriate to then tell the public what we’re doing to meet that commitment and be upfront about it, and that’s what we’re doing.
M. Bernier: Just trying to understand and clarify this, then. The minister made an announcement earlier, saying that they’re saving $150 million of taxpayers’ money through the rate freeze. She’s also on record saying that she respects the autonomy of the Utilities Commission. But by this announcement, she’s also admitting, it sounds like, that she’s prejudging the outcome now of that same group of which she says she respects their autonomy.
Can the minister explain to not only this House but to the people in British Columbia, because now we’re really confused: are they saving $150 million right now? Or are they, as she says, just putting the application forward and having to wait now to see what the Utilities Commission is actually going to say and whether they’ll approve that application?
Hon. M. Mungall: So I just want to be very clear for the record that I’m not prejudging, and nobody in this government is prejudging, the outcome at the B.C. Utilities Commission.
What we are doing is the appropriate process, and we are being upfront and honest with the public. I think that is the right thing to do. I think we all in this government think it’s the right thing to do. And so that is what we’re doing.
M. Bernier: So can the minister then clear the air, in the sense of letting the public know and letting this House know: was it an accurate comment for her to make, then, that says that the taxpayers are now saving $150 million? Or is it more of a fair comment to say they’re waiting to see if the Utilities Commission approves their application? At which point, if approved, they might be saving money.
Hon. M. Mungall: Just to clarify. I’m sure the member meant this, but just in case, and for the people who might be watching at home, the savings of $150 million would be felt by ratepayers, not taxpayers. I’m sure the member knows that difference, but I just want to clarify for anybody who might be watching.
Again, I think what is important to note here and what I’ll be sharing — and it sounds like it might be over and over and over again — is that we made a commitment during the election to make life more affordable for British Columbians. We are living up to that commitment.
One of the ways that we said we would do that is to freeze hydro rates. There is a process to go through to get to that place, and we’re following that process, and we’re being upfront and honest with the public about what that process is. We intend to live up to our commitment, absolutely, but we’re going to follow the process to do that.
M. Bernier: So just to the minister, I’m well aware of the process. I managed a utility company — was part of that for 22 years. I worked with the Utilities Commission through rate applications for that entire time, so I’m well aware of it. And every single time, we were always told that we had to wait, because sometimes on a Utilities Commission application, there are opportunities for intervenors, there are opportunities for discussion, there are opportunities on a wide gamut of things.
And you could never prejudge what the Utilities Commission would say. It’s an independent body that’s actually directed to be independent to look out for the ratepayers of British Columbia — as we canvassed yesterday and the minister was quite open on, when we talked about Site C and the role of the Utilities Commission then.
So, again, I’m just trying to understand, because…. The minister is publicly saying that the taxpayers, to make life more affordable, are going to be saving $150 million, but I have yet to hear the commitment. Is she actually directing the Utilities Commission to accept this application? Is the Utilities Commission being told, then, by government that they have to actually put this rate freeze in and accept that?
Hon. M. Mungall: As I’ve said earlier, there’s been no direction to the B.C. Utilities Commission, and should they disagree with the rate freeze, we’ll deal with that when the time comes.
M. Bernier: Is the minister willing to retract her press release and the comments then, because her government has come out and announced that the taxpayers of B.C. are saving $150 million? I think it’s fair now to say, from the line of questioning here and the answers, that they’re actually not. It’s still a maybe.
I know that her government has made promises. I know that her government and the ministry have made commitments. I’m not trying to take away from that. What I’m trying to ascertain is whether those commitments are actually still a pie in the sky. Are they happening? Are we waiting for reviews? Or is she actually telling BCUC what to do?
It sounds like the minister is not directing the Utilities Commission to accept this application. So in essence, is the minister willing to retract the press release and say that in essence, again, the people of British Columbia aren’t necessarily going to be saving $150 million yet?
Hon. M. Mungall: We’re going to have to agree to disagree here. I feel very, very solidly that our press release, everything I’ve said to media and everything I’ve said in this House has been consistent. There is no inconsistency from my perspective. I feel that we’ve been upfront. We’re being transparent. The members opposite may disagree. I’m not really surprised by that. I mean, they’re the opposition, and that’s their job. But we’re going to have to agree to disagree here.
A. Weaver: Before I ask the questions, I’d like to seek leave to make a brief introduction.
Introductions by Members
A. Weaver: I’d like welcome a group from Vancouver Montessori School here, who are accompanied by their teacher, I understand: Mr. Michael Lee from Vancouver. I just saw them come in the audience, and I thought we’d introduce them and give them a little idea that what we’re debating here is the budget estimates for the Ministry of Energy, Mine and Petroleum Resources. The Liberal members opposite with the Green Party members are debating with government on this particular topic. With that, I welcome you, and I’m sure the rest of my colleagues here would welcome you as well.
A. Weaver: I’m really troubled by the line of questioning here, and I’m really troubled by what’s being revealed. I have read that press release carefully. It is very clear from that press release that the government is telling British Columbians that they are going to freeze Hydro rates by April 2018. That’s the only message that you can take from this press release. It’s the only message that we took from our no-surprises, good-faith confidence and supply agreement discussions about this issue here.
This is a surprise that we are not actually freezing rates, but we’re going to the BCUC to ask them whether they will give us permission to freeze rates. But we’re not going to influence them on the one hand, because we respect the independence of the BCUC. But on the other hand, we’re saying that we’re saving $150 million. You can’t have it both ways.
So I would like to reiterate the concerns expressed by the member for Surrey–White Rock and the member from Peace River South and suggest that in emphatic terms that I believe that the minister owes British Columbians a formal correction in a press release. I will ask: will she be willing to do that in response to the line of questioning that we have seen here today?
Hon. M. Mungall: I guess, also, the Leader of the Third Party and myself and our government are going to maybe have to agree to disagree in terms of the wording of the press release. I feel it’s very clear. He did read it out. I don’t know what is unclear about that, but I think we’re just going to have to agree to disagree on this.
A. Weaver: The press release should have said this, “B.C. government will seek the ability from BCUC to freeze rates,” not “B.C. government will freeze rates.” But they said, “B.C. government will freeze rates,” and that’s simply not correct. There’s no other interpretation here.
You know, sometimes it’s okay to admit that you’ve made an error, but it is not okay to double down in defence of something that is clearly wrong. Again, to the minister: will she correct this publicly? Because it is misleading, and people across British Columbia think that their rates are going to freeze in April 2018, when they’re not. They’re not going to freeze unless the BCUC says they will.
Hon. M. Mungall: We’ve been canvassing this issue for just over 45 minutes now. I haven’t offered any new information or anything different, and I think we’ve come to the conclusion that this government and members opposite are just going to have to agree to disagree in terms of the wording of a press release.
Today in the Legislature I rose in Question Period to question the Minister of Energy Mines and Petroleum Resources about the need for Site C in light of a nonexistent LNG industry. I further questioned whether or not she would defend the interests of British Columbians and ensure a fair price for our natural gas assets by evoking a cancellation provision with the Progress Energy royalty agreement (as Petronas has not made a positive final investment decision).
In addition, in April, 2015 when Bill 23, The Miscellaneous Statutes Amendment Act was introduced by the BC Liberals, the BC NDP and I spoke out about profoundly troubling changes to the way Royalty Agreements are managed under the Petroleum and Natural Gas Act. Under these changes, the Minister was granted the power to enter into secret agreements with oil and gas companies without the approval of Cabinet. I felt it was important important to see whether the Minister would agree to not undertake such agreements.
Below I reproduce the video and text of the exchange as well as a copy of our accompanying press release.
A. Weaver: I think I’m living in some kind of a fantasy world here in question period today. It’s quite remarkable.
To entice LNG projects to British Columbia in 2014, the previous government promised proponents electricity rates of 8.3 cents per kilowatt hour, but that wasn’t good enough. So two years later, they dropped the rate to 5.4 cents per kilowatt hour.
Now, we know the actual cost of power from Site C, if the government continues with this project. It will be over ten cents a kilowatt hour, while residential customers today are paying 8.6 cents at tier 1 and 12.9 cents per kilowatt hour at tier 2.
Not only are residential customers paying nearly twice what hypothetical LNG companies would pay, they’re also financing Site C to provide electricity to a nonexistent industry through a business model that will lose about five cents for every kilowatt hour of energy produced. That’s B.C. Liberal economics for you. Fortunately, for the members of that party, they have one leadership candidate who hasn’t run on their abysmal economic record.
My question to the Minister of Energy, Mines…
Mr. Speaker: Members, we shall hear the question, please.
A. Weaver: My question to the Minister of Energy Mines and Petroleum Resources is this. Will government admit that the only reason to continue with the construction of Site C is to provide ratepayer-subsidized power to a nonexistent LNG industry?
Hon. M. Mungall: Thank you to the member for the question. He is aware of the process that is undergoing right now. We’ve just completed the B.C. Utilities Commission review of Site C. That report was delivered just a week ago, and this government has announced that we are now moving into our analysis, and then we’ll be doing proper deliberations.
Next week myself and the Minister of Indigenous Relations and Reconciliation are actually going to be formally consulting with Indigenous communities and First Nations leaders who are directly impacted by Site C. Saying anything at present about future decision-making would likely prejudge that, and I’m just not going to be doing that.
A. Weaver: The previous government did everything industry asked them to make their LNG dreams a reality. “Jump.” “How high? How often? Where to? How many times?” They wanted to deliver unicorns to each and every one of our backyards, and when they couldn’t squeeze water from a stone, they tried desperately to squeeze even harder.
They even changed the natural gas royalty legislation so that the minister could negotiate sweetheart deals in secret. They signed a deal with Progress Energy.
Mr. Speaker: Members.
A. Weaver: They signed a deal with Progress Energy and its partners that would have locked in low royalty rates for years and cost B.C. millions. But that contract had an escape valve. One of its conditions was a positive final investment on Pacific Northwest LNG by June of 2017. Yet Petronas decided to kill the project.
My question to the Minister of Energy Mines and Petroleum Resources is this. When will the government stand up for the people of B.C., demand a fair price for our natural gas assets and terminate the long-term royalty agreement with Progress Energy? And will the minister confirm, for the record, that this government will not negotiate royalty agreements in secret with any other gas companies?
Hon. M. Mungall: I think there’s no doubt that anybody on this side of the House would agree with the member that the previous government made large promises and absolutely failed to deliver on those promises. I think we’ve canvassed a few of those: the jobs with LNG, the LNG prosperity fund, the “Debt-free B.C.” Families first, as well.
That being said, moving forward, we have committed to work with industry but also to make sure that our regulatory oversight bodies are doing their due diligence, as well, and that they have the resources to do so. On this side of the House, we want to make sure that government is working for all British Columbians and that we’re all together building a better B.C.
November 8, 2017
For immediate release
Site C, Hydro finances demonstrate need to reverse trend of failed Liberal economic management: Weaver
VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, is calling for an overhaul of BC’s approach to the energy file. Weaver says that the politicization of energy has got in the way of sound fiscal management and evidence-based policies that would protect ratepayers and allow BC to become a leader in alternative energy.
“Energy has been treated like a political tool in this province, depriving British Columbians of the leadership and sound fiscal management they deserve from their government,” said Weaver.
“Today, the NDP announced that they are freezing Hydro rates. B.C. Hydro is in a dire financial position due to the utter failure of the B.C. Liberals to responsibly manage our finances. They raided B.C. Hydro of more than half a billion dollars in dividends last year alone. ICBC is facing a similar financial mess for the same reason.
“Since the Liberals used LNG as a Hail Mary pass to clinch the 2013 election, they have been hell-bent on developing an industry that was never going to materialize. Due to Liberal enticements to LNG companies, British Columbians pay nearly twice as much as hypothetical LNG companies for their Hydro.
“Site C is yet another piece of this disturbing puzzle – it is billions of dollars over budget and was pushed through without proper oversight by BCUC to satisfy the LNG pipedream. BCUC, an independent body whose purpose is to protect ratepayers, was blocked from doing its job because of the Liberals’ blind pursuit to get to yes at any cost.
“The NDP is at a crossroads. They can continue down this path of reckless Liberal fiscal management, or they can keep their promise to be better. While I’m glad they’re reviewing BC Hydro, there are concrete steps they can take to reverse the trend of energy policy being used as a political tool. They can and should cancel the Long Term Royalty Agreement with Progress Energy, who, by the way, is responsible for the two largest unregulated dams in North Eastern BC. They can, and should stop the pilfering of BC Hydro by requiring dividends that, if not stopped, will amount to $2.8 billion by 2020.
“We cannot keep making political decisions while saddling future generations with debt. If the NDP truly want to make life more affordable, freezing hydro rates without developing an energy strategy – which will simply saddle our children with these costs – is not the solution. We have a generational opportunity to use this minority government to chart a new path for BC, one that takes us away from the BC Liberals fiscal mismanagement. It will require us to think big and to take bold action, but that is exactly what British Columbians deserve from their leaders.”
Jillian Oliver, Press Secretary
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