Site C continues to roll toward reality, but BC Hydro’s business numbers continue to support what opponents of a third dam on the Peace River want: a delay or outright cancellation of the $9 billion project.
In its most recent annual report, the Crown power corporation lists several highlights, including revenue of $5.7 billion compared with $5.4 billion in fiscal 2014 and net income of $581 million, an increase of $32 million over 2014.
But Hydro’s predicted 40% increase in electricity demand in the province over the next 20 years, a key justification for Site C, needs recalculating, especially in the wake of Paper Excellence’s recent shutdown of paper production at Howe Sound Pulp and Paper.
Newsprint mills are major domestic industrial customers for Hydro, and the global pulp and paper industry’s rapidly changing business fundamentals foreshadow more hard times ahead.
Prior to its permanent closure in 2010, Catalyst Paper’s Elk Falls mill near Campbell River was one of Hydro’s biggest customers.
Numbers in Hydro’s 2015 fiscal report show stagnant electricity demand from large industrial customers in the province over the past decade. Sales in that category have slipped 15% to 14.02 terawatt hours (TW/h) in fiscal 2015 from 16.4 TW/h in fiscal 2006.
Price competitiveness of B.C. hydro power in the United States is also being undermined by an abundance of electricity generated from cheap natural gas in North America.
Numbers in Hydro financials show electricity exports south of the border in 2015 dropped to 21.9 TW/h from 30.8 TW/h in 2013. That’s also lower than fiscal 2006’s 29.9 TW/h.
One of Site C’s key benefits would be the significant capacity it would add to the province’s power grid, but flat domestic power demand and an increasingly efficient deregulated North American energy market continue to raise the question of whether now is the right time to make the multibillion-dollar taxpayer investment in that capacity.