Site C Clean Energy Project Technical Briefing: Press Gallery June 7, 2017
Topics • Summary of key questions • Highway 29 realignment at Cache Creek • River diversion • Cost of delaying Cache Creek activities • Additional 2017 activities and procurements • Construction and project status
• Impacts of project cancellation
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Summary of key questions • What is the impact of granting a further extension on the timeline so that impacted families can stay in their homes, in the current location, until the future of Site C is firmly determined? • Would upcoming procurement contracts contain penalty-free cancellation clauses? • What is the impact of going “tools down” on decisions that are essential to maintaining the budget and construction schedule? (e.g. for 3 months)
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Discussions on relocation of homes • In 2016, BC Hydro acquired land and rights from eight property owners in the Cache Creek/Bear Flat area, including the Boons and Meeks.
• We have worked with all the affected property owners to minimize impacts as much as possible. • Short-term delays to issuing tenders for highway realignment and bridge construction enabled the extension of our lease agreement with Mr. and Mrs. Boon, from May 31 to end of June. • The Boons have indicated they intend to move into a vacant guesthouse on their property. We have offered to move their current home to a new location.
• Through our discussions with the Meeks, who are leasing their home to tenants, we came to agreement to move the house. 6
Highway realignment and river diversion • Starting in September 2019, the Peace River will be diverted through tunnels at the dam site, which may cause flooding in the Cache Creek/Bear Flat area. • To ensure highway realignment at Cache Creek/Bear Flat can be completed in time for river diversion in 2019, construction must start in summer 2017. • Diverting the river before completing highway realignment is not possible due to significant public safety risks. • River diversion must occur in September 2019 when the river is at its lowest point. • As a result, if the highway realignment is not started by this September, a yearlong delay would occur as river diversion would be delayed until September 2020. 7
River diversion starts September 2019
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BC Hydro system load
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Cost of one-year delay Estimated costs Direct Costs Ongoing project costs, incurred during delay period Site and environmental maintenance for one-year period Main civil works – overhead, demobilization, mobilization Turbines and generators – storage Worker accommodation, fixed costs Other impacts (e.g. claims, procurement impacts, etc.) Total estimated direct costs
$ Millions 95 10 120 25 15 60 325
Inflation (one-year delay on expenditures)
105
Interest During Construction
200
TOTAL ESTIMATED COST OF DELAY
630
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Additional 2017 project activities • Realignment of Highway 29 at Cache Creek • Advance main civil works • Starting roller-compacted-concrete powerhouse buttress • Turbines and generators contractor now on site, building manufacturing facility • Clearing work for transmission corridor • Transmission works to start in 2017
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Status of construction contracts Procurement approach designed to achieve value for money to ratepayers Contracts awarded:
• • • • • • • • • •
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North and south bank clearing North and south bank site preparation Moberly River basin reservoir clearing Temporary Peace River construction bridge Moberly River construction bridge Public road upgrades in vicinity of dam site Worker accommodation lodge Main civil works Turbines and generators Transmission line towers
Status of construction contracts Procurement approach designed to achieve value for money to ratepayers Procurements underway (to be awarded late 2017/early 2018):
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Generating station and spillways o Civil works o Hydro-mechanical
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Upcoming Procurements:
• • • •
Powerhouse Cranes Substation Transmission Line Construction Highway 29 realignment at Cache Creek o Paving and grading o Bridge
Contract cancellation terms • Contracts contain clauses designed to keep contractors whole for costs incurred. • For example, main civil works contract states that, in the event of contract termination, contractor is paid for: o All work performed to date o Any third-party cancellation charges o Demobilization costs
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Construction progress
$1.75
billion
spent as of May 31 , 2017
$4
billion
spent and committed (signed contracts & agreements)
Summary: •
Site C is two years into an eight-year construction schedule. It is on budget and on track for in-service date of 2024.
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Completed site preparation activities in fall 2016.
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Closed four major contracts (over $50 million): o o o o
North bank site preparation: $60 million 1,600-person worker lodge: $470 million Main civil works: $1.75 billion Turbines and generators: $470 million
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Advancing main civil works and commenced turbines and generators.
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Generating station and spillways civil works contract award in late 2017/early 2018.
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Highway realignment tenders planned for June and July 2017.
Full project cancellation Cancellation costs would include spent amounts, contract terminations, demobilization, site reclamation, replacement energy supply Cost impacts •
Spent $1.75 billion, as of May 31, 2017; average monthly expenditures of approximately
$60 million. •
Contracts would require termination; reasonable costs incurred to date to undertake work.
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Demobilization and site reclamation costs.
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Costs to acquire energy and energy storage to replace supply from Site C.
Additional impacts •
Community agreements (Fort St. John, Chetwynd, Hudson’s Hope and Taylor).
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First Nations agreements (six in total).
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