FORT ST. JOHN, B.C. -- British Columbia's groundbreaking Clean Energy Act has limited the options available to the province's Crown utility corporation for expanding the power grid, the chairman of an environmental review panel pointed out as critics demanded answers about the utility's plans to build a third hydroelectric dam on the Peace River.

One after another, opponents of the Site C proposal have questioned the corporation's choice to pursue the dam in northeastern B.C.

But Harry Swain, chairman of the three-member panel of the Canadian Environmental Assessment Agency conducting the joint federal and provincial review, said BC Hydro's options may not be as plentiful as believed.

"I understand the point that was made by an earlier intervener to the effect that you may have a lot of choices," Swain said on Day One of the hearings in Fort St. John.

"But it seems to me that your choices have been substantially narrowed by public policy in the province, by the Clean Energy Act and so on."

The first two days of hearings are exploring the need for the $7.9-billion dam and the alternatives explored by BC Hydro.

The panel has heard interveners from First Nations and environmental groups suggest geothermal or natural-gas generated power are cheaper and more reasonable options than the dam that will flood an 83-kilometre stretch of the Peace River valley from Fort St. John to Hudson's Hope. It would also flood 10 kilometres at the mouth of the Moberly River and 14 kilometres of the Halfway River. Both feed into the Peace River.

The Crown utility estimated that 30 homes would be under water.

The dam would provide enough power for the equivalent of 450,000 homes and is the centrepiece of BC Hydro's plans for meeting electricity needs over the next 20 years, during which the Crown utility anticipates a 40 per cent increase in demand.

Susan Yurkovich, BC Hydro's senior vice-president, said that like any large infrastructure project, there would be effects from the dam that could not be mitigated, but the corporation believes the benefits outweigh those effects.

"The decision to advance the project to this stage has not been made lightly," Yurkovich told the panel on Day One. "It has resulted from careful consideration of the future electricity needs of our customers, following many years of review and analysis."

The power generated by Site C would be "clean, renewable" electricity, she said, but the David Suzuki Foundation cast doubt on that claim.

The environmental group said in a news release that the project impact should not be weighed in isolation in a region already facing the impact of intense logging, mining, and oil and gas development on a scale "unprecedented in Canada."

Satellite images show 67 per cent of the Peace region of B.C. has been disturbed by human land use.

"We are concerned that Site C, if built, will further degrade this sensitive area of productive farmland and wildlife habitat," the group said.

The foundation, which supports hydroelectricity as a source of renewable energy, urged the province to abandon plans for Site C, and expand recovery efforts for threatened and endangered species in the region instead.

In a report released Monday, the group suggested a tribal park for the area where the dam would be built, and asked the provincial government to ensure that industrial development in the Peace region be weighed for their cumulative impact with other existing activities.