Correct option is C
The phrase "already reached" is incorrect because the past perfect tense should be used to indicate that the action was completed before another past action.
The correct sentence should be: "By the time the news crew arrived, the storm had already reached its peak intensity."
Rule: Use the past perfect tense (had + past participle) to describe an action that was completed before another action in the past. Here, "had reached" is the correct form.