Wall and his buddies made out just fine. It will be those who least benefitted from the boom who will now going to be forced to pay the consequences of the SK Party's scandal, mismanagement, and waste.
More and more, Wall is showing just how arrogant and out of touch he is with the average Saskatchewan person.
Julie Ali It does seem like Mr. Brad Wall is not a good manager of public funds specifically in the case of the CCS project that was not mentioned in the list of problems you have noted. https://www.saskwind.ca/blog.../2016/11/3/audit-boundary-ccs Audit request re Boundary Dam Carbon Capture Scheme
In the twenty months since we produced our detailed financial analysis of the Boundary Dam Carbon Capture Scheme (BD3CCS) the Federal Parliamentary Budget Office (PBO) produced their own report. It confirmed our conclusion: Carbon Capture at Boundary Dam doubles the price of electricity. In so doing, the PBO report again raised the question of why SaskPower proceeded with a project when it knew, or should have known, that it would needlessly add $1-billion of costs to the bills of electricity consumers province-wide.
Despite all this evidence and perhaps because the sole beneficiary of the project is an Alberta-based oil company which was the largest donor to the SaskParty in 2013 and 2014, SaskPower has refused to provide any form of financial accounting to justify the project. This is particularly troubling since Premier Wall recently appealed for $2-billion of federal funds to invest in more Carbon Capture projects (as well as nuclear). We are also concerned that, while public funds continue to be used to subsidise coal, wind energy will be disadvantaged in forthcoming tenders for new generation capacity.
Consequently today we wrote to the Provincial Auditor to request a full audit of BD3CCS.
Our letter to the Auditor
Alternatively the full text (with references where applicable) follows;
Ms. Judy Ferguson
Provincial Auditor of Saskatchewan
1500 Chateau Tower, 1920 Broad Street
Regina, SK. S4P 3V2 3 November 2016
Dear Ms. Ferguson,
Boundary Dam Carbon Capture and Storage Facility
We contact your office in its capacity as provider of independent assurance and advice on the management, governance and effective use of public resources. Our concern relates to the $1.5-billion Boundary Dam Carbon Capture and Sequestration facility (BD3CCS), which was commissioned in October 2014 and financed entirely using public funds.
Given the sizeable quantity of those funds, the questionable economic merits of the project and the availability of significantly cheaper alternatives; one might reasonably have expected SaskPower to have released financial information in justification of the project. That information was, however, not forthcoming when the project was commissioned and was still not available six months later. Consequently, in March 2015, we released our own analysis .
Although BD3CCS was billed as an environmental initiative, that analysis indicates its primary purpose is to supply publicly-subsidised CO2, at well below cost, to the oil industry for use in Enhanced Oil Recovery. We believe it will result in at least $1-billion of losses for SaskPower: those losses can only be recovered through increased electricity rates. Indeed, since January 2013, SaskPower has announced six separate electricity rate rises amounting to a compounded increase of 28.2% .
While BD3CCS leaves SaskPower (i.e. all electricity consumers of Saskatchewan) with major losses, it appears to generate $1-billion of profits for Cenovus Energy: an Alberta-based oil company which also happens to have been the largest corporate donor to the SaskParty in 2013 and 2014 and the second largest in 2012.
In April of this year the Parliamentary Budget Office concluded that BD3CCS doubles the cost of electricity and, in so doing, they largely confirmed our conclusions. Nonetheless; SaskPower and the SaskParty have, to date, been dismissive of our analysis but unwilling to justify BD3CCS with their own.
Yesterday, however, the following was in the National Post;
“SaskPower won’t recover its $1.5 billion investment. Over the next 30 years it will run up additional operating losses totaling $651 million, according to a report by Saskatchewan Community Wind.
SaskPower doesn’t dispute the numbers but says there’s a cost for pioneers”
— The National Post. 'Take into account captured carbon’s use and Saskatchewan coal plant just as dirty as others, critic says'. By - Evan Balgord. 2 November 2016
It is concerning that SaskPower, notwithstanding its own admission of the questionable economics of CCS and the presence of significantly cheaper alternatives, is still considering two additional Boundary Dam CCS units at a cost of at least $2-billion. Also rather puzzling, given the weak economics of CCS, is Premier Wall’s request, two weeks ago in his ‘Climate White Paper’, for $2-billion+ of federal funds for additional research into CCS and nuclear.
Noticeably absent in all of this is a transparent financial accounting of BD3CCS: something which SaskPower has thus far been unwilling to provide. Surely this is owed to the population of Saskatchewan given the $1.5-billion of public funds involved. We believe there are six key questions which would benefit from your attention;
1) Did SaskPower’s investment represent efficient operation of the corporation’s business for the public good ?
2) Were risks and rewards allocated in a manner consistent with SaskPower’s fiduciary duty to safeguard public funds?
3) Did Crown Investments Corporation exercise its supervisory powers in the interests of all Saskatchewan residents ?
4) Given its knowledge of the influence of BD3CCS costs in SaskPower’s October 2013 multi-year rate application; was the Saskatchewan Rate Review Panel justified in its conclusion that the application was fair and reasonable for the people of Saskatchewan?
5) Would SaskPower’s planned investment in two additional CCS units at Boundary Dam be an efficient use of public funds given the known cost of alternatives?
6) Does the Province of Saskatchewan own the intellectual property associated with Carbon Capture technology and, if not, how will international sales of CCS technology benefit Saskatchewan ratepayers?
While your office may have reservations about questioning this Government’s energy policy; it may be of note that the Ontario Auditor appears to have no such qualms. It has, in the last five years, conducted at least three major reviews on the subject: a 2011 audit of the Green Energy Act as well as two in 2013 of the Oakville and Mississauga Gas Plant cancellation costs. The Auditor, in undertaking the 2011 review, noted: "The objective of our audit was to assess whether the Ministry of Energy and the Ontario Power Authority had adequate systems and procedures in place to ensure that renewable energy resources are obtained in a cost-effective manner and within the context of applicable legislation and government policy."
We look forward to your answer to these questions and to your view on whether low-carbon energy resources were, and are, being obtained by SaskPower in a cost-effective manner within the context of applicable legislation and government policy.
James Glennie. MBA, CFA