Opposition says 'business case' for Sask. carbon capture plant waning

The Opposition NDP is raising more concerns about the business case for the government's carbon capture facility in Estevan, Sask.

It says a renegotiation of SaskPower's contract with energy company Cenovusto buy the CO2 emissions from Boundary Dam Unit 3is making it less likely that the plant will bring in the revenues it had expected.

"Originally the deal with Cenovus was that they would have to take a million tonnes per year but because we didn't start up when we were supposed to, Cenovus managed to renegotiate the contract and now they don't have to take up to a million tonnes per year. And therefore they're not," said the NDP's Cathy Sproule.

At approximately $25 per tonne, the revenue from the deal with Cenovus would have brought in $25million peryear to SaskPower.

Sproule notedthe contractual obligation to take a million tonnes of carbon dioxide was touted as one of the reasons that company got the contractover another company unwilling to promise to take it all.

"That was one of the main features of choosing Cenovus," Sproule said, suggesting "Cenovus is coming out smelling like a rose."

The contract was renegotiated to avoid a penalty of $91.2 million when SaskPower did not have its carbon capture project operating on schedule.

Mike Marsh, SaskPower's president, said he had nothing to do with negotiating that penalty on what he has repeatedly described as a one-of-a-kind project which might well be expected to face startup delays.

"That's a very good question," Marsh told reporters who asked why the penalty was so high."I'm not sure why that was agreed to in the first instance, but it was, and I wasn't part of that agreement but that's behind us now."

When pressed, Marsh continued to say the issue was behind SaskPower.

"$91 million is a lot of money, there's no question. We did not pay $91 million, OK? It's behind us," Marsh said. "It was negotiated in and we negotiated it out, OK? So there was not a nickel paid. It's behind us."

However, Marsh did say the carbon capture facility is not operating at its full potentialbecause it does not have a buyer for all of the carbon dioxide it is able to produce.

He would not say exactly what the new contract requires for Cenovus to purchase, but he saidit is more than 50 per cent of the plant's potential output.