Hiccups costing SaskPower's Boundary Dam facility millions

Some unexpected hiccups in the past couple years have the Boundary Dam carbon capture project losing a lot of money.

In the year ending March 31, 2016, the project’s budget for amine had tripled.

Amine is an essential part of the process, used to clean carbon dioxide from exhaust.

SaskPower’s CEO, Mike Marsh, said they expect degradation, but not this much.

“We continue to work on finding the engineering solution. In the meantime, we are spending additional money to clean up and to replace aiming at a higher rate than was expected,” said Marsh in a meeting of the Crown and Central Agencies Committee on Tuesday.

They don’t know why the degradation is higher than normal.

The original budget for amine in 2015-2016 was $5.6 million, but Marsh said they ended up spending $18.5 million. He expected around $20 million would be spent for amine in the 2016-2017 year.

On Wednesday, Marsh said their teams are optimistic they’ll resolve the amine issue.

PENALTIES

The carbon capture project has also had to shell out money this year for not being able to deliver on CO2 promises.

The project has a deal with Cenovus Energy to provide CO2, however if it cannot deliver the agreed upon amount, SaskPower pays a penalty.

In the first seven months of the 2016-2017 fiscal year, ending Oct. 31, the project had to pay $1.2 million.

“In some months when the plant is down due to maintenance, planned or otherwise, we won’t be able to meet our contracted volumes, and as a result there could be a penalty,” explained Sandeep Kalra, vice-president at SaskPower and finance and chief financial officer.

In the same time, the project also made $10.9 million from Cenovus in CO2 sales.

In 2015, the Boundary Dam project paid $12 million in penalties. While $7.1 million were paid in penalties in 2014.