In the last two years we have, on two separate occasions, asked the Saskatchewan auditor to undertake an independent financial audit of SaskPower's $1.5-billion Carbon Capture experiment at Boundary Dam (BD3CCS).
Since both requests were subsequently refused without justification, and following Premier Wall's October appeal for $2.65-billion of additional federal funds to help pay for more carbon capture schemes, this week we turned to the Auditor General of Canada and asked his office to undertake an independent financial review.
It has now been almost exactly two years (26 March 2015) since we produced our comprehensive 100-page financial analysis of the $1.5-billion BD3CCS. Our extensively-referenced report demonstrates that the money invested into this research project was spent without due regard to economy or efficiency and for purposes other than those for which it was appropriated by Parliament.
Our report also shows that the carbon capture experiment was $1-billion more expensive than the next available power generation option, that it therefore added $1-billion of unnecessary costs to the electricity bills of Saskatchewan ratepayers and that it contributed significantly to the 28 percent increase in electricity prices announced by SaskPower since January 2013. The project's demonstrably poor economics also caused us to question whether Crown Investments Corporation and the Saskatchewan Rate Review Panel, acted in accordance with their statutory duties when they originally approved the $1.5-billion expenditure.
Given all of this information, we struggle to understand why the Saskatchewan auditor - whose purpose is "to provide independent assurance and advice on the management, governance and effective use of public resources" - is unwilling to investigate our legitimate concerns or to explain why she will not do so.
Some have argued that, since the $1.5-billion has already been spent, there is little an audit can achieve.
However the reality is an audit will reveal whether additional CCS investments are justified. An answer to this question is important since SaskPower currently intends to pursue two further carbon capture schemes at Boundary Dam in addition to which Premier Wall has asked for $2.65-billion of federal funds to help pay for those projects. Additional public subsidies for CCS will not only increase prices for electricity users across Saskatchewan, they will also make coal-fired generation seem artificially cheap and so will displace economically (and environmentally) superior options such as wind energy, natural gas, energy efficiency and solar power.
Neither the general public nor decision makers in Regina and Ottawa, will be able to decide on the merits of putting more public money into additional carbon capture schemes unless there is clarity over the economics of BD3CCS. It is with the express intent of securing this financial clarity that we wrote to the Auditor General.
Letter to the Auditor General of Canada (20-Mar-2017)
Follow-up letter to the Saskatchewan Auditor (copied to the Minister of SaskPower) (23-Mar-2017)