To keep up with increasing demand, SaskPower is planning to invest $1 billion a year in capital projects, according to the Crown corporation’s latest report.
On Thursday, SaskPower’s annual report for 2015-16 was tabled at the Saskatchewan Legislative Assembly clerk’s office.
SaskPower’s operating income for 2015, according to the report, was $124 million. However, the Crown corporation’s net income came in at $26 million, due to non-cash losses of $98 million. In 2014, SaskPower had an operating revenue of $43 million and a net income of $60 million.
The losses were largely the result of outstanding natural gas contracts.
In 2015, SaskPower paid $7.3 million dollars in penalties to Cenovus Energy after the plant failed to deliver all the captured carbon dioxide it had promised in a contract with Cenovus.
READ MORE: Carbon for sale as SaskPower’s deal with Cenovus changes
The report also said SaskPower will invest about $1 billion a year on capital projects to renew and maintain aging facilities, lines and poles, as well as necessary infrastructure.
Get daily National news
“We continue to operate in an environment where we need to balance the renewal of our aging electrical system while meeting customers’ growing demand for power,” SaskPower president and CEO Mike Marsh said in a statement.
In the past five years, SaskPower has spent over $6 billion on capital investments and power purchase agreements.
Future projects include a $260 million Pasqua to Swift Current transmission line, to be completed in 2019, a $113 million Kennedy to Tantallon transmission line to be completed in 2017 and a Regina to Pasqua transmission line at $100 million. The completion date for that project has not been determined.
SaskPower will also spend $630 million for the proposed Tazi Twi Hydroelectric Station, which is set to be finished in 2020.
The proposed water diversion hydroelectric project will supply 50 megawatts to the provincial power grid and be located on reserve land designated by the Black Lake First Nation.
Also in the report, the corporation outlined how it reduced its operation, maintenance and administration spending by $38 million in 2015. This was done through freezing management salaries reducing spending on training, travel and contract service, as well as reducing the number of employees by not filling vacancies.
The corporation expects to save another $53 million in those same areas between 2016-19 and reduce capital spending by $790 million over the next three years.
According to the report, capital spending in 2015 was $210 million under budget, which means SaskPower plans to save $1 billion over four years.
Due to the change in SaskPower’s fiscal year, the report covers the 15-month period between Jan. 1, 2015 and March 31, 2016.
Comments