SASKPOWER FACES TOUGH CHALLENGES IN NEAR FUTURE

A sign at my neighbourhood garage says there are three ways of doing things — cheap, fast and good.

If it’s good and cheap, it won’t be fast; if it’s good and fast, it won’t be cheap; and if it’s cheap and fast, it won’t be good.

Generating electricity is a little like that.

There’s no way you can build generating stations that can provide safe, reliable and environmentally friendly (i.e. good) energy that will meet all of our household and economic needs, as well as meet our climate change commitments, either cheaply or quickly.

That much is clear coming out of SaskPower’s recent annual report.

Indeed, if you wanted to learn about the complexities of running a power utility these days, you could do worse than spend an evening curled up with SaskPower’s 2015-16 annual report.

Fortunately, I saved you the trouble.

What I learned by reading the SaskPower annual report (most of it anyway) and covering the annual report news conference on Thursday is that it takes a lot of time and dedication to produce an annual report and, more importantly, to run a corporation of the size and complexity of SaskPower.

It also takes determination, like that demonstrated by Bill Boyd, the embattled minister responsible for SaskPower, who didn’t let a little “incident,’’ like hitting a deer while driving from Kindersley to Regina in the wee hours of Thursday morning, prevent him from participating in the news conference later that same morning.

After apologizing to the assembled handful of media in the Radio Room at the Legislative Building, Boyd dismissed the incident with a brusque “everything’s fine’’ (although his government-issue Impala looked a little worse for the wear and tear) and promptly started reading a statement from a remote location (presumably his constituency office in Kindersley).

It’s been that kind of a year for Boyd and SaskPower.

They’ve taken some hits — and have the bumps and bruises to show for it — but they’re remaining calm and carrying on. But I digress.

The annual report outlines the many challenges facing SaskPower as it moves into the 21st century saddled with an aging fleet of coal-fired generating stations and transmission and distribution infrastructure, most of which was built between 30 and 60 years ago.

First, the Crown corporation has to keep up with recent population and demand growth, while both are tapering off due to the economic slowdown.

Meanwhile, the utility will have to “rebuild, replace or renew’’ its aging infrastructure over the next 40 years at a cost of about $1 billion a year.

It also has to contend with tighter federal regulations on greenhouse gas (GHG) emissions for coal-fired generating stations.

In the next year or so, SaskPower will have to decide what to do with two coal-fired units, Boundary Dam Units 4 and 5, which must meet new GHG emissions regulations or be shut down by December 2019.

It also plans to build more natural gas-fired generation, like SaskPower’s recently announced $700-million, 350-megawatt (MW) plant at Swift Current, which is projected to be in service by 2019.

In fact, SaskPower currently has more natural gas-fired generating capacity than coal-fired capacity.

Even natural gas plants face tougher emissions regulations in the near future.

While natural gas plants generate about half the GHG emissions of conventional coal plants, they emit significantly more carbon dioxide than “clean coal” plants, which capture 90 per cent of carbon emissions or more.

It plans to build the $630-million, 50-MW Tazi Twe hydro project with the Black Lake First Nation in northern Saskatchewan by 2020 and signed a deal with Manitoba Hydro for 100 MW of hydro from 2020 to 2040 and may buy more.

It’s committed to developing another 1,600 MW of wind power between 2019 and 2030.

But even wind projects, like the proposed 177 MW wind farm at Chaplin Lake, which is smack dab in the middle of a migratory bird sanctuary, are problematic due to their potential impact on bird and bat populations.

At the same time, SaskPower has committed to doubling its renewable power generation to 50 per cent and reducing its carbon emissions by 40 per cent below 2005 levels by 2030.

All this, while trying to keep rates competitive, despite announcing three five per cent rate hikes in two years.

Like I said, it won’t be easy, fast or cheap.