Power plant proposal draws controversy

The Northland Power Income Fund is building a 261-megawatt plant that will run on natural gas. Under a 20-year agreement, Crown-owned SaskPower will supply the gas and buy all the electricity produced.

People connected to the project say it will employ 200 people during construction and will offer 20 to 30 full-time jobs once it's running in 2013.

However, NDP MLA Warren McCall questions why SaskPower can't run such a plant by itself, instead of turning to a private company.

A coalition of union-affiliated groups, Save Our Saskatchewan Crowns, says it's concerned by statements from Northland that if natural gas prices rise, Saskatchewan people will get stuck paying the extra costs through their electricity bills.

However, Northland president John Brace disagrees with the notion the arrangement puts all of the financial risk on SaskPower.

The contract with SaskPower is standard in the industry across North America and the risk is fairly balanced between the two companies, Brace said.

"Our side of the risk is the cost of building, the operations, the cost of maintaining, the long-term life, and on and on," Brace said.

"We don't take the risk of gas prices and the gas market, just as we're not taking the risk of electricity prices and the electricity market."

Construction is expected to begin in July. The total cost of the project is budgeted at approximately $700 million.