Frequently Asked Questions Regarding The Power Corporation Act (Saskatchewan): Why Understanding the Act is Critical to your Energy Project in Saskatchewan

November 23, 2022 | By Chad Eggerman, Tyson Acoose, Kevin Mehi, Brady Chapman

Below is a series of frequently asked questions – and answers – regarding The Power Corporation Act (Saskatchewan) (the “Act”). Please note that the below questions and answers are of a general nature only, and are not intended to constitute specific legal advice. However, the Procido LLP energy group is well-versed in the intricacies of the Act, and would be pleased to answer any specific questions that you may have regarding the applicability of the Act to your energy project in Saskatchewan. For more information, please do not hesitate to contact any member of our energy team.

  • 1. What is the main purpose of The Power Corporation Act (Saskatchewan)?

The main purpose of the Act is to create a vertically-integrated provincial utility provider known as the Saskatchewan Power Corporation, or “SaskPower”. The Act also defines the rights, responsibilities and obligations of SaskPower, which are primarily to generate, transmit, purchase, sell and supply electrical energy in Saskatchewan.[1]

  • 2. What are SaskPower’s powers under The Power Corporation Act (Saskatchewan)?

SaskPower has broad and general powers under the Act. First and foremost, section 38 of the Act grants SaskPower the exclusive right to supply, transmit, distribute and sell electricity in Saskatchewan (subject to certain exemptions). Additionally, section 8(1)(i) of the Act grants SaskPower the ability to act for any other purposes and powers connected with or incidental to the purposes and powers of SaskPower as set out in the Act (or any other act).

Private sector electricity groups are not mentioned anywhere in the Act. Accordingly, independent power producers (“IPPs”) do not have prescribed rights related to electricity supply in Saskatchewan.[2] This is unsurprising, as certain provisions of the Act date back to the 1950s – nearly 75 years ago – when broad access to electricity was still relatively new in Saskatchewan.

  • 3. Does SaskPower have the exclusive right to supply, transmit, distribute, and sell electrical energy in Saskatchewan pursuant to the Act?

Yes – as noted above, SaskPower has the exclusive right to supply, transmit, distribute, and sell electrical energy in Saskatchewan pursuant to the Act.

  • 4. Can SaskPower waive this right of exclusivity originating in the Act?

Yes – SaskPower may (on any terms and conditions that it considers advisable) consent in writing to the supply, transmission, distribution or sale of electrical energy by or to a person or category of persons.[3] As a result, IPPs, First Nations and municipalities must receive approval from SaskPower to generate electrical energy in Saskatchewan.[4] This waiver is a very important document to obtain if an IPP or First Nation wishes to proceed with an electrical supply project in Saskatchewan.

  • 5. Does this right of exclusivity in the Act apply to “behind the fence” (“BTF”) generation?

Yes – the Act is clear that only SaskPower has the right to supply electrical energy in Saskatchewan. Accordingly, any BTF project must secure a waiver of SaskPower’s exclusive right to supply, transmit, distribute, and sell electrical energy in Saskatchewan.

Accordingly, lenders and purchasers of BTF projects in Saskatchewan should be aware of such right of exclusivity. The failure to obtain this waiver may mean a failure to obtain financing or a failure to close a transaction.

Further, while true BTF projects are not intended to be grid connected, most BTF projects in Saskatchewan are required to remain grid connected in order to act as a source of back-up power or to address intermittency in the electricity grid. As a result, a generation interconnection agreement with SaskPower is also usually necessary for BTF projects in Saskatchewan.

  • 6. Can a private company build a privately owned transmission line in Saskatchewan pursuant to the Act?

No – SaskPower has the exclusive right to transmit electrical energy over its transmission lines in Saskatchewan.[5] However, SaskPower may consent to a private contractor building a transmission line in Saskatchewan in compliance with all SaskPower rules, regulations, and standards.

  • 7. Do Indigenous groups have any rights to supply, transmit, distribute, or sell electrical energy in Saskatchewan pursuant to the Act?

No – the Act has not contemplated any such rights for Indigenous groups in Saskatchewan. The Government of Saskatchewan has the ability to enact regulations under the Act to facilitate Indigenous participation and engagement, but has not yet done so.

  • 8. Can SaskPower or the Government of Saskatchewan put in place regulations that would permit private parties to supply, transmit, distribute, and sell electrical energy?

Yes – the Government of Saskatchewan has the ability to enact regulations under the Act which would permit private parties to supply, transmit, distribute, and sell electrical energy, but has not yet done so.[6]

  • 9. Can SaskPower enter into agreements with private parties to sell or purchase electrical energy or transmit electrical energy?

Yes – typically, SaskPower will enter into power purchase agreements (“PPAs”) awarded to an IPP through a competitive public procurement process.[7]

  • 10. What happens if a private party supplies, transmits, distributes, or sells electrical energy without SaskPower’s consent?

A private party who supplies, transmits, distributes, or sells electrical energy without SaskPower’s consent can face serious consequences. Initially, SaskPower may refuse to transmit or distribute electrical energy to the private party, disconnect its transmission and distribution lines, or take any other undefined action that SaskPower “considers necessary”. SaskPower can then seek to recover all costs expended due to the contravening private party.[8]

  • 11. Does the Act allow SaskPower to import and export electrical energy?

Yes – the Act allows SaskPower to import and export electrical energy.[9] Notably, there are more interconnections between provinces and the United States than there are interconnections between other provinces in Canada.

  • 12. Can a private party or First Nation export or import electrical energy into or out of Saskatchewan pursuant to the Act?

No – only SaskPower can import and export electrical energy between other provinces and other countries. This right of exclusivity may negatively affect private parties with operations located near provincial or national borders. For example, private parties may be forced to purchase power from SaskPower despite identifying more commercially viable sources of electricity in Manitoba, Alberta, North Dakota, or other neighbouring jurisdictions.

  • 13. An IPP which owns power generating facilities in Saskatchewan must pay taxes on both lands and profits. Does SaskPower pay taxes on lands and profits pursuant to the Act?

No – SaskPower is a provincial crown corporation, and is exempt from paying taxes on its lands and profits.[10]

  • 14. Can a private party unilaterally capture and sequester carbon dioxide (CO2) generated from power generation facilities pursuant to the Act?

Not likely – section 8(1)(c) of the Act provides that the production, purchase, transmission, distribution, sale and supply of carbon dioxide (CO2) or gas derived from power generation is within the powers of SaskPower.[11]

  • 15. Carbon offsets, credits and other benefits from reducing emissions are an increasingly important revenue stream for IPPs and First Nations. Does SaskPower have a right under the Act to these environmental attributes?

Not necessarily – however, SaskPower has the right to enter agreements, rights or other benefits related to carbon emissions, greenhouse gases or other air emissions.[12] Accordingly, IPPs and First Nations must negotiate with SaskPower to try to secure these rights from SaskPower.

  • 16. Does the Crown Investments Corporation (CIC) of Saskatchewan control SaskPower?

The Act provides that CIC must approve any rates, charges and prices at which any goods, utilities or services are sold by SaskPower; may make orders and issue directives with regard to the conduct of the financial operations of SaskPower; may access SaskPower’s books and accounts; and audit SaskPower’s accounts and Finacial Statements. CIC is responsible for providing Crowns such as SaskPower “with guidance and direction to align with government priorities”. The Board of CIC is currently comprised of seven elected government politicians of varying backgrounds who are members of the legislative assembly of Saskatchewan. 

  • 17. Where can I access the Act?

The Act may be accessed online through the Publications Centre on the Government of Saskatchewan’s website: https://publications.saskatchewan.ca/#/products/760.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.


[1]   See section 8.1 of the Act.

[2]   For reference, independent power producers are private entities which own and or operate facilities to generate and sell electricity to government buyers such as SaskPower.

[3]   See section 38(2)-(3) of the Act.

[4]   See section 38(1) of the Act.

[5]   See section 8.2(1)(a) of the Act

[6]   See section 38.1(4) of the Act.

[7]   See section 8.4(b)(i) of the Act.

[8]   See section 8.3(4) of the Act.

[9]   See section 8.1 of the Act

[10]  See section 4 of the Act.

[11]  See section 8(1)(c) of the Act.

[12]  See section 8.4(b)(ii) of the Act

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