About 1,600 acres of land south of the CF Industries fertilizer plant will become home to the Saamis Solar field, which the City of Medicine Hat is now planning to buy.--NEWS FILE PHOTO
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A group positioning itself as a watchdog over city-utility operations is raising questions about a plan to buy, build and operate a massive solar power facility in Medicine Hat, but renewable energy observers hail the move as groundbreaking for the sector.
Medicine Hats’ energy division said Tuesday it has an agreement to buy the Saamis Solar Park, designed to be built on 1,600 acres north of Crescent Heights, and fold it into its complex of gas-fired generators, nearly doubling peak production capacity over time.
That depends on several points of regulatory approval, but the move could represent the first time in North America a traditional thermal (coal or gas) utility will match its existing assets with zero-emission production.
But, after public controversy raged last summer over high power prices and the city’s reliance on power profits, the Medicine Hat Utility Ratepayers Association formed and said it should be shelved until after a third-party report into the energy division business model comes out this fall.
“Most likely this will cost the taxpayers a great deal of money, with no actual cost savings or benefits to us,” claimed a statement from the group to its 400 members. “Our property taxes will go up and up, along with our utility bills.”
It also questioned the potential budget of the project, how it would affect the city’s power production cap and the potential economics of the capital expense, likely more than $400 million in total.
“Will we see this benefit returned in our lifetime?”
Energy officials told the News on Tuesday that the city has evaluated options to address “net-zero” regulations that have been debated by Ottawa and Alberta for several years. Saamis is an opportunity to lower its carbon levy costs and will lower operating cost on a large portion of its production, said division head Rochelle Pancoast.
It would also bolster the city grid to meet summer peak demand and potentially help exiting industrial plant customers meet low-carbon goals or attract new investment.
Meanwhile, the city would “continue to advocate” that gas-fired facilities be kept operating as long as is economical to do so, said Pancoast 
She said the project, construction timelines and estimates, as well its place in a “clean energy” roadmap will come to council in early fall, while the larger review of business practices and municipal use of profits is due after Oct. 1.
Energy committee chair, Coun. Darren Hirsch, told the News the division must continue to conduct business, and while he and council are eagerly awaiting the review, the city can acquire a valuable asset.
“We think it’s a good fit,” he said.
Heather Mackenzie, executive director of Solar Alberta, a not-for-profit society that includes industry partners and advocates, said it make financial sense to use hard-to-develop former brownfield sites for solar facilities.
Generally, smaller municipalities, like Innisfail, and First Nation communities have made direct investments to directly own solar power production facilities, but not yet at the size of Medicine Hat, and not in the position as a utility owner, distributer and generator.
“The scale is quite something, and quite large,” she said, downplaying the arguments of “naysayers” who oppose a switch to renewables as a costly overbuild.
“If you have the land, it can be a very valuable revenue stream that makes you energy independent,” she said, noting Medicine Hat’s advantage as a mature utility provider and “really superior” solar resource.
“If it wasn’t profitable why would companies from all over the world be coming to Alberta to invest in it? Why not have a public benefit?”
The city’s application to the Alberta Utilities Commission provides some insight into the project and how it would blend into power production business unit.
The city seeks a transfer of ownership from developer, DP Energy, which earned approval to build the project in July, as well as determination of terms in the city’s electric operating charter.
Essentially it asks that intermittent generation, like solar, not be included in a calculation of maximum production capacity agreed to when Medicine Hat maintained a local franchise during power deregulation in the late 1990s.
It also states that, if approved, the city would first build a 75-megawatt phase potentially by early 2027.
That would boost potential production capacity by about 25 per cent, but would help the city meet reliability standards during summer peaks in some situations, it argues.
At 325-megawatt maximum capacity it would slightly more than double current generating capacity (299) from gas-fired facilities.
[Editor’s note: This version of the article corrects a description of Solar Alberta, and clarifies comments from its executive director about potential financial benefits of developing brownfield industrial sites.]
