Municipal Matters: Saamis Solar Park – an option, not an obligation

By Rochelle Pancoast on March 13, 2025.

The Saamis Solar Park (SSP) is a potential path to add clean and affordable energy into our electric franchise area, but a number of milestones need to be passed successfully for it to become a physical reality.

To date, the City has executed the Purchase and Sales Agreement to acquire the project with all associated planning and environmental approvals already in place, secured the rights to the land via lease, and obtained approval under Section 95 of the Electric Utilities Act to add up to 75 MW of additional solar generation capacity within our local franchise area.

What about gas-fired generators?

While the city will continue to advocate for ongoing use (and expansion) of our reliable gas-fired electric generating units, other levels of government define the greenhouse gas related rules that impact the cost of generating (carbon penalties/credits), the overall plant economics (relative competitiveness amongst technologies), and even the ability to continue running our electric assets (e.g. forced shut down conditions). Those rules also define what electricity is considered ‘clean/green’ or not. Of course, carbon regulations continue to evolve, and often along partisan lines, but the city needs to be mindful of carbon regulatory risk over the life of our generating assets (decades). The issue isn’t whether the city agrees with the environmental motivations behind clean energy or not, but how the city can best manage risks related to both supply of electricity and affordability of the electricity we supply.

Why now?

The location of the approved SSP may be the only sizable space able to accommodate utility-scale clean energy, now or ever, within our jurisdiction. It may be our only opportunity to diversify our electrical fleet.

As previously designed by the prior SSP owner, the solar park would connect to Alberta’s grid, bypassing Medicine Hat’s electricity system altogether. In that case, the city would benefit from linear tax gains upon project build-out, but the city would forego the ability to introduce utility scale clean energy into our system going forward.

With city ownership, the electricity generated at the solar park can be redesigned to flow directly into our city’s electricity system, at a scale and pace that makes sense for our local interests.

Ownership provides the option, but not the obligation, to build the project.

Where to go from here?

We recognize that SSP carries risk, as any energy supply investment does (both at time of investment and through its asset life). The business case has already evolved since we first contemplated the purchase of SSP a couple of years ago (federal leadership shifts, new commodity cycle, Alberta power market redesign, etc.) and may continue to evolve.

With the transaction now closed, the city has a window of strategic optionality. Staff and council need to weigh the considerations carefully to confirm how best to proceed from here, and we will continue to leverage industry subject matter experts as part of the process.

The timeline for milestone-based decision making on this project is not yet clear, with it potentially running up against our own municipal election this fall. Example milestones include decisions to fund the redesign of the site, regulatory permitting processes, and final investment decisions. For clarity, we will need to see a sufficiently positive business case (routinely updated for changing conditions/information) to advance the project to each successive go/no-go milestone – we do not intend to recommend constructing the project unless we continue to forecast a net financial benefit.

Should the city ultimately choose to advance the project (now or later), we would do so to meet local customer green energy demand, manage electricity carbon compliance risk (now and long term), provide complementary supply to offset our summer demand peak (supporting further load growth), and to add to our financial bottom line.

Those interested in learning more and following the status of the Saamis Solar Park can visit medicinehat.ca/SaamisSolar.

Rochelle Pancoast is managing director of the City of Medicine Hat’s energy, land and environment division.