The City of Medicine Hat looks to stay out of the way while the provincial government spars with Ottawa over power jurisdiction, but Premier Smith's decision to invoke her Sovereignty Act over a federal plan to be net-zero by 2035 could be a hurdle as the city seeks future funding for its own energy efforts.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
Premier Danielle Smith says invoking the “Alberta Sovereignty Act” will lock Ottawa out of meddling in the provincial grid, but it is not known if it will also lock Medicine Hat out of accessing federal grants for power projects.
The government introduced a resolution Monday afternoon to direct officials at provincial entities not to comply with a federal net-zero grid plan, and potentially create a Crown corporation to buy private gas-fired power plants that don’t meet the standard by 2035.
“The consequences of this particular overreach would be severe,” Smith told reporters earlier in the day. “Alberta would bear the largest share of the expense required to meet these absurd targets.”
She reiterated her belief that 2050 was a more realistic time frame and worries over grid reliability, stating natural gas-fired power was needed to create baseline power – a sector she says is being dampened by federal targets.
Federal Natural Resources Minister Johnathon Wilkinson said in a statement that Smith “is choosing to create fear and uncertainty over collaboration and positive results for Albertans.”
“Canada stands ready to … make substantial investments in Alberta’s Electricity infrastructure … with as many partners as possible.”
Last spring the Liberal government in Ottawa announced $40 billion in grants to build low carbon-emitting plants and reinforce power grids, including money for provincial Crown power companies and their municipal-level counterparts.
While the resolution in Alberta does not specifically limit private corporations from accessing Federal Support, the UCP government has signalled that it won’t allow Ottawa to work directly with municipalities on some other issues, like housing in particular.
On Monday, City of Medicine Hat energy officials were still evaluating the announcement and any repercussions the dispute may have on city operations, planning or potential grant opportunities.
Managing director Rochelle Pancoast told the News the matter appears to be one of the province and Ottawa “clarifying” their jurisdiction, and “the city doesn’t want to get in the way.”
“We’ll look to find ways to navigate through that, so that we can carry on business as usual as much as possible,” she said.
“We certainly want to respect provincial and federal governments to the fullest extent possible, and while they’re in the midst of clarifying that jurisdiction, we’ll want to be careful.”
Utility officials estimated last fall it could cost more than $300 million to bring the city’s entire power grid to the point it could double power delivery to all homes – something that may be needed regardless of energy sources, as power use generally increases.
Any new renewable generation project by the city could receive 15 per cent of construction costs back in federal grants under the 2023 federal budget program.
The city has also received both federal and provincial grants to advance carbon-capture planning and study carbon dioxide abatement at its gas-power fleet.
A federal grant administered by the Federation of Canadian Municipalities will be aimed at determining technological solutions to make power grids more reliable.
Creating a provincial Crown power producer would be a first in Alberta, though municipalities were at the forefront of the utility sector when it developed in the early 20th century.
Medicine Hat remains the only grandfathered municipal power producer in the province, having gained an exemption when the grid was deregulated in the late 1990s.
Other municipally controlled power companies, such as Enmax in Calgary and Epcor in Edmonton, are wholly owned subsidiaries of those cities, while a number of other cities, like Red Deer, own and operate local power networks.
Smith says a Crown corporation could take on any potential risk of newly planned gas-fired plants – something she says is needed to back-stop wind and solar production.
It could also explore nuclear development, she said.
“We believe in the private market and Albertans have been well served by it,” she told reporters. “We will continue to promote private electricity generation, distribution and retail … It’s very similar to what Epcor and Enmax participate in the market.
“Should we choose to move forward it would be a wholly owned entity of the province that would operate when needed.”
Utilities Minister Nathan Neudorf described the idea as the province becoming the “producer of last resort.”
“We are willing to do whatever is necessary to keep the lights on,” he said.
