July 21st, 2024

Group calls local net-zero plans ‘ideological agenda’

By Collin Gallant on June 27, 2024.

A solar canopy at the Cultural Centre at Medicine Hat College is seen alongside maintenance work underway at the Saamis Tepee.--News Photo Collin Gallant

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The long-term cost of bringing the Gas City into a “net-zero” position will be laid out in late 2024 – and may not be needed for five years – Medicine Hat officials said this week, but a group that protested high power prices last fall is calling for a halt on funding an “ideological agenda.”

The Medicine Hat Utility Ratepayers Association formed to act as a watchdog of city utility rates and other spending following a power price spike in 2023.

This week its leaders said work on items like developing a carbon capture hub or adding renewable energy production don’t make financial sense in a rapidly evolving technological and political environment.

“We want to know what the projected cost of these projects is, and we don’t want to be told after the fact,” said Sou Boss, head of MHURA. “The city should pause in anticipation in front of a change in federal government.

“Do we want to be in a position where we’re transitioning, but it could bankrupt the city? … They should include stakeholder input in these decisions.”

The group often hosts outspoken carbon levy critics at its meetings, and on social media often supports messages in favour of federal conservative messaging and against renewable energy projects.

On Tuesday, city administrators and elected officials discussed initial capital priorities for the 2025-26 city budget, but with longer-term “energy transition” due in a separate report next fall.

Indications are projects might not be needed until after the 2029 civic election, but a general position is that the city should save money in the meantime to remain flexible in the future.

Council didn’t discuss net-zero during debate and Mayor Linnsie Clark had no comment when asked on Wednesday.

Council members have said moving to a low-carbon environment is a key issue facing the city, which has traditionally made up for business unit and tax shortfalls with energy profits, as well as pay for special projects, such as Co-op Place.

Finance official Aaron Hoimyr told council the budget model depends on power plant revenue that will likely be in flux for the next decade.

He suggested the city conserve funds in reserve now to maintain spending over time, and eventually modernize power generation plants, if needed.

“We are exposed to low electric generation earnings in the coming years,” said Hoimyr. “The cash burn we’re seeing poses a risk, and if earnings (recovery) doesn’t materialize by 2030 we want enough cash on hand to pivot.”

That includes major spending to decarbonize before 2035, either using carbon capture, adding renewable energy production, or importing power from the grid.

“It’s likely a combination of three would be needed, but regardless of the route we take, the city will need to invest hundreds of millions of dollars,” he said.

The power plant banked a record $135-million dividend last year, but a $50-million dividend is expected in 2024 due to lower pricing and sales to the Alberta grid.

The city is also conducting an energy business review, and the province is considering major changes in the Alberta power market.

“There are many unknowns,” Hoimyr concluded.

Boss says action now would be premature, but the city has spent several million on carbon capture studies and is preparing to further partnerships with the private sector on the CCUS hub.

“We’re trying to address 2035 and 2050, and technology can change,” she said. “(Lower emissions) are needed, but it’s a global problem.

“You wonder if it’s just a money maker for corporations. I don’t know, but you have to wonder.”

During the budget presentation, energy division managing director Rochelle Pancoast presented her division’s plans, noting the absence of transition items.

“We have very few asks in this budget cycle and that recognizes that we have longer-term pressures that we’re facing, like energy transition, which we know will be an expensive requirement for us to deliver,” said Pancoast

Beyond general infrastructure spending, maintenance and replacements, the division is only asking for $325,000 to develop a water management strategy partly focused on water supply as an economic driver.

Staffers also studied but are not recommending the city install solar panels on large city facilities, such as Co-op Place, the fleet garage and other large flat-roof buildings, for a cost of $3 million.

The entire initial proposal will be discussed at a July 9 council meeting, then formally debated on July 15.

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