Industry experts say Saamis Solar a smart buy, local group in opposition wants clear picture painted

By Collin Gallant on September 12, 2024.

Hatters in the private sector utility are backing a city move into solar energy production, while opponents are continuing calls for the energy division to explain why planning to take over a huge private proposal makes sense.

The city announced last month it had secured rights to buy the Saamis Solar Park – a 1,600-acre plan to add 325 megawatts in the city’s north end- from Ireland-based DP Energy Canada.

An application before the Alberta Utilities Commission states that the city sees an initial 75-megawatt phase helping to manage growing peak demand in summer by 2027 and lower the carbon footprint of the publicly owned enterprise.

But a group of local residents called the Medicine Hat Utility Ratepayers Association has registered as an affected party in the purchase application, with its leader telling the News there are too many unknowns to support the project.

“This is hundreds of millions of dollars and a huge concern,” said Sou Boss, president of MHURA, who says Hatters were “kind of left in dark until the announcement” of the sale.

“It could be a huge hinderance to taxpayers at the end of the day, and they shouldn’t be doing anything without public engagement,” she said. “Show us what you’ve got.”

Last week, administrators only touched briefly on the Saamis purchase during an overview of the city’s in-place clean energy strategy.

That plan generally preaches a cautious, calculated approach in light of current uncertainty over net-zero transition timelines for the 300-megawatt gas fired plants, as well as evolving technology and economics in the power market.

However, energy division head Rochelle Pancoast called Saamis a “no regrets” proposal that will be economically viable, with a “proven technology” that will strengthen the business in any scenario.

Her 90-minute presentation is scheduled to be repeated at an upcoming council meeting.

Some in the utility sector outside the city agree that buying Saamis is the right move.

“The times have changed and you have to change with them,” said Scott Alexander, a solar business developer who has worked in Medicine Hat and is now based in Lethbridge with D-Com Energy Solutions.

“The city is in a position where they’ll have to spend money anyway (to boost production and reduce carbon emissions) … Solar is the cheapest to operate, cheapest to build and maintain in the long run. Way cheaper.”

He said adding a portion of solar production will lower production costs by reducing gas purchases, save wear and maintenance on gas turbines and provide carbon credits to offset payments to the provincial TIER carbon levy on gas-fired generation.

MHURA wants more information about the timeline of negotiating the purchase and council’s role, a cost-benefit analysis and other options considered. Specific to the project, MHURA has requested proposed timelines and estimated costs, revenue projections, how the city plans to meet conditions on the original AUC approval and potential reclamation costs.

“We’re not even sure of the risks; just show us the numbers and let’s see if it works,” Boss told the News. “Hatters shouldn’t be in a position where the city is going to spend hundreds of millions of dollars without knowing the benefits.”

Alexander likened diversifying the city’s power sources to buying a hybrid car – which will cost less to fuel than a gasoline vehicle in the same conditions over time.

“The financials are complicated,” said Alexander. “An accountant could figure it out, if given all the numbers, but I’m not sure the city would be really forthcoming with all their figures, to be honest.

“At any rate it’s cheap power. Even if it costs $100 million to build 75 megawatts (of capacity), and they do the rest in phases, you get a taste for it. If the city is forthcoming and opens up the books after a year – and it will only take a year – more people will realize that it’s not such a bad idea.”

The MHURA request for information asks for answers by Sept. 15 in order to properly participate in the new AUC decision, which requires parties to engage developers first before regulatory arguments.

There is no set schedule for the AUC application process.

Share this story: