Energy division officials are asking city council to approve $675,000 to go toward planning for the Saamis Solar park.--SUPPLIED IMAGE
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The city’s energy division will seek $675,000 from council to advance planning work and analysis for the Saamis Solar Park project, but that work won’t be complete until the fall when other key factors in a final analysis on approving the project may be more clear.
That includes the future of industrial carbon pricing – a key factor in the project’s economics which are at issue in this spring’s federal election and discussion by the Alberta government.
“There’s a natural schedule” that aligns with city’s decision-making process, said energy division head Rochelle Pancoast this week.
Competing visions of the industrial levies – like those paid by the city’s power division – are an issue in the national election which concludes April 28, while Premier Danielle Smith has signalled that a provincial levy may remain even in absence of a federal system.
“It’s stimulated so much investment in new technologies and I believe technology will solve all our emissions problems,” Smith told reporters this week.
“There will perhaps be a modification of what the current program looks like to make it work better, but we haven’t settled on what that looks like.”
Locally, the additional money would advance engineering work and provide a refined construction cost estimate, similar to what was suggested early this winter by administrators.
If approved, said Pancoast, the work would begin revising a site plan to build the 1,600-acre proposal in stages, direct power to the city’s system (not the export grid as planned) and provide a “project specific” construction estimate, according to Pancoast.
“It would build on preliminary analysis … and position the project for an approval (decision),” said Pancoast. “We’ve always said we won;t recommend a decision that is not in the economic interest of our community.”
That capital cost, currently estimated between $100 million and $120 million, would be weighed against the forecasted economic performance of the facility in a business case presented to council, potentially in the fall.
At that point, change to carbon pricing at the federal and provincial levels should be more settled, said Pancoast.
The city purchased the Saamis project from private-sector developer DP Energy late last summer, citing revenue from the provincial TIER program as a key consideration.
The City of Medicine Hat paid $12 million in TIER fees in 2024, but third-party analysis states that could quadruple by 2031 under the existing system as allowable emissions are set to become more stringent while the cost per tonne increases.
The city estimates an initial Saamis phase would produce about $7 million per year in TIER credits that it could apply against gas-fired power-plant carbon costs at 2027 rates.
While both major federal parties say the consumer carbon levy, currently set at zero, won’t return after the election, they differ on industrial pricing. Conservative Leader Pierre Poilievre has said the charge to heavy emitting industries would be removed under a CPC government to bolster industrial activity, while Liberal Leader Mark Carney says global trading requires carbon pricing on big emitters and removing it would isolate the county economically.
Saskatchewan Premier Scott Moe announced his province will unilaterally end the industrial charges, but Smith has indicated that while Alberta’s system may need revisions, she sees a place for it.
Smith made relinquishing federal control of industrial emissions prices to the provinces one of nine demands for the next prime minister, and outlined her position at a press availability in Brooks this week.
“It has to change, no question,” said Smith, reiterating that a carbon compliance system has been in place in Alberta since 2007, but is now linked to “federal stringency and escalation requirements that industry is telling us are going to be incredibly damaging to investments.”
“We have to figure out what the right level is and how the program should look, but those are very much active consultations,” she added.
