Crews string power lines near the South Saskatchewan River across from the City of Medicine Hat's main power plant in this September 2019 file photo. Another minority Liberal government means the city is still in a wait-and-see phase regarding the future of the energy division.--NEWS FILE PHOTO
@@CollinGallant
A minority government in Ottawa gives the City of Medicine Hat energy officials only a short-range view of what they say are complex long-range challenges for the municipal power business.
Last fall top administrators laid out what they say are a handful of intertwined issues they face for planning decisions. Advancing technology, growing demand and a general drive to lower emissions in industry are considerations, alongside uncertainty over carbon pricing and the city’s financial capacity to make changes as export profits are strained.
With each affecting several others, the tact is to advocate for longer use of natural gas turbines, monitor the issues and evaluate options to mitigate carbon output.
But, more certainty regarding those issues is needed before substantial decisions are made, council heard in September.
Several issues were debated heavily during the federal election that concluded Monday, but with Liberals returned with only a minority mandate, the outlook may change again at some point.
“It’s still pretty murky, and with a minority government, we’re not sure what can get put through,” said Coun. Darren Hirsh, chair of council’s energy committee, which met Thursday afternoon.
The Liberal platform also promises to ramp up grant programs that could pay $30 million or more of the proposed $120-million Saamis Solar Phase 1 capital cost. That project is now subject to advanced design and final capital costing to determine if it meets economic hurdles.
But the Liberals are also poised to keep Federal Clean Electricity Standards that will set a timeline on decarbonization.
The Conservative platform promised to end industrial carbon levies as a nod to helping major industries and economic activity, and on Thursday, Premier Danielle Smith announced her government will launch a constitutional challenge of federal clean electricity targets.
“Certainly, there’s a platform that articulated (Liberal Leader Mark) Carney’s view on carbon which maintains his view on carbon and in some ways expects to tighten it,” said Rochelle Pancoast, head of the energy division. “How that manifests is to be determined, so uncertainty continues.
“Carbon will be defined politically, and we don’t have a long-term political window.”
Smith has included in a list of demands that Ottawa relinquish any authority over the industrial levy to the provinces (she has hinted that a continuation is likely of a modified Alberta TIER price of big emitters).
On Thursday, she claimed Clean Electricity Standards would hurt the utility sector and lead to unreliability.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations,” she told reporters. “The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk.”
The Liberals maintain that an environmental plan and moves to lower carbon will be requirements of any expanded set of trade deals they plan to pursue.
Smith also alluded to further action soon on power regulations from her government to protect base-load natural gas generation projects.
Outlined in December, the clean electricity rules would require a three-quarter reduction in carbon dioxide emissions at the city power complex by 2035, a level city staff say is substantial and would require hundreds of millions of dollars in investments to meet.
The federal Liberal government set consumer carbon levies at zero on the eve of the election, but that did not affect the industrial price paid by large emitters like the City of Medicine Hat.
That totalled $11 million in 2024, and could rise to more than $40 million by 2030 as rates and requirements escalate.
Over the same time frame, the city is expecting low or no profits depending on the outcome of a redesign of the provincial electricity market, where the city banks a majority of its profits.
City officials state that built to 75-megawatt capacity initially, Saamis phase 1 would produce a $7.5 million carbon credit rebate under TIER program in 2027.
