On September 11, 2023, the Alberta Utilities Commission (“AUC”) formally launched an inquiry into the ongoing economic, orderly, and efficient development of electricity generation in the province (“Inquiry”).
This comes over a month after the provincial government’s surprise announcement to pause the approval of new power plants and hydro developments that produce renewable electricity greater than one megawatt in project capacity until February 29, 2024 (“Approval Pause”).
The Inquiry is taking place during the Approval Pause, with a final Inquiry report to be delivered to the Minister of Affordability and Utilities (“Minister”) by March 29, 2024.
On September 11, 2023, the AUC released details of its “[I]nquiry into the ongoing economic, orderly and efficient development of electricity generation in Alberta.” The Inquiry will culminate in a report to be delivered to the Minister and will proceed in two modules. Module A will consider the following:
- Development of power plants on specific types or classes of agricultural or environmental land;
- The impact of power plant development on Alberta’s pristine viewscapes;
- Implementing mandatory reclamation security requirements for power plants; and
- Development of power plants on provincial Crown land.
Interested parties will be able to participate via online survey, through written submissions, or through oral submissions during in-person sessions, with dates and locations to be determined.
The AUC is retaining experts to prepare reports related to the specific inquiry topics, which will be made publicly available. An oral hearing will be scheduled in December 2023, allowing the AUC to ask questions of parties on their pre-filed submissions.
The AUC has established the following preliminary process schedule:
- AUC notice with additional updates/participant information – Mid-September 2023
- Oral submissions (in-person) – Late October to mid-November 2023
- Written submissions – Mid- to late November 2023
- Reply submissions – Early December 2023
- Oral hearing – Mid-December 2023
- Deadline to submit report to the Minister – March 29, 2024
The AUC will also be launching Module B to review the impact the increasing growth of renewables has to both generation supply mix and electricity system reliability, with further details to be announced shortly.
Following on the heels of the Approval Pause, the Inquiry is the next step in the government’s policy review, which was launched in response to a July 21, 2023 letter from the AUC to the Minister. In its letter, the AUC indicated that two broad policy issues “have come to the forefront of the Commission’s public interest considerations: the development of power plants on high value agricultural lands and the lack of mandatory reclamation security requirements for power plants.” The AUC further stated that the current process for reviewing renewable electricity projects is ill-suited to address these issues, and that a period of engagement followed by government direction was required.
On August 3, 2023, the Minister announced the concurrent Approval Pause and policy review, the latter to inform government policy decisions around the development of electricity generation in the province.
The same day, the AUC made a similar announcement, inviting stakeholder feedback by August 18, 2023 on how it should implement the Approval Pause.
On August 22, 2023, the AUC announced that, during the Approval Pause, it would continue to process applications up to the approval stage for new renewable electric generation projects. The AUC further indicated that it planned to introduce new interim information requirements relating to agricultural land, viewscapes. and reclamation security to supplement Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydro Developments and Gas Utility Pipelines.
In a September 6, 2023 Bulletin, the AUC announced the new interim information requirements for power plant applications filed after August 2, 2023 to supplement Rule 007. They require applicants to provide further information regarding the following:
- Agricultural land
- agricultural capability of soils intersecting the project footprint;
- descriptions of all soil series within the project and all potential impacts to soil quality, quantity and hydrology, including proposed mitigations;
- planned earthworks, including methods used, proposed mitigations to protect soil quality, quantity, and hydrology;
- the potential for co-locating agricultural activities; and
- the qualifications of the agrologist(s) who prepared or reviewed the responses regarding agricultural land.
- Municipal land use
- whether the project complies with the applicable municipal planning documents and other municipal by-laws;
- justification for non-compliance with applicable municipal planning documents and other municipal by-laws; and
- the applicant’s engagement with potentially affected municipalities to modify the project or mitigate any of its potential adverse impacts.
- pristine viewscapes (including national parks, provincial parks, culturally significant areas, and recreation and tourism areas) on which the project will be imposed; and
- available mitigations to minimize project impacts.
- Reclamation security
- the reclamation standard upon decommissioning;
- how reclamation security will be calculated;
- frequency with which the reclamation security amount will be updated;
- when the reclamation security will be in place;
- form the reclamation security will take (e.g., letter of credit, surety bond, other);
- beneficiaries to whom the reclamation security will be committed; and
- how the beneficiary can access the security and any constraints on such access.
The Inquiry and Uncertainty
When the Approval Pause was announced, we commented that the policy review and pending Inquiry are far reaching and that the Inquiry was likely to see a wide range of views presented by an equally wide range of stakeholders.
In structuring the Inquiry into two modules, with Module A addressing certain potential project development impacts (i.e. impacts to agricultural lands as well as viewscapes) and issues (i.e. municipal land use and reclamation security), and Module B addressing impacts of renewable generation on the Alberta Interconnected Electric System (i.e. growth of renewables in the supply mix), the AUC has made a clear effort to efficiently address the anticipated diversity in stakeholders and views on the issues it is tasked with considering. However, the uncertainty arising from the Approval Pause and Inquiry we discussed previously, remains.