Ottawa floats new options for electricity rules that drew ire of Alberta and Saskatchewan

February 16, 2024 Canuck

The federal government is considering significant updates to its proposed regulations aimed at reducing emissions from electricity generation to net-zero.

The move comes after months of consultations with Canadians, the government said, but also follows strong opposition from politicians in Alberta and Saskatchewan.

A draft version of the Clean Electricity Regulations was initially released last August. The regulations function as a set of rules for transitioning Canada’s electricity grid to net-zero starting in 2035.

Environment and Climate Change Minister Steven Guilbeault told CBC News it was always the goal to strike the right balance when it came to the first set of draft regulations.

But Ottawa remained open to comments from provinces and experts, he said, adding the revisions weren’t precipitated solely due to pushback in Alberta and Saskatchewan.

“I wouldn’t say that the options that we’re proposing in today’s document are the result of the actions or comments of one particular jurisdiction over others,” he said.

“I mean, we’ve held webinars with more than 500 people, we’ve had 75 different bilateral meetings, 18,000 submissions were made. So what we’re putting out today is a result of everything we’ve heard, and not one particular company, individual or even province.”

Last November, Alberta invoked its Sovereignty Act for the first time over the draft regulations. Alberta Premier Danielle Smith called the 2035 target unachievable. Guilbeault has also referenced the 2035 date as a deadline.

Yet, under the prior draft regulations, exceptions would have allowed for significant amounts of emissions from electricity generation into the 2040s, and even into 2050 and beyond.

But even with those provisions, Alberta had concerns.

Unlike most of the rest of the country, Alberta gets most of its electricity from natural gas. Prominent Alberta economists like Andrew Leach and Blake Shaffer argued Ottawa would need to be flexible in developing the electricity regulations given Alberta’s unique makeup.

WATCH | Alberta invoked Sovereignty Act over net-zero electricity grid regulations:

Alberta invokes Sovereignty Act over net-zero electricity grid regulations

3 months ago

Duration 2:01

In January, Jonathan Wilkinson, the federal minister of natural resources and energy, also told the CBC’s Aaron Wherry that he didn’t feel as though Alberta was questioning the need to green its grid, just the pace of doing so.

“We probably have a view that it can go faster. And so we’ve been trying to actually understand and look at how we might be able to address some of their specific concerns,” Wilkinson said at the time.

“Hopefully, when we get to [finalizing the regulations], Alberta will see that we have reflected seriously on some of the things that they have brought up.”

In November, the Saskatchewan government also said it would use its Saskatchewan First Act for the first time to establish a tribunal to study the economic effects of the proposed regulations.

“We need to get a nuanced, detailed sense of what these policies mean for the economy of Saskatchewan and the people of Saskatchewan,” Justice Minister Bronwyn Eyre told reporters last November.

CBC News has reached out to spokespeople in the Alberta and Saskatchewan governments for comment.

New options under consideration

An Alberta-Ottawa working group has been meeting since last September, with a stated goal of finding consensus around emissions reduction and energy development.

Ottawa said over the past six months, it has been consulting with provincial and territorial governments, the Canada Electricity Advisory Council, Indigenous representatives, electricity providers and environmental organizations, among others.

Based on those consultations, Ottawa said it was considering new options for the clean electricity regulations.

Previously, the regulations would’ve seen facilities that produce electricity being subject to a performance standard (with some exceptions).

As a part of its consultations, Ottawa said almost all provinces and utilities provided feedback that such a standard would be difficult to achieve by natural gas-fired units equipped with carbon capture and storage that are “load following.”

Instead, it proposed shifting from a one-size-fits all rule for each power unit to a yearly emissions limit, customized based on the size of each unit.

The previous version of the clean energy regulations didn’t include a provision to purchase offsets should plants exceed their annual emissions limit. Under the new changes being considered, a unit could do so by a limited amount should it purchase offsets.

Jason Dion, senior research director for the Canadian Climate Institute, wrote in a statement that the revised design was a “welcome change” that will deliver more flexibility for grid operators. Dion was a part of the government’s electricity advisory council.

“Finalizing the regulations as early as possible would give policy certainty to grid operators, which would help with planning and investment,” said Dion, whose organization focuses on climate change policy research.

When asked by CBC News whether the changes would affect Canada’s climate goals moving forward, Guilbeault said the analysis is still ongoing in regards to what’s being proposed.

“There’s a number of options that have been put on the table. We won’t necessarily use all of them, but we certainly wants to hear people’s views on all of them,” he said.

“I’m confident that when we finalize the regulations, we will be very close to our initial target and that this very important piece of regulation will enable Canada to reach its 2030 goals, en-route to a 2050 net-zero country.”

The government is continuing to collect feedback on the new regulations until March 15 and intends to publish the final regulations later this year.

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