The topic of renewable energy in Alberta recently made major headlines across the province and country due to a surprise announcement from Alberta's Minister of Affordability and Utilities ("Minister").1 On August 3, 2023, the Minister announced that the Alberta Utilities Commission ("AUC") was being directed to immediately pause the issuance of approvals for new renewable electricity projects, citing a need to review policies and procedures currently in place relating to development of these projects ("Policies") (Creating certainty for renewable projects | alberta.ca). The approval of power plants and hydro developments that produce renewable electricity and are greater than one megawatt in project capacity are paused until February 29, 2024 ("Approval Pause"). The Approval Pause and pending policy review is a direct result of a letter written to the Alberta government from the AUC2, expressing concerns from municipalities and landowners regarding the rapid pace of renewable development and responsible land use.

The Approval Pause was implemented under the new Generation Approvals Pause Regulation ("Regulation"). This legislation removed the ability of the AUC to approve any projects referred to in sections 9 or 11 of the Hydro and Electricity Energy Act which produce renewable energy. The Regulation applies to projects that have a planned project capacity of over one megawatt, but does not apply to small power plants, isolated generating units or micro-generation generating units.

During the Approval Pause, the AUC will conduct a review of the Policies for renewable electricity development. Upon completion of the review, and by no later than March 29, 2024, the AUC is to submit a report to the Minister. The review will focus on the use of agricultural and public land for wind and solar projects, land reclamation of renewable sites and the role of municipal governments in choosing the land for project development. Specifically, the AUC is to inquire into the following issues:

  1. Development of power plants on specific types or classes of agricultural or environmental land;
  2. The impact of power plant development on Alberta's pristine viewscapes;
  3. Mandatory reclamation security requirements for power plants;
  4. Development of power plants on lands held by the Crown; and
  5. The impact of the increasing growth of renewables on Alberta's generation supply mix and electricity system reliability.3

Shortly following the Minister's announcement, the AUC confirmed it will initiate an inquiry (2023-08-03-Announcement (auc.ab.ca)) to consider these issues. First, however, the AUC is seeking stakeholder input into how the AUC should address applications for renewable electricity projects that are currently before the AUC and that are impacted by the Approval Pause. Specifically, the AUC has asked stakeholders to comment on three options for how the pause should be implemented:

  1. Complete abeyance: The AUC does not accept new applications during the pause period and all existing excluded applications will be placed in abeyance during the pause period with the AUC taking no further steps to complete their record or issue decisions.
  2. Partial abeyance: The AUC does not accept new applications during the pause period. For all existing applications with an incomplete record, the AUC process will proceed to the point where the written evidence is complete, applications will then be placed in abeyance until the pause period expires. The AUC will not hold any public hearings for these applications during the pause period. Existing applications with a complete record will be placed in abeyance until the pause period expires. "
  3. Approval hold only: The AUC continues to fully process new and existing excluded applications without issuing any approvals until after the pause period.

Stakeholders have until August 18, 2023, to provide comments on the options and propose any other potential options they suggest using during the Approval Pause.4

Timing of the Approval Pause

The timing of Alberta's decision to implement the Approval Pause is a surprise given the rapid growth and future outlook of the province's renewable energy sector. Very recently, in July 2023, Alberta received $160 million of renewable funding from the Federal government. This funding was earmarked to build nine solar energy projects resulting in 163 megawatts of solar power and 48 megawatts of battery storage capacity.5

Pending AUC Inquiry and Uncertainty

The issues raised for consideration and related policy review in the pending AUC inquiry are far reaching. Each of land use; municipal planning; environmental and visual impacts; Crown land use; reclamation security; and the growing share of renewable electricity in Alberta's supply mix and related impacts to system reliability, are individually important and material issues that will likely see a wide range of views presented to the AUC by an equally wide range of stakeholders. In the result, the challenge facing the AUC will be to consider and weigh the diversity of issues and views so as to provide findings to assist the Minister in policy development for renewable electricity projects going forward.6 The timeline the AUC has been provided to complete this important work is equally challenging.

Although the Approval Pause may result in welcome regulatory direction and certainty for some stakeholders going forward. The uncertainty created by the Approval Pause, associated upcoming AUC inquiry and related report, as well as what steps or policies the Minister may implement following receipt of the AUC inquiry report, is obvious and has serious implications for continued renewable energy development in Alberta. Particularly in light of Alberta, up until the Approval Pause, being viewed as a positive and strong renewable energy development environment.

Footnotes

1. https://www.alberta.ca/release.cfm?xID=887605547987E-EABF-5E23-DFF2C9F72DB845E6

2. https://www.alberta.ca/external/news/AUC-Letter-to-Minister-Neudorf-July-21-2023.pdf

3. OIC 171/2023.

4. Instructions for providing submissions can be found in the AUC announcement dated August 3, 2023: https://media.www.auc.ab.ca/prd-wp-uploads/News/2023/2023-08-03-Announcement.pdf

5. https://www.canada.ca/en/natural-resources-canada/news/2023/07/minister-wilkinson-announces-over-160-million-for-9-alberta-solar-energy-projects-that-will-create-hundreds-of-good-jobs.html

6. The AUC most recently conducted a similar inquiry in relation to hydrogen blending in Alberta natural gas distribution systems (HydrogenInquiryReport.pdf (auc.ab.ca)). See our blog ([here]).

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