Varcoe: Ottawa's new clean electricity rules simplify emergencies, but could still leave Albertans in the dark, province says

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What would have happened in the middle of last month’s prolonged deep freeze if the new proposed changes to the federal Clean Electricity Regulations (CER) were in place to reduce emissions from Alberta’s power sector?

With the electricity system stretched to the max on Jan. 13, it’s an interesting thought, as the provincial grid operator was scrambling to tap every available power source it could find.

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It was also within a half-hour of issuing orders for rotating blackouts.

On Friday, federal Environment Minister Steven Guilbeault announced proposed modifications to the draft CER, including some provisions on what happens during emergencies, to make the rules more palatable to industry and government critics.

One of the biggest critics remains the province of Alberta, which opposes the CER as being both unconstitutional and irresponsible.

It contends the regulation will potentially constrain supply from gas-fired generating units, leaving the province exposed to blackouts and price spikes if the grid has to attain net-zero emissions by 2035 — instead of its preferred timeline of 2050.

“The proposed regulations still put our province’s electricity grid at unacceptable risks,” Alberta Environment Minister Rebecca Schulz said in an interview.

“We’re not OK with Albertans being left in the dark and in the cold during the coldest months of winter. And Albertans recognized in January just how serious what the federal government is putting forward really is.”

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The CER has been a point of friction between the province and the Trudeau government over the past year.

Electricity generators in Alberta’s deregulated power market are also worried that the incoming rules could affect electricity prices, system reliability and their ability to invest in new generation.

Power
Power lines run into downtown with the Calgary Tower seen in the background. Photo by Brent Calver /Postmedia Network

In December, Enmax Corp. CEO Mark Poweska said he’s concerned the CER doesn’t recognize the regional differences in electricity systems across Canada.

“The emergency circumstances section of the proposed CER have been challenging for Alberta generation operators to comprehend and work with, and is another clear example of a policy that has not been able to contemplate the unique attributes of each jurisdictional situation,” city-owned Enmax also wrote in its feedback last November.

Some flexibility measures were built into the initial regulations unveiled by Ottawa last August.

Under those rules, gas-fired generating units commissioned before 2025 would be allowed to run unabated — without carbon capture and storage technology — for 20 years.

It also contained provisions for limited use of unabated gas generating units beyond 2035, capped at 450 hours annually.

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However, that is not nearly enough time or flexibility during periods of soaring demand and tight supply, according to the province and some industry players.

During consultations on the CER rules last summer, “many stakeholders observed that the provision in the draft regulations requiring the federal minister to review emergency exemptions after the fact could inhibit decisions to operate during emergencies,” the federal document released last week states.

On Friday, the federal environment department indicated it’s considering modifications.

It would shift the CER from an emissions intensity standard that’s applied uniformly to reduce emissions from fossil fuel-generated electricity, to an annual limit based on each unit’s capacity.

Units could exceed their emissions limit — to a specified maximum percentage — if the operator acquired greenhouse gas offsets.

Changes to regulations around cogeneration plants and rules for dealing with emergency periods are also being eyed.

Feedback on the latest proposals will be accepted until mid-March.

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“It’s a step in the right direction,” University of Alberta energy economist Andrew Leach said Friday.

“The really important bit is for people to see that the federal government is listening.”

Similarly, the Calgary Chamber of Commerce said it was encouraged by the federal consultation, although it is still concerned about a “one-size-fits-all approach” to the CER.

“It is positive, but it depends on how they follow through, which is still unclear,” said chamber CEO Deborah Yedlin.

Another change being contemplated would better enable system operators — such as the Alberta Electric System Operator (AESO) — to declare an emergency, such as during a cold winter night when demand is surging.

Emissions generated during the emergency by operating units, including older gas-fired plants needed to temporarily keep the lights on, wouldn’t count against its annual emission limits.

According to the new federal document, it could be extended “for a reasonable period of time (duration TBD) to enable operators to respond to emergencies.”

Schulz said her department’s understanding is the change would mean that instead of having to get the federal minister’s approval, her counterpart in Ottawa would only need to be notified for the emissions to be retroactively exempted.

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The alteration could help to streamline the regulations surrounding emergencies.

“It certainly clarifies that we wouldn’t have had to wait for political approval of those measures — that the generators would not have been concerned about, ‘Am I going to go to jail if I operate during this particular sort of declared emergency situation?’ ” said Leach.

Michael Powell with Electricity Canada agrees the new proposal would simplify these regulations.

“A shift on the emergency provision responds to a very specific concern. If there’s an urgent issue, like what we saw in Alberta . . . you have to know that you can run,” he said.

Yet, the latest proposal is also considering requiring the federal minister’s approval to continue operating under emergency circumstances beyond the exemption period, Schulz pointed out.

“That’s unreasonable. This is an area of provincial jurisdiction,” she added.

“They make it look like there are some big changes but then in the fine print, it still looks like they’re going to require the minister’s approval, which is quite unrealistic.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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