Update on Alberta's Renewables Pause: AUC Inquiry and Interim Requirements

September 12, 2023

Written By Martin Ignasiak, Jessica Kennedy, Larissa Lees and Nathan Green

Approximately five weeks have passed since the Alberta government directed the Alberta Utilities Commission (AUC or Commission) to pause issuing new approvals for renewable electricity projects until at least February 29, 2024, which we discussed in our prior blog post, Alberta's Pause on Renewable Projects: What We Know So Far. The AUC recently provided further details regarding the government-directed inquiry to be held regarding the key issues of concern with renewable power projects in Alberta. The AUC further provided additional detail on how it will handle existing and new renewable project applications during the pause, including new interim filing requirements for all new power plant applications, including non-renewable power plant applications.

This post provides an update on these and other developments related to the renewables pause since it was announced on August 3, 2023.

AUC Inquiry and Anticipated Outcomes

On August 25, 2023, Minister Neudorf issued a statement regarding the renewables pause wherein he emphasized the government's desire to protect the reliability and affordability of the electricity grid as intermittent renewables continue to be added to the province's fleet of power generating stations. Concerns about affordability were not set out in the initial issues list, although, as we discussed previously, it is apparent that affordability issues are front of mind for applicable politicians and regulators.

The official issues list includes considerations with respect to:

1. The use of agricultural/environmentally sensitive land;
2. Impacts to Alberta's pristine viewscapes;
3. Reclamation security requirements for power plants;
4. Renewable project development on Crown lands; and
5. Impacts from the growth of renewables to the generation supply mix and grid reliability.

The AUC released Bulletin 2023-06 on September 11, 2023, indicating that it will implement a two-module approach for the inquiry.

Module A: Land Issues

"Module A" will address issues 1-4 listed above and the role of municipal governments in land selection for project development and review.

Participation in Module A will involve making written submissions, and an oral, in-person hearing in mid-December. The preliminary process schedule is reproduced below:

Module B: Grid Issues

The inquiry into issue 5 regarding impacts from renewables on the generation supply mix and grid reliability has been deferred to "Module B". No details have yet been provided on this module, which the AUC states will be issued shortly.

In his earlier remarks, Minister Neudorf stated that the government intends to change the "regulations" applicable to renewable power generation following the AUC inquiry, although he did not specify which regulations were in question. While regulatory amendments could be implemented through changes to the AUC's filing requirements (Rule 007) and/or Alberta Environment and Protected Area's directives,¹ changes to "regulations" could suggest more foundational changes to the regime, particularly in relation to the grid impacts described in issue 5.

The ultimate scope of the inquiry into this particular issue, which is complex and the subject of various existing initiatives, and associated possible outcomes remain largely unknown at this time.

Effect of the Pause on Existing and New Applications

On August 22, 2023, the AUC announced that it would continue to process applications to the greatest extent possible without issuing new approvals for renewable power plants prior to February 29, 2024, including new applications filed since the announcement of the pause. Project proponents may also request the AUC place their applications in abeyance during the pause period and inquiry.

This approach gives proponents maximum flexibility with respect to the level of effort and investment they wish to dedicate to the regulatory process amidst the uncertainty arising from the pause and associated AUC inquiry. It is also expected to minimize the extent of regulatory backlog that will necessarily result from the approval pause.

New Filing Requirements

The Commission released Bulletin 2023-05 on September 6, 2023, providing new interim information requirements for project proponents seeking to build new power plants of all varieties, including thermal and renewable projects. Although the Bulletin states that the filing requirements apply to applications filed on or after August 3, 2023, in at least some cases, proponents of power plant applications that were "in flight" as of August 3 have been asked to address these new filing requirements in supplementary filings.

The interim filing requirements address many of the same topics that will be the focus of the forthcoming AUC inquiry. Specifically, Bulletin 2023-05 requires proponents to provide information regarding: (1) agricultural land, (2) compliance with municipal requirements, (3) impacts on viewscapes, and (4) reclamation security. These new requirements are summarized below.

Overall, the interim requirements represent a significant increase in the level of detail required at the project approval stage. For instance, requirements to provide detailed construction information, such as the location and extent of surface grading, may prove challenging for proponents that have not yet finalized their construction plans. Moreover, the requirement to provide information on engagement with municipalities may suggest that specific issues that are often addressed in detailed planning stages as part of the municipal permitting process—which is often after receiving AUC approval—may need to be considered earlier in the project development process.

As the Commission noted in its Bulletin, it "regularly assesses its regulations, rules and processes to identify innovative and efficient regulatory solutions for Alberta." However, it is highly unusual for the AUC to implement new filing requirements without seeking stakeholder feedback in advance. It thus warrants highlighting that these new interim requirements are likely to be scrutinized through the upcoming AUC inquiry and subject to change in the future.

Agricultural Land

Project proponents will be required to provide information prepared or reviewed by a qualified agrologist regarding the following:

• the quantity of agricultural lands of each LSRS class to be impacted by a project;
• additional information regarding soil type and potential project-related impacts to soil quality, quantity (i.e., erosion), and hydrology;
• required earthworks during project construction and reclamation; and
• the potential to co-locate agricultural uses with the project.

Municipal Land Use

Project proponents will be required to confirm compliance with municipal land use policies and plans, justify any non-compliance, and describe engagement efforts with the applicable municipality(ies), including efforts "to modify the proposed power plant or to mitigate any of its potential adverse impacts to the municipality" prior to filing the application.

Impacts to Viewscapes

Project proponents will be required to "list and describe pristine viewscapes (including national parks, provincial parks, culturally significant areas, and areas used for recreation and tourism) on which the project will be imposed." The AUC has requested proponents to describe mitigation measures. 

No further guidance has been provided with respect to identifying or quantifying impacts to "pristine viewscapes", and it remains to be seen how the AUC will assess and weigh such potential adverse impacts in reviewing power plant applications.

Reclamation Security

Project proponents are now required to describe their proposed program for reclamation security, and provide specific information regarding reclamation standards, methods for calculating security amounts, and further modalities regarding the structure and timing of proposed security arrangements. The Commission had previously made similar requests of some project proponents on an ad-hoc basis.

We will continue to follow developments related to the renewables pause, AUC inquiry and the development of power projects in Alberta.

If you have any questions about the renewables pause, interim changes to Rule 007 and/or the government-initiated AUC inquiry into renewable energy projects, please contact one of the authors of this post or a member of the firm's Energy Regulatory practice group.

¹ Conservation and reclamation directive for renewable energy operations: https://open.alberta.ca/publications/9781460141359; 

Wildlife Directive for Alberta Wind Energy Projects: https://open.alberta.ca/dataset/2d992aec-2437-4269-9545-cd433ee0d19a/resource/e77d2f25-19dc-4c9e-8b87-99d86cd875f1/download/wildlifewindenergydirective-sep17-2018.pdf ;

Wildlife directive for Alberta solar energy projects: https://open.alberta.ca/dataset/6a71e752-8d72-4126-a347-e9f328279904/resource/527c6a99-4004-440c-8033-07872cb8adb0/download/wildlifedirective-albertasolarenergyprojects-oct4-2017.pdf

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