Environmental, Indigenous and Natural Resources Blog

On August 3, 2023 the Alberta Utilities Commission (“AUC”), the regulatory body responsible for approving power projects in Alberta, announced a pause on all approvals of power plants and hydro-electric developments that produced greater than one megawatt of renewable electricity. The Alberta government stated that the pause was needed to ensure an affordable and reliable electricity grid and to address landowner and municipality concerns.

On February 28, 2024, one day before the pause was set to expire, Alberta Premier Danielle Smith announced the following policy changes and new restrictions on renewable energy project development in the province:

• Renewable projects proposed to be developed on agricultural land will be evaluated with an “agriculture first” approach;
• Municipalities are automatically granted the right to participate in hearings before the AUC and may request recovery of costs for participating;
• No renewable generation development will be permitted on Class 1 or Class 2 land, as defined in the Alberta Land Suitability Rating System, unless the project proponent can demonstrate the ability for both crops and/or livestock to coexist with the renewable project;
• Reclamation costs, in amounts determined by the government, must be posted via bond or security; and
• Protected areas and “pristine viewscapes” (as designated by the government) will have a minimum buffer zone of a 35 km around them, within which no new wind projects are permitted, and other proposed renewable developments may be subject to a visual impact assessment before approval.

The Alberta government announced further upcoming changes to projects on Crown land, expected to come in late 2025. For now, consideration of these projects will be on a case-by-case basis. The government has also stated there will be changes in the coming months as to how the transmission costs of renewable projects are allocated.

As of March 1, 2024, the AUC can recommence issuing decisions on power plant applications affected by this pause.

Considerations:

The new policies and restrictions will not apply retroactively to existing projects, however the AUC stated that further process may be required for applications currently before the AUC depending on the circumstances of the application and sufficiency of the existing record. Applications must satisfy existing requirements set out in AUC Rule 007 as well as the Interim Rule 007 requirements until further notice. The AUC is expected to provide greater clarity and direction on project revisions.

A significant degree of uncertainty exists for investors in the Alberta renewable sector until more detail is provided by the Government of Alberta regarding:

• What constitutes a “pristine viewscape”;
• How an applicant can demonstrate that a proposed project co-exists with agriculture and/or livestock uses;
• What the policy and legislative tools regarding future reclamation costs will be, how these costs will be calculated; and
• How the proposed changes to the current allocation of transmission costs may impact future projects, in particular how much a project proponent may be required to pay to get connected to the Alberta Interconnected Electric System.

If you have questions regarding the development of renewable energy in Alberta, please contact Shailaz Dhalla, Molly Bannister, Karen MacMillan, Andrew Robertson, or a member of our Environmental & Regulatory group.