Renewables Moratorium Shifted not Lifted: AUC’s Module A Renewables Inquiry Report Released to the Public

19 Apr Renewables Moratorium Shifted not Lifted: AUC’s Module A Renewables Inquiry Report Released to the Public

Following the release of the Alberta Utilities Commission’s (AUC) Module A report, the moratorium on renewable energy development has ended.  However, in light of the Government of Alberta’s (GOA) response to the report, there are still significant restrictions on the continued growth of the renewables industry in Alberta.  Firstly, the GOA has given indications of new policy direction but there is much to be done in terms of policy, legislative and regulatory changes creating an uncertain investment environment.  Secondly, there are now extensive restrictions on renewable developments on Class 1 and 2 agricultural lands and lands with pristine viewscapes.  In light of the restrictions and unresolved policy gaps, the moratorium has only been shifted and not wholly lifted.

Background

In August 2023, the GOA unexpectedly placed a moratorium on the issuance of approvals for renewable energy projects. It directed the AUC to conduct an inquiry into the “ongoing economic, orderly and efficient development and operation, in the public interest, of electricity generation in Alberta”.[1]   The AUC divided the inquiry into 2 modules: Module A considered land impacts issues and Module B considered electricity grid issues.  The report for Module A was completed and submitted to the GOA on January 1^st and was made publicly available on March 13^th. Module B is still ongoing.

What does the Module A Report Say?

Module A considered land impact issues related to development on specific types of agricultural or environmental land; the impact of power plant developments on pristine viewscapes; reclamation security requirements; and development on Crown lands.  It also considered the role of municipal governments in the development and review of power plant applications.

The report provides the AUC’s observations on information and feedback gathered through the inquiry process.  It also provides AUC commitments to change its practices and procedures and identifies options for legislative or policy changes that could be adopted by the GOA. Briefly, the AUC commitments and legislative/policy options outlined in the report are:

Role of Municipal Governments 

• AUC commitments include automatically granting municipal participation rights and eligibility to request cost recovery; and undertaking a review of its Rule 007 related to municipal submission requirements and clarification of consultation requirements.
• It was determined that changes to section 619 of the Municipal Government Act were not necessary.

Agricultural and Environmental Land 

• AUC committed to exploring requirements for project proponents to provide soil field verification (for assessing agricultural land class) earlier in the application process.
• Legislative and policy options identified include assessing the value of a province-wide integrated multi-criteria tool to identify and evaluate agricultural land; develop an agricultural land directive to reduce land impacts; and enhance regional planning to guide areas for development. The AUC indicated that the GOA could place restrictions on certain classes of agricultural land. Rather than imposing restrictions, an alternative option is that AUC processes could be enhanced to increase municipal involvement and focus on agricultural land preservation.

Crown Land 

• There were no AUC commitments specific to development on Crown lands.
• Legislative and policy options identified include determining whether a policy regarding power plant development on Crown land is worth implementing. The AUC also identified the alternatives of relying on existing processes for Crown dispositions and review of power plant applications by the AUC, or implementing a new two-step land disposition process with continued reliance on existing AUC processes for review of applications. The two-step land disposition process would grant a preliminary investigation license, followed by a second license of occupation to complete work.

Pristine Viewscapes

• The AUC committed to enhancing its existing visual impact assessment requirements within Rule 007.
• Legislative and policy options identified include GOA guidance on valued viewscapes and the definition of “no-go” restricted viewscape zones.

Reclamation Security 

• The AUC committed to reviewing Rule 007 requirements regarding proponent reclamation and security funding obligations.
• In the event a reclamation security regime is to be implemented, legislative and policy options identified include setting key outcomes, principles and parameters for the regime. Also, there should be a range of options available for the government to ensure the proponent funds all reclamation costs (considering things like security types, salvage value, time triggers, exemptions and so on).

The GOA’s Response to the Module A Report

On February 28^th, the GOA issued a summary of policy changes in response to the Module A report.[2]  Concerning municipalities, the GOA just restates the AUC commitments (participation and cost recovery rights, and review of municipal submission and consultation requirements).  Regarding renewable development on agricultural lands, the GOA has indicated that:

• The AUC will take an agriculture-first approach when evaluating the best use of agricultural lands proposed for renewable development.
• Renewable development will no longer be permitted on Class 1 and 2 lands unless it can be demonstrated that both crops and/or livestock can coexist with the renewable project.
• The GOA will “establish the tools necessary to ensure Alberta’s native grasslands, irrigable and productive lands continue to be available for agricultural production.

Concerning Crown lands, the GOA indicates that any renewable development will assessed on a case-by-case basis.  Further, before any policy changes are implemented for renewable projects on Crown lands, meaningful engagement is necessary and no changes will come into effect until late 2025.

To protect viewscapes, the GOA indicates that a 35km buffer zone will be established around protected areas and other “pristine viewscapes” designated by the province.  New wind projects will not be permitted within the buffer zones.  Other proposed developments within buffer zones may be subject to a visual impact assessment.  The GOA has issued a draft map of Viewscapes and Visual Impact Assessment Zones. This map indicates that there are buffers around the Rocky Mountains (Eastern Slopes), and some (but not all) UNESCO Heritage sites and provincial parks.

The GOA has indicated that developers are responsible for reclamation costs via bond or security either directly to the government or to the affected landowner.  Finally, there are forthcoming changes to Alberta’s Transmission Regulation with respect to the allocation of transmission costs (presumably, this is pending completion of Module B).

Why is the renewables moratorium shifted, not lifted?

The good news is that the renewables moratorium has been lifted, and the AUC can recommence accepting and processing applications for new projects.  The AUC is already issuing renewable project decisions:  for example, the Rainer Solar Farm application was denied on March 22^nd (for impacts on native grasslands) and the Camrose Solar Project was approved on March 25^th.

The bad news?  While we have indications of the policy directions that the GOA intends to take, much is still up in the air.  There will be policy, legislative and regulatory changes needed to implement these directions. This degree of law and policy uncertainty does not create a highly inviting space for the development of new renewable projects.[3]

Even more bad news?  It appears that a good amount of land, particularly in Southern Alberta, will not be open to wind power developments.  Firstly, there are restrictions on renewable developments on Class 1 and 2 agricultural lands.  While the ELC agrees that the conservation of agricultural lands is important, there should be a comprehensive provincial policy in place to avoid the conversion of prime agricultural lands from all development pressures (including urban sprawl and industrial development).  Renewable energy developments should not be singled out.  Secondly, extensive buffers are being put into place to protect pristine viewscapes.  As has been pointed out, other activities (mining, oil and gas, logging, and development) are already occurring within these areas.[4]  And there is no indication that industries other than renewable energy developments are to be subject to the same requirements around agricultural lands or pristine viewscapes.

Conclusion

Certainly, renewable energy developments can have negative impacts especially if they are located on sensitive landscapes such as native grasslands or critical habitats of species at risk.  The ELC agrees that the protection of sensitive landscapes and critical habitats is an essential environmental objective in light of the global biodiversity crisis.  There should be a clear provincial policy in place protecting such areas from development (again, not just renewable energy developments).

The lack of a current reclamation security regime for renewable energy development is also an issue as it can potentially lead to sites needing cleanup with no solvent person to do so.  These are issues that need to be considered and addressed as the renewable energy industry develops.  However, these same issues exist (and to a much greater degree) in other industries.  The renewable energy industry – especially given its undeniable role in climate change mitigation and the necessary transition to a low-carbon economy – should not be singled out.

Cover photo: Windmill on grass field during golden hour by Karsten Würth on Unsplash

Endnotes

[1] Province of Alberta, O.C. 171/2023 (August 2, 2023), online: https://kings-printer.alberta.ca/documents/Orders/Orders_in_Council/2023/2023_171.pdf.

[2] Also see Government of Alberta, Backgrounder: Alberta’s Renewable inquiry and the related pause (February 28, 2024), online: https://www.alberta.ca/system/files/au-backgrounder-albertas-renewables-inquiry-and-related-pause-20240228.pdf and Minister of Affordability and Utilities, Letter to Alberta Utilities Commission (February 28, 2024), online: https://www.alberta.ca/system/files/au-minister-neudorf-letter-to-auc-20240228.pdf.

[3] See Nigel Bankes and Martin Olszynski, “Premier Smith Converts a Legal Pause on Renewable Energy Projects into a De Facto Moratorium of Uncertain Duration” (March 1, 2023) Ablawg, online:  https://ablawg.ca/2024/03/01/premier-smith-converts-a-legal-pause-on-renewable-energy-projects-into-a-de-facto-moratorium-of-uncertain-duration/.

[4] See for example, Drew Anderson, “Mines, logging, sprawl – but no wind turbines. Here’s what Alberta is still doing in ‘pristine viewscapes’” (March 21, 2024) The Narwhal, online: https://thenarwhal.ca/alberta-renewable-wind-energy-buffer-zones/.

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