Cory Morgan: Ottawa’s Forceful Net-Zero Plan Threatens Alberta’s Deregulated Power Model

Electrical transmission lines in the middle of a canola field near Pincher Creek, Alta., in a file photo. Nalidsa/Shutterstock

Commentary

Not only do federal Environment Minster Steven Guilbeault’s proposed regulations on Canadian electricity generation run afoul of provincial jurisdiction per the Constitution, but they also threaten the only deregulated electrical power generation model in Canada.

Alberta’s grid has been unique in the nation since 1996 when Premier Ralph Klein implemented the Electric Utilities Act and invited private investment into the electricity generation market.

If Alberta were to comply with Ottawa’s regulations to meet the net-zero electricity generation targets for 2035, it very likely would have to move toward more centralized control of the grid. Canada’s only free-market electric generation system would then, in effect or by design, be no more.

Guilbeault’s push to impose federal regulations on the provincial electrical grid may be motivated by economic ideology as much as environmental. The federal government will never be able to fully control the country’s electricity capacity and costs if a province stubbornly holds out with a free-market system.

Seventeen firms supply electricity to the Alberta grid. The Alberta Electric System Operator manages the Power Pool, which is a centralized market for electricity sales and purchases in the province. There is a convoluted and highly regulated path for electricity to get from the power plant to a resident’s home. The generation of that power remains in the private sector though, which is now threatened through Ottawa’s planned regulations.

Reliability is a critical component in an electrical grid. Consumers don’t care how cost-effective or environmentally friendly a source of electricity is if it isn’t available when they need it. In harsh climates such as Canada’s, an unreliable electrical grid can be outright dangerous as people could lose heat during a cold snap. Wind and solar power sources are becoming more economically viable all the time—even if by taxpayer- or ratepayer-backed subsidies—but those sources are still hampered by unreliability. If the sun doesn’t shine or the wind doesn’t blow, they don’t generate energy.

Conventional energy generation systems using hydro, and gas-fired plants, use large, rotating generators. Those systems offer reliability as they can be ramped up quickly and on demand. They also store energy through inertia which can be used to support the system if there is a disturbance. With a broad variety of conventional generators feeding the grid, consumers rarely experience blackouts or energy shortages. Overbuilding solar and wind projects, which don’t have this inertia, can destabilize the balance, and it would be very costly to compensate for the lack of inertia.

If Alberta were to try to meet the emissions targets set out by Ottawa, it would have to vastly expand the solar and wind-generating capacity in the province, or regularly import power from neighbouring jurisdictions. Even if the province tripled the renewable generation capacity, it would remain vulnerable to power shortages if an extended cloudy and windless weather pattern set in. There are no large rivers in Alberta to dam. Gas-fired generation is the province’s prime source to back up the solar and wind systems. If the natural gas generation plants were relegated to providing only backup power, the private sector would have to flee.

Guilbeault has recognized the need for backup power generation and has said gas-fired power plants would be allowed to remain in operation, but could only operate for 450 hours per year. That is a ridiculous limitation, and it of course would render gas-fired power plants economically unviable.

If Premier Danielle Smith were to bend and comply with federal regulations, Alberta would have to either heavily subsidize gas-fired power plants to sit on standby, or the province would have to start building government-owned plants to fill the void. In either case, it would mean more infringement on the free-market system Alberta has enjoyed for decades—a happy side effect of the environmental regulations even if it wasn’t intentional, as far as people on the ideological left are concerned.

The proposed guidelines from the federal government would turn Alberta’s electricity generation and distribution system on its ear. It would require massive market intervention from the government and a restructuring of the entire system. It’s of little wonder Smith is so vehemently opposed to the plan.

Constitutionally entrenched provincial authority over electricity generation is not a matter of opinion or interpretation. It’s clear that Ottawa is overstepping its authority in regulating power generation.

The federal government has determined that preventing climate change is paramount and justifies its incursion into provincial authority. The Supreme Court backed that up when it ruled against the provinces after they challenged the carbon tax.

Premier Smith is not only fighting for provincial control of the electrical system but for the preservation of the only free-market generating system in Canada. The stakes are high, and Smith has drawn a deep line in the sand saying Alberta will never comply. At a recent press conference she said “we will go our own way,” and left that open to interpretation.

This battle is just beginning, and it’s about more than just claims of stopping climate change.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.