Sask. govt says Ottawa’s net-zero plan would cost province $40 billion, job losses, increased power rates

The Government of Saskatchewan has submitted its response to the federal government’s public consultation on the proposed Clean Electricity Regulations (CER), expressing its reservations and urging reconsideration of the current proposals.

The proposed CER aims to establish a net-zero electricity grid across Canada by 2035. Ottawa’s clean electricity standards would require all electricity from renewable sources, like wind or hydro, or to be equipped with carbon capture technology.

Federal Environment Minister Steven Guilbeault has said he wants to work with the provinces and has disputed claims that the regulations would impose unfair costs or cause reliability problems.

However, SaskPower estimates implementing these regulations could significantly increase electricity rates for families, communities, businesses, and industries.

Crown Investments Corporation Minister Dustin Duncan said the federal government’s approach in an attempt to regulate Saskatchewan’s electricity system is unaffordable, unconstitutional, and technologically and logistically unattainable.

“The proposed Clean Electricity Regulations will jeopardize the reliability of Saskatchewan’s power grid and increase power rates to an unaffordable level,” he said. “The potential rate hikes in response to federal regulations will erode the viability of our industries, impact employment across sectors, and disproportionately harm lower-income households.”

The cost associated with the CER and federal coal regulations is projected to surpass $40 billion for Saskatchewan by 2035, with electricity rates expected to double.

To comply with the proposed regulations, SaskPower faces the challenge of expanding, replacing, and rebuilding over 100% of its current power generating capacity, which exceeds 5,400 megawatts, within the next 11 years.

“Saskatchewan has built its electrical grid over 95 years,” Duncan said. “If the proposed clean electricity regulations were to become law in 2025, it means in just 11 years, we would have to expand, replace, and rebuild more than 100 percent of our power generating capacity to meet regulatory requirements.”

Saskatchewan has already invested billions of dollars in transitioning to a net-zero future, incorporating solar, wind, biomass, natural gas generation, and increased hydro imports. However, the province asserts that it lacks a reliable alternative source of non-emitting baseload power to replace coal-and-gas-fired generation fully in the near term.

The proposed path forward hinges on the potential success of technologies currently in the pre-commercial stage, including nuclear Small Modular Reactors, carbon capture on natural gas, and long-duration utility-scale energy storage.

Duncan said the province isn’t against becoming net-zero but against the timelines laid out by the federal government.

“We’re not agreeing with net zero. It’s really just the timelines. What the CER simply says is we could not, as part of a bridge to 2050, we could not deploy technology we know works. It’s just that we can’t do it by 2035. 2050 is going to be hard work to get there.”

He said that if SaskPower has to meet the 2035 timeline, the ratepayers will feel the weight.

“The cost of renewing generation, particularly in these timelines, is going to be borne by the ratepayer. I think it’s 107 per cent increases in rates that are going to be required because of the CER and the coal regulations by 2035.”

Regarding the CER, Duncan said even tweaks or changes wouldn’t be satisfactory for the province.

“It’s really not a matter of making tweaks; this is fundamentally flawed from Saskatchewan’s perspective, and we’d be looking for a significant rewrite to the regulations rather than just some tweaks.”

Duncan said that while the provincial government doesn’t agree with the CER, that won’t stop the province from being open to collaboration with the federal government. Duncan said several things would have to happen for Saskatchewan to be close to hitting the 2035 goal.

“We would need some clarity and certainty in terms of what the federal government intends to do, if anything, on increasing timelines, improving timelines, and shortening the timelines when it comes to approvals of an SMR (small modular reactor),” he said. “We’ve asked for 75 per cent of the first cost for the first SMR. It’s really a commitment around federal funding and speeding up timelines for approvals. That would certainly go a long way towards helping us if we can’t, for whatever reason, push off the 2035 timelines.”

Premier Scott Moe outlined Saskatchewan’s plan for electricity generation on May 16, 2023. The plan commits to achieving net-zero emissions by 2050 while maintaining a diverse energy mix to ensure reliable baseload power and affordable customer rates.

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