Premier Smith says Alberta preparing Sovereignty Act motion over federal emissions plans

Hours after the operators of the province's power grid warned that new federal electricity regulations could lead to blackouts, Alberta Premier Danielle Smith saidher government is preparing for the possibility of enactingher signature legislation in an effort to push back against Ottawa's planned emissions reductions.

"We're preparing a Sovereignty Act motion, and I'm hoping we don't have to use it. That's why we're at the table having these negotiations," Smith said, referring to arecently formed Alberta-Ottawaworking group focused on emissions reductions.

"But we are going to defend our constitutional jurisdiction to make sure that we develop our oil and gas industry at our own pace, and that we develop our electricity system so that it achieves the goal of reliability and affordability."

When asked at what point she would potentially invoke the act, Smith said she has continually said she would do so if Ottawa "comes through with emissions caps that are unconstitutional."

WATCH | Smith vows to fight net-zero grid plan:

Alberta will use Sovereignty Act over federal net-zero electric grid plan

11 months ago

Duration 2:01

Alberta Premier Danielle Smith says she's prepared to deploy the province's untested Sovereignty Act to fight the federal government's mandate for a net-zero energy grid by 2035. The Alberta grid operator says that without gas-fired power plants Alberta will face blackouts.

Mentioning Ottawa's2030targetsrequiring the oil and gas sector to cutemissionsby42 per centbelow 2019 levels, along with plans to make theelectricity grid net-zero by 2035, Smith said such plans were "not on."

"That's why we're continuing with the negotiation. If we can get aligned on 2050, then we won't have to build a fence to protect our constitutional jurisdiction. So, ball's in their court," Smith said.

Smith's Alberta Sovereignty Within a United Canada Act, which was passed late last year, has a stated purpose to direct provincial agencies to ignore federal laws deemed unconstitutional, though there has long been contention around how it would work in practice.

Earlier this month onCBC'sWest of Centrepodcast, Smith said she recognized thatinterim targets needed to be in place when it comes to emissions reductions.

AESO has concerns about 2035 plans

Smith had convened a press conference on Thursday just two hours afterAlberta Electric System Operator (AESO), the organization responsible for operating the province's power grid, said Ottawa's proposedclean electricity regulations(CER) pose a disproportionate risk and cost to Alberta compared to other provinces.

Alberta is reliant on natural gas generation both for baseloadand to meet peak demand, AESO president and CEO Mike Law told reporters on Thursday. Natural gas enables reliability and balances the intermittency of other assets, Law said.

WATCH | AESO president and CEO reacts to new federal emissions regulations:

Can Alberta transition to a carbon-neutral grid?

11 months ago

Duration 0:27

Alberta Electric System Operator president and CEO Mike Law says it's not feasible for Alberta to transition to a carbon-neutral grid by 2035.

He added that AESO's analysis indicatesthat the way the CER is currently written is going to create supply adequacy and reliability challenges for Alberta's power system from 2035 and beyond.

"Regardless of how much intermittent wind and solar Alberta has, the provincial grid will need sufficient dispatchable generation to meet the cold, dark, windless winter nights that we have in this province and form our peak load conditions," he said.

"Without that, in the worst-case scenario, large areas of Alberta could be left without power, creating significant public health and safety risks. Now to be clear, as the operator of Alberta's electricity system, we cannot and will not let that happen."

He also cautioned about the "criminal consequences" at play under the regulations as drafted.

"Individuals and organizations who do not meet those requirements or, in fact, break those future regulations requirements are faced with the potential of criminal action," Law said.

"It becomes exceedingly difficult for organizations, publicly traded entities, to justify both at their executive level and their board level to undertake highly expensive, long-term investment decisions that can expose individuals and organizations to criminal risk if they fail to meet these stringency obligations."

During aspeech on Wednesday hosted by the Canadian Club of Ottawa, federal Environment Minister Steven Guilbeaultcalled such characterizations a "fabrication."

"I keep seeing critics falsely claim that we are banning all gas generation by 2035 upon threat of jail time," he said. "This fabrication is not designed to inform, it is designed to inflame.

"But while fact-checkers play whack-a-mole with misinformation and insults around climate change, the cost of inaction keeps rising a debt to our kids and grandkids that too few politicians talk about."

Blackout threat 'misinformation': Guilbeault

During his speech, Guilbeaultalso said all new gas-fired electricity generation after 2035 would require carbon capture technologies with a few exceptions. During his press conference Thursday, Law expressed scepticismaround the viability of such technology in the short-term.

"Uncertainty with developing low-carbon technologies whether carbon capture, hydrogen, small modular reactors means Alberta is at a greater reliability and cost risk if cost and performance do not materialize as currently anticipated," Law said.

Guilbeault released the proposed CER regulationsin August. The provincial government has frequently referred to those targets as being too aggressive.

In a statement to CBC responding to Law's comments, Guilbeaultsaid the federal government wasaligned with AESO on the goal of achieving decarbonizationwhile maintaining affordability and reliability.

"These proposed regulations were designed with these objectives precisely in mind, and we have built in many flexibilities as a result.Given these are draft regulations, I very much welcome the AESO and Alberta government engaging with us on them," he said."I urge the AESO to publicly release its analysis that underlies these claims."

Guilbeault went on to say that any claim that building a clean electricity grid will lead to blackouts is "misinformation."

"The draft regulations are designed with at least 12 years before they come into effect, giving time to attract investment and adjust decision-making," he said.

Details should be released: U of C economist

Blake Shaffer, a University of Calgary economist who specializes in electricity markets, says it's difficult to comment on the assessment released by AESOon Thursday, as the details of their modelling work and the assumptions that go into it haven't been provided.

"For example, they used the term '2035 decarbonization scenario'to frame their costs-emissions implications. So I'm left wondering, did they model what the CER actually is? Because the CER is not a cliff at 2035. It will allow newer power plants to run until 2045," Shaffer said.

"I partly blame the federal government for labelling it 2035 net-zero, because actual details are not as such I would implore AESOto be transparent with their modelling, and that would really help with robust public debate."

Shaffer said he wasn't surprised to hear the assessment that the road ahead will be a formidable challenge, a takeaway he himself has written about to the federal government in the past. However, he was struck by the wording and what was presented Thursday by Alberta's electric system operator.

"It's meant to be this independent agency tasked with maintaining reliability for Alberta. When I hear things like there will be blackouts 12 years from now, that is a very unusual thing for a grid operator to threaten," he said.

"It sounded more like a message we would expect, and I think we were hearing just now, from the provincial government;that they want to get rid of the CER. The AESO's role is to respond to policy, not to assist in lobbying against it."

The Pembina Institute, a renewable energy think tank, also called for AESOto release its modelling on Thursday, writing in a statement that the operator's conclusion that the CER would lead to a reliability risk in 2035 was "a big claim to be issued in a two-page report."

"We ask AESO to release the full analysis that supports this claim, including its assumptions for growth in renewable energy, storage, transmission interties and natural gas with carbon capture," wrote Jason Wang, senior analyst with the Pembina Institute.

"The risk in working with this new conclusion is that it hamstrings Alberta's ability to plan for a transition to a low-carbon, affordable and reliable electricity system."

CBC News contacted AESO requesting a copy of the modelling. On Thursday afternoon, AESO provided a June PowerPoint presentation focused on the operator's long-term outlook, prepared for various stakeholders around the province.The purpose of the document, according to the presentation, was to share AESO's draft modelling and gather feedback before itfinalized its modelling and analysis.

After reviewing the document, Shaffer said it was good to see appropriate modelling of the CER within it. However, he said it was missing key details of the cost assumptions around new clean technology.

While the premier considers invoking the Sovereignty Act, her communications team is working to spread her message across the country. Anational campaign encouraging Canadians to voice concerns about the new emissions regulations is rolling out this week at a cost of approximately $8 million, according to a spokesperson with Rebecca Schulz, Alberta's minister of environment and protected areas.

That money will fund TV ads, web, social, billboard and another advertising.