Pembina Institute

Alberta Utilities Commission fails to protect public interest with final coal plant approval

Approval weakens standards for greenhouse gas pollution in Alberta and could undermine upcoming federal coal regulations

Released: Aug. 10, 2011

Media contact: Chris Severson-Baker, Pembina Institute et al.

CALGARY — Today's final decision by the Alberta Utilities Commission (AUC) to approve a coal plant expansion proposed by Maxim Power Corp. represents a serious failure by the AUC to safeguard the public interest that could undermine upcoming federal greenhouse gas regulations, according to two of Canada's leading environmental groups.

Ecojustice and the Pembina Institute are considering their options in light of today's final approval. The two organizations recently filed a court challenge to appeal the AUC's interim approval of this plant, an approval blatantly timed to attempt to beat the deadline of future federal greenhouse gas regulations on coal-fired power (see background section below for more information).

Upon granting the interim approval for the Maxim project, the AUC indicated that it would issue a final approval "with reasons and any necessary conditions in due course."

But the decision issued today contains insufficient justification for the project. It also sets no conditions to address the plant's substantial greenhouse gas pollution.

"After helping this coal plant to beat the federal deadline, the AUC has now also loosened the standard for greenhouse gas pollution in Alberta," said Chris Severson-Baker, managing director of the Pembina Institute. "Approvals issued a decade ago included a requirement that the companies offset the plant emissions down to the level of a natural gas power plant. Today's decision is a 10-year step backward for the AUC and the province of Alberta."

When then-environment minister Jim Prentice announced his intention to adopt federal greenhouse gas regulations on coal-fired electricity that would take effect on July 1, 2015, he tried to allay concerns about the delayed implementation of the regulations by stating that "We will guard against any rush to build non-compliant coal plants in the interim."

"This is precisely the 'rush-to-build' scenario Minister Prentice anticipated, and promised to prevent," Severson-Baker said. "It's now up to Environment Minister Peter Kent to keep the federal government's promise and to ensure the AUC's approval doesn't undermine the pending federal coal regulations — benefitting one company at the expense of all Canadians."

"This final decision fails to provide any insight into the AUC's rush to issue the interim decision at the end of June," said Ecojustice lawyer Barry Robinson. "One can only assume that it was the AUC's intent to assist Maxim in avoiding the pending federal regulations. It's difficult to understand how that can be in the interest of all Albertans."

Robinson said that Ecojustice and Pembina are reviewing the final decision in more detail and will make a decision with respect to further appeals in the coming days.

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For more information, please contact:

Barry Robinson
Staff lawyer, Ecojustice
403-830-2032

Chris Severson-Baker
Managing director, the Pembina Institute 

403-899-7423

Background:

About the Pembina Institute-Ecojustice court challenge

In a June 7 letter to the AUC, Maxim asked the commission to forego a hearing and issue an approval by June 30 for a proposed 500 MW supercritical coal generator expansion of its existing Milner facility.

The AUC granted interim approval without a public hearing on June 30, noting Maxim's argument that it needed this quick approval to build its plant by July 1, 2015 — the deadline to avoid being subject to new federal regulations limiting greenhouse gas emissions from coal-fired electricity.

Further background on the AUC's decision to approve Maxim Power's new coal-fired power plant is available in this blog post by the Pembina Institute.

The Pembina Institute's letter to Minister Kent requesting federal action to stop the Maxim Power coal plant expansion is available online.

About coal power in Alberta and the proposed federal regulations

No new coal plants have been approved in Alberta for a decade. For the last two plants to receive approvals, the AUC (then called the Alberta Energy and Utilities Board) imposed environmental conditions on the plant operations, including a requirement to cut greenhouse gas emissions by approximately 50 per cent for the life of the projects.

If the federal government's proposed greenhouse gas regulations for coal require real onsite reductions in emissions, Maxim's greenhouse gas pollution could be nearly cut in half if it were to comply with the federal standards. This would have a greenhouse gas benefit of preventing about 1.5 million tonnes of emissions each year for the project's 45-year lifespan — the equivalent of taking 300,000 new vehicles off the road.

In contrast, if Maxim Power is able to evade the proposed federal regulations, it could earn itself a 45-year free pass to emit greenhouse gas pollution.


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