Federal clean energy regulations would cost Sask. much less than previously thought: report

Complying with Ottawa's proposed clean energy regulations wouldn't cost nearly as much as the government of Saskatchewan has said and will reduce emissions more than SaskPower's current net-zero plan, according to a new report.

Last August, Federal Environment Minister Steven Guilbeault released Ottawa's proposed Clean Electricity Rules. They are intended to pave the way to a net-zero power grid — not a fossil fuel-free grid — in Canada by 2035. 

Premier Scott Moe said at the time the proposals are "unachievable" for the province and would "at least double the power rates." SaskPower, which says it is independently on track to achieve net-zero by 2050, said Ottawa's proposal "isn't feasible technically, logistically or financially."

The government of Saskatchewan said in June it would refuse to comply with the regulations, which are slated to take effect on Jan. 1, 2025, after a report by the Saskatchewan Economic Impact Assessment Tribunal said the draft regulations would cost the province an additional $40 billion by 2035.

But a new report from the Canada Climate Institute, authored by University of Regina associate professor Brett Dolter, says it's possible and much cheaper for the province to comply with a revised version of the regulations Ottawa is considering — and which the tribunal's report did not account for at the time.

The possible changes, proposed after feedback from the provinces, "address those concerns and bring the parties a lot closer together to the same sort of vision," Dolter told CBC's The Morning Edition on Tuesday.

The revised regulations would save 30 to 40 megatonnes of carbon by 2050, or the equivalent of taking between nine million and 12 million cars off the road for a year, compared to the province's current plan, according to the report.

Saskatchewan originally balked at several of the original draft regulations, saying the future Aspen gas plant near Lanigan, for example, is not fitted with relevant technology but will not be commissioned soon enough to be exempt from the new rules.

Environment and Climate Change Canada said in February that after feedback, it was considering several changes, including "slightly" loosening proposed regulations and exempting gas plants that are already well underway from requiring carbon capture technology, even if they are not yet commissioned by the deadline.

That revised proposal would lead to additional capital expenditures $4 billion to $6 billion higher than under SaskPower's current plan by 2035, according to Dolter's report. But it would cost the province less in total by 2050, about $50.3 billion compared to $56.8 billion in the current scenario.

As a result, electricity rates would rise between 1.5 to 2.1 cents per kilowatt hour — or between six and nine per cent — by 2035 compared to the baseline rates, the report said. Dolter said that with increased tax relief from the Ottawa, which the province could advocate for, approximately $3 billion more could be recovered by 2035 and rates may hardly increase at all.

Dolter urged Saskatchewan to negotiate with Ottawa to attain the most flexible revisions of the draft regulations.

"We've got a lot of elections happening and then the federal election on the horizon," said Dolter. "We're all just kind of hoping that these climate change policies get across the finish line before that election. If they don't, I'm not sure what will happen."

Dolter said the revised regulations and modelling show the province and the federal government really aren't so far apart on how they want to decarbonize their energy grids.