The premier of Canada's oil and gas producing province Alberta said on Monday her government will consider creating a publicly-owned electricity company, in a bid to evade federal requirements to develop a net-zero power grid by 2035.
The move is Alberta's latest attempt to undermine the climate action plans of Liberal Prime Minister Justin Trudeau, which Premier Danielle Smith and other conservative politicians say are unrealistic.
Smith's United Conservative Party (UCP) government introduced a resolution in the Alberta legislature to study forming a province-run power corporation run under its Sovereignty Act, a previously unused law enacted last year to give Alberta a legislative framework to defy federal laws it opposes.
The resolution, once passed by the UCP majority government, would also order provincial authorities not to cooperate in implementing the Canadian federal government's planned clean electricity regulations, which aim to make the country's power grid net-zero on emissions by 2035. Such regulations would be costly to implement and could lead to power shortages, Smith said.
"It's simply too massive a risk for Albertans," Smith told reporters. "If we do not act we will end up with instability in our grid (and) we will either not be able to grow as a province or end up with brownouts and blackouts."
The resolution would instruct the Alberta government to study forming a corporation to produce electricity if private-sector generators determine it is too risky to operate such facilities because of the Canadian government's regulations.
The Alberta government company would be "generator of last resort," Smith said, meaning it would produce power only when supplies from private-sector companies are insufficient. The province currently generates most of its power from the private sector, unlike most others.
That power corporation would not recognize federal regulations as valid. It would build or buy power plants that run on natural gas that might otherwise not be able to operate past 2035 due to the regulations.
Canada already produces most of its power from renewable sources such as hydro and nuclear. Alberta, however, generates nearly half of Canada's emissions from electricity generation due to its reliance on natural gas.
Power generators such as TransAlta TA.TO and Capital Power (CPX.TO) have not committed to Trudeau's 2035 goal but some say they may reach net-zero ahead of Alberta's own 2050 target.
The federal government's electricity regulations are in draft form and scheduled to come into force on Jan. 1, 2025 after further consultation.
"We hope the federal government backs down," Smith said.
She said the fight may end up in court, stressing that regulating electricity falls under provincial jurisdiction under the Constitution.
Federal Environment Minister Steven Guilbeault was not immediately available to comment. On Sunday, his spokesperson said Ottawa has been collaborating in good faith with Alberta on the regulations.
In a legal challenge brought by Alberta, a court ruled in October against Trudeau's environmental assessment law for resource projects, saying it was too broad.
