What happens next with the Saamis Solar Park project?

In August 2024, the city revealed its plan to buy the project to diversify its taxpayer-owned electricity businesses and prepare for a future of increased fossil fuel levies.

The city’s energy director Rochelle Pancoast said Wednesday the city is “definitely pleased” as it wasn’t “a guaranteed approval by any stretch.”

Now, with approval in hand, here’s what comes next.

Closing the deal

The city entered into a purchase and sale agreement as part of its effort to gain control of the solar farm.

“The next step on that agreement is to move into closing,” Pancoast said. That includes executing on a lease already defined in the agreement.

The city has two weeks to confirm the purchase of the project from DP Energy.

The exact costing of the transaction is confidential but council did sign off on a budget for $7 million for Saamis Solar Park.

“The purchase for this opportunity came from within that budget,” Pancoast said.

Recommendation to council

City staff will now carry out a deep dive into the viability of building a 75-megawatt solar farm before returning for a council decision.

“Once we confirm how best to proceed in terms of our staff recommendation, that recommendation will need to come to council,” Pancoast said.

Timelines are at the moment vague but Pancoast did confirm council won’t be waiting years.

However, there are deadlines attached to the existing permit approval from the Alberta Utilities Commission.

“I believe it was early 2027,” Pancoast said.

In order for the city to work within the timelines, it will first need to get approval from the commission to cut the size of the project down to 75 megawatts from the original DP Energy proposal of 325 megawatts.

The item could return to council within the next couple weeks for staff to get funding approval to kick off engineering work.

Public engagement

Critics of the solar park purchase application said there wasn’t enough transparency around the city’s plans for the project.

While some information is kept confidential for competitive reasons, Pancoast said staff also understood the need for the public to know what’s going on.

“We need to be mindful of balancing the importance of protecting commercial considerations for the benefit of the business — which benefits the taxpayers — and the need for public understanding and engagement,” she said.

“Ultimately, council will be the decision maker and we’ll need to engage with Council to determine what degree they’d like to engage beyond the required level under the AUC.”

The bigger picture

The City of Medicine Hat is already undergoing an era of major transition for the electricity and gas businesses it owns.

It’s currently considering recommendations to create a municipally-controlled, arms-length corporation to run the businesses, establishing a rate review board and selling off its gas production division.

Pancoast presented a broad energy strategy in 2024 that outlined the challenges the city is facing amid a decline in gas and electricity revenues amid a national transition towards renewable sources.

The solar park is a piece of the energy puzzle, said Pancoast.

“It certainly fits within that in terms of wanting to make sure that we are working in the best interests of serving our local electrical customers.”

by Eli J. Ridder