You may recall my post from last October criticizing Albertan power generator Capital Power for trying to back out of an obligation to offset emissions from its 495 Genesee 3 coal-fired generating station by 50 per cent, giving it an emissions profile roughly equivalent to a natural gas plant. It agreed to this offset back in 2001 so it could get permission from the regulator to build the plant. When the plant was approved, it was made a condition of the project, and a similar condition was imposed on TransAlta’s Keephills 3 coal plant that followed, which is rated 450 MW. TransAlta is half owner of Genesee 3. Capital Power says the condition is unfair and that it should be let off the hook.

Today, the Alberta Utilities Commission rejected Capital Power’s application to have the condition removed, as the Edmonton Journal explains here. This is good news in a province far too dependent on coal-fired electricity.

NOTE: This post has been changed from an earlier version for clarification.

In 2001 Alberta’s EPCOR Utilities Inc., which is today called Capital Power, wanted so much to build a new coal plant in the province that it committed, voluntarily, to offset emissions from the proposed 495 MW Genesee 3 facility by 50 per cent. It did this to win public support and support from regulators. Alberta’s utilities commission approved the project but, as part of its approval, it made the 50-per-cent reduction promise a requirement. The commission created a similar requirement for TransAlta’s Keephills 3 coal plant that followed, which is rated 450 MW. TransAlta is half owner of Genesee 3 as well.

Now, Capital Power is trying to weasel out of its obligation. It has applied to the commission to have the legal requirement removed. It would be bad enough if the commission allowed this, but most certainly if Capital Power got its way TransAlta would be asking for the same relief on Keephills 3.

“They’re basically saying it’s not fair,” said Chris Severson-Baker of the Pembina Institute, which is urging the commission to reject Capital Power’s request. Baker has the more detailed story here.

This is truly an unbelievable request. More than ever we need to move forward on emission reductions, not take steps backward. Alberta already has a sullied reputation when it comes to the tar sands and greenhouse-gas emissions. Reducing emissions from coal-fired plants — or at least offsetting them — is one way Alberta can try to buffer the emissions impact of the tar sands.

Both Capital Power and TransAlta know that the federal government will soon create regulations that require all new coal plants to meet the emissions profile of an equivalent-sized natural gas plant, and not through offset purchases, but through carbon capture and storage technologies. Genesee 3 has been operational for three years, and Keephills 3 will be coming online soon. They’ll be two of the newest coal plants in Canada and, by coming online before the federal rules, won’t have to comply until they reach the end of life in 40 years or so (though a future national cap-and-trade regime would presumably apply). If they can shake free of their commitment to the Alberta utilities commission it will mean more profits but more emissions as well.

I should say that Capital Power is arguing it should be permitted to break free from its earlier obligations so it can be subject to new provincial climate change pollution rules introduced a few years ago. The company says all power plants should be treated fairly and consistently and that its original voluntary commitment was not a permanent commitment, but that will be a matter to be decided by the commission. If the commission agrees, however, it will mean the 50-per-cent offset that Genesee 3 was once required to meet will fall to just 2 per cent under the province’s weaker rules and only reaching 12 per cent over the next six years. That’s a nice trade-off for Capital Power.

Letting them pull this kind of “bait and switch” would add significant GHGs in a province already struggling with an image problem. To cut Capital Power some slack would be an insult not just to Albertans, but to all Canadians.

Saw a few stories today, based on an article that appeared in the Globe and Mail, suggesting the federal government has drawn the line when it comes to coal-fired power plants, or at least the kind of plants that don’t capture and permanently store their CO2. Canada’s federal Environment Minister Jim Prentice apparently met last week with the nation’s top power company executives and made the government’s intentions clear. According to the Globe, “Under Ottawa’s proposal, power companies would have to close their coal-fired facilities as they reach the end of their commercial life, largely over the next 10 to 15 years. The companies would not be allowed to refurbish the plants to extend their usefulness or replace them with new coal units, unless they include technology to capture the carbon dioxide and sequester it underground.”

Does this amount to a moratorium on dirty coal? It seems like it does, but the targets are pretty soft and you can bet this government will be so flexible with industry — particularly in Alberta and Saskatchewan — that the effect of this moratorium won’t be felt for a least two decades. And that, unfortunately, is too late to matter. Just how the feds will define “end of useful life” or “refurbishment” can have a dramatic effect on the outcome. Coal plants don’t need major refurbishments. Like refineries, they are in constant repair and maintenance mode. Like an old car, as long as you keep repairing stuff when it breaks it can run forever, really. So you can expect existing coal plant owners, such as TransAlta, to drag this out for a long time. Even worse, TransAlta — the country’s worst polluter – is still building new coal plants, hoping to slide them in under the bell. This includes two projects totalling 500 megawatts that will be in service next year. Those plants could run for 40 or 50 years!

What we need is a meaningful price on carbon, and a hard moratorium that requires carbon capture retrofits by a certain date or a conversion of paid-for coal plants so that they can burn natural gas or biomass. Ontario has committed to phasing out coal power or converting to biomass/natural gas by 2014, but Alberta and Saskatchewan are heading in the opposite direction. (more…)