Industry group takes fresh aim at Ottawa’s rules on clean electricity

The association representing Canada’s power utilities is stepping up its criticism of the federal government’s proposed Clean Electricity Regulations, as Ottawa prepares to release a final version of the new rules by the end of the year.

Electricity Canada is launching digital ads on Friday, two days before the start of a federal cabinet retreat it hopes to influence, alleging that the regulations will make power less reliable and cause ratepayers’ bills to go up.

The ads, being placed on social-media platforms such as X and LinkedIn, direct viewers toward a website that provides more details about the industry group’s concerns. Those include complaints that the regulations – which are aimed at stopping investment in new gas-fuelled power stations absent accompanying carbon-capture technology, and phasing out existing gas generation starting in 2035 – fail to account for varying regional needs.

The publicity campaign reflects a sharp shift in tone by the industry group, previously much more measured in its criticism, which Electricity Canada president Francis Bradley attributed to frustration with progress in talks with Ottawa about amendments to add flexibility to the draft regulations released last year.

And it points toward a contentious fall, as Prime Minister Justin Trudeau’s government resists calls to further water down its energy strategy.

Ottawa wants to ensure that power demand – expected to dramatically rise in the coming decades, as energy uses such as transportation and building heating increase – is met in a sustainable way.

The office of Environment Minister Steven Guilbeault pushed back on the complaint that the government has been unresponsive to concerns, while framing clean power as both an environmental and economic imperative, and noting more than $40-billion in federal spending commitments to help build non-emitting capacity.

“The level of consultation we have undertaken in the design of these regulations has been unprecedented,” said Oliver Anderson, Mr. Guilbeault’s communications director. “We all want to get the regulations right, so that they support provinces to deliver reliable, affordable and clean electricity future for Canadians.”

Ottawa has already signalled some willingness to soften its plans. Earlier this year, it put out a discussion paper that indicated the government was considering amendments to the initial draft, based on industry and intergovernmental feedback.

But Mr. Bradley said that at his last meeting with Mr. Guilbeault’s ministry, about three weeks ago, he was dismayed by the extent to which the regulations had been modified, and by indications that the government did not want to tweak them much further before finalization.

The main frustration, Mr. Bradley said, involves an emissions performance standard that is at the heart of the government’s plans. As originally drafted, it would require power-generating facilities to average less than 30 tonnes of greenhouse-gas emissions per gigawatt-hour annually to remain operational after 2035.

Possible changes floated by the government in its discussion paper included raising that threshold in recognition that even carbon capture might not enable sites to achieve the 30-tonne limit; tailoring limits to each unit in ways that would enable more efficient gas generators to operate longer than more polluting ones; allowing Crown corporations or utilities to pool the emissions of multiple generators to give them more flexibility; and allowing operators of generators with excess emissions to purchase offsets rather than shut them down.

Mr. Bradley said that updates provided by the government to Electricity Canada reflected some movement along those lines, but not enough.

”The kind of numbers that are still on the table will result in blackouts and brownouts” in parts of the country that can’t easily transition fully off fossil fuels, he said, suggesting that Alberta, Saskatchewan, Nova Scotia and Ontario would all be at risk.

In addition to the performance standard, Mr. Bradley said the extension of grandfathering provisions for existing gas units, as well as a loosening of the rules’ application for cogeneration (in which industrial sites use gas to produce both heat and electricity), are areas where the rules would still be too stringent.

Exactly how far apart the government and the industry group are on these matters is unclear. Mr. Bradley did not provide any specific numbers, citing a nondisclosure agreement for continuing negotiations.

But beyond the minutiae of those talks, Electricity Canada’s tonal change may indicate shifting power dynamics within the country’s diverse energy sectors.

Previously, including when it expressed cautious optimism about the government’s flexibility, the association appeared to be straddling its membership, which includes Crown corporations and utilities already providing fully non-emitting power.

The messaging in the new ads more closely aligns it with provincial governments and industries, particularly in fossil-fuel-rich Alberta and Saskatchewan, which have been strongly warning about affordability and reliability since the regulations were first proposed.