By Mike de Souza, Postmedia News, Vancouver Sun, April 21, 2012
OTTAWA - Environment Canada weakened a draft version of regulations to crack down on pollution from coal-fired power plants following pressure from the industry, newly-released federal records have revealed.
Briefing notes prepared by the department in September said the proposed regulations offered the equivalent of an 18-month deferral on enforcement of the regulations "because of the interventions made by ATCO," an Alberta-based energy company.
The regulations, if finalized, are slated to come into force by July 1, 2015, but ATCO was seeking the deferral "to the end of 2016," to protect its existing "Battle River 3" generating unit.
"ATCO's views had an influence on the proposed regulations as published," said the briefing note, produced a few weeks after Environment Minister Peter Kent unveiled his plan.
Previously released federal records have also revealed that Kent was pressured by the Alberta-based Pembina Institute, an environmental group, to close potential loopholes, allowing companies to avoid the regulations for any unit built before 2015.
Kent said in September that the regulations were not intended to allow a new plant to launch operations before the rules came into force in order to avoid compliance. But at the same time, his department noted its concessions to the industry while describing the importance of the regulations for reducing greenhouse gas emissions linked to climate change as well as improving "air quality for Canadians for generations to come."
The briefing notes also suggest that ATCO was pushing for Environment Canada to extend a grace period of existing plants from 45 to 50 years, which was already more than a proposal of 40 years made previously by an industry lobby group, the Canadian Electricity Association.
ATCO officials could not immediately be reached for comment. But another company, Maxim Power, indicated that it had put plans on hold for a new plant because of uncertainty surrounding the government's regulations that are expected to be finalized before the summer.
"It's been characterized quite unfairly as a race to beat regs," said John Bobenic, president and CEO of Maxim Power, which is also based in Alberta. "Our investment in this is significant. You would strand some of our investment by implementing the regs as they've been proposed."
He added that the industry is also pushing for a longer recognized lifespan because of the government's "abrupt change" in policy away from a market-based solution and toward a regulatory approach that could force plants to shut down if their emissions are too high.
Under a market-based climate change plan, previously endorsed by the federal government, companies could achieve their goals by either reducing emissions, investing in other activities that reduce emissions, or buying certified credits from companies that are reducing emissions.
The current approach would not offer companies the same options for compliance apart from achieving absolute reductions in their emissions, and could translate into up to $40 million in stranded investments for a company like Maxim Power.
"It seems to be punitive to one industry in this (regulatory) sector by sector approach," said Bobenic, who said his company was previously prepared to take other actions, including the purchase of offset credits on a market to reach emissions reduction goals.
A spokesman for Kent said the government is still reviewing comments submitted during a consultation period and cannot speculate on elements to be included in the finalized regulations.
Tim Weis, director of renewable energy and efficiency at the Pembina Institute, said any further efforts to weaken the regulations would be favouring profits over public health.
"It's frustrating," Weis said. "At 40 years, we know these plants (have) been amortized. They've been paid for and beyond that, you're into almost windfall profits at that stage in the game and there's no reason we can't be moving to something else that's way less polluting."
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