On December 6, 2024, the Government of Alberta (Alberta) approved its anticipated Electric Energy Land Use and Visual Assessment Regulation (Land Use and Visual Assessment Regulation) and Conservation and Reclamation Amendment Regulation, pursuant to Order in Council 369/2024 (Amended Reclamation Regulation, and collectively, the New Regulations). The Land Use and Visual Assessment Regulation came into force on December 6, 2024 and the Amended Reclamation Regulation will come into force on January 1, 2025.

The New Regulations codify the findings and recommendations from the Alberta Utilities Commission’s (AUC) Module A inquiry (the Inquiry). The AUC’s Inquiry Report provides summaries of the submissions and observations related to development of specific types or classes of agricultural or environmental land, the impact of power plant development on viewscapes and reclamation security requirements for power plants, development on Crown lands, and the role of municipal governments in the development and review of power plant applications.

Based on the Inquiry and resulting Report, on February 28, 2024, Alberta’s Minister of Affordability and Utilities (Minister) issued a policy direction letter to the AUC (the Policy Guidance) announcing the Government of Alberta’s six policy and regulatory changes to clarify the rules for future renewable energy projects and developments. A detailed discussion of these policy and regulatory changes are set out in a previous post here.

Electric Energy Land Use and Visual Assessment Regulation

Implemented under the Alberta Utilities Commission Act, the Land Use and Visual Assessment Regulation aims to ensure responsible construction and operation of “power plants”, defined as a facility for generating and gathering electric energy from any source in Alberta, while prioritizing the preservation of productive agricultural lands and viewscapes.

Subject to certain exceptions, the Land Use and Visual Assessment Regulation applies to applications for the construction or operation of power plants under AUC Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydro Developments and Gas Utility Pipelines (AUC Rule 007).

Notably, it does not apply to:

• the construction or operation of (i) small power plants (i.e. less than 1 MW), (ii) isolated generating units, and (iii) micro-generation generating units;
• the construction or operation of a power plant situated on a reserve; and
• amendments to existing power plant approvals that do not:
  • directly and adversely affect any person,
  • have any adverse environmental impact,
  • result in non-compliance with AUC Rule 012, and
  • require a change to the terms or conditions of any existing approval, permit or licence.

However, the Land Use and Visual Assessment Regulation will apply to material amendments to existing power plant approvals requiring amendments to the terms and conditions contained within the original AUC approval and those which requiring additional assessment to consider the impacts to stakeholder, environmental matters and noise.

AUC’s Bulletin 2024-25

The Land Use and Visual Assessment Regulation is supplemented by the AUC’s Bulletin 2024-25, issued on December 18, 2024, which provides initial direction on how the AUC will apply the regulation. Bulletin 2024-25 outlines new information requirements for power plant applications in Alberta. The AUC will incorporate the new information requirements in AUC Rule 007, with further consultation to the new information requirements expected in the new year.

The appendix of Bulletin 2024-25 provides detailed information requirements that applicants must satisfy in their new power plant and energy storage facility applications filed on or after December 6, 2024, pertaining to (a) agricultural land, (b) municipal land use, (c) reclamation security, and (d) visual impact assessments. These requirements are in addition to the existing information requirements under AUC Rule 007.

Overview of the Land Use and Visual Assessment Regulation

At a high level, the Land Use and Visual Assessment Regulation targets three areas:

A. agricultural land use and its coexistence with “wind power plants” and “solar power plants”;

B. irrigability assessments for land within the “White Area” as identified within the map annexed to Ministerial Order M.O. 71/85 dated May 7, 1975; and

C. development requirements and restrictions within buffer zones and visual impact assessment zones. The “buffer zones” are those described in Schedule 2, and “visual impact assessment zones” as described in Schedule 3 of the Land Use and Visual Assessment Regulation. A detailed map that distinguishes these zones is accessible here.

A. Agricultural Land Use and Coexistence with Wind and Solar Power Plants

Proponents seeking approval from the AUC for the construction or operation of a wind or solar project on privately owned “high-quality agricultural land” must submit an “agricultural impact assessment” as part of their application to the AUC. High quality agricultural lands include Class 1 and 2 lands, and Class 3 lands that are situated within a municipality listed in Schedule 1. Land classification is determined by the Land Suitability Rating System (the LSRS), which is a procedure for rating the suitability of land for agricultural spring-seeded small grains and hardy oilseeds. Classes are determined based on the lands degree of limitation for crop production. The appendix of Bulletin 2024-25 sets out the requirement of such assessment to be carried out by a qualified professional.

The required agricultural impact assessment must:

• detail the expected effect of the wind or solar project on agricultural productivity; and
• include measures demonstrating how the wind or solar project is designed to “coexist” with agricultural operations and land use, including both crops and/or livestock.

The appendix of Bulletin 2024-25 provides further details on the requirements that must be included in an agricultural impact assessment for wind or solar projects, including (a) soils component, such as the soil quality and quantity;  and (b) detailed description of the current and proposed agricultural activities, such as crop rotation or grazing regime, as well as an applicable measure of productivity for the agricultural activities on the project lands.

As per Bulletin 2024-25, for wind or solar project applications on high-quality agricultural lands currently before the AUC (i.e., filed before December 6, 2024), the AUC will assess the application and will correspond with applicants on public record if further information is required to comply with the Land Use and Visual Assessment Regulation.

In addition to preparing an agricultural impact assessment, there are ongoing reporting obligations set out in the Land Use and Visual Assessment Regulation. The owner or operator of a wind or solar project situated on privately owned high-quality agricultural lands, must, within 36 months from the commencement of operations, submit a report to the AUC confirming the agricultural productivity of the land. This report must be in accordance with any rules prescribed by the AUC with respect to the reporting and assessment of agricultural productivity following the construction of a power plant on the high-quality agricultural lands.

As the AUC is currently working on developing these ongoing reporting obligations for inclusion in AUC Rule 033: Post-approval Monitoring Requirements for Wind and Solar Power Plants, the AUC will in the interim, obtain information from wind or solar project applicants in the form of an interim information requirement on how applicants will evaluate and improve the performance of any proposed wind or solar project co-located with agricultural activities, as set out in the appendix of Bulletin 2024-25.

B. Irrigability Assessments

In accordance with Bulletin 2024-25, the AUC requires information on the current irrigation status of land for all proposed power plant types within the White Area, in order to determine on a case-by-case basis whether a more detailed irrigability assessment is required. If an irrigability assessment is required, it may include:

• an evaluation of water quality and availability;
• an analysis of proximity to irrigation infrastructure;
• the economic viability or feasibility of irrigation; and
• the opinions of the applicable irrigation district.

C. Buffer Zones and Visual Impact Assessment Zones

The Land Use and Visual Assessment Regulation establishes and designates buffer zones and visual impact assessment zones to ensure that “pristine viewscapes” are conserved. Notably, it provides that the AUC will no longer accept any applications under AUC Rule 007 for the construction or operation of a wind power plant in a buffer zone.

Subject to the exception stated above, a proponent applying for the construction or operation of a power plant within a buffer zone or visual impact assessment zone must submit a “visual impact assessment” as part of their application. As per Bulletin 2024-25, the AUC will require visual impact assessments for power plant applications currently before the AUC (i.e., filed before December 6, 2024), and will correspond with applicants on public record if further information is required to comply with the Land Use and Visual Assessment Regulation.

As further detailed in the appendix of Bulletin 2024-25, the visual impact assessment must include:

• an evaluation of the anticipated visual impacts on the buffer zone or visual impact assessment zone;
• visual simulations from key vantage points illustrating the potential visual impact on the proposed power plant; and
• proposed mitigation measures to minimize or offset any adverse visual effects on the buffer zone or visual impact assessment zone.

Conservation and Reclamation Amendment Regulation

The Amended Reclamation Regulation, enacted under the Environmental Protection and Enhancement Act, revises the existing Conservation and Reclamation Regulation. The Amended Reclamation Regulation updates the existing regulatory framework for wind and solar power plants.

1. New Code: The Amended Reclamation Regulation introduces the Code of Practice for Solar and Wind Renewable Energy Operations (the Code). Those carrying on the construction, operation or reclamation of a renewable energy operation listed in Schedule 2, Division 3 of the Activities Designation Regulation (the Specified Activities) will be required to comply with the Code.

2. Imposing Security Obligations: An operator must provide security with respect to registration for a Specified Activity, prior to the registration being issued.

3. Exemption from Security Obligations: An operator that (a) applies for registration for a Specified Activity generating electricity from wind power or solar power, and (b) provides security to a registered owner of the land under a surface lease, is exempt from the requirement to provide security.

We anticipate the Code and amendments to Schedule 2, Division 3 of the Activities Designation Regulation will be in force as of January 1, 2025, which will outline the various Specified Activities that the Code and Conservation and Reclamation Regulation will apply to.

Update on Development on Crown land and the Transmission Regulation

There have been no updates with respect to any policy changes with respect to Crown land development since our previous post. Development of renewable energy projects on Crown land will be considered on a case-by-case basis. We still expect that any resulting legislative changes to allow such development are expected in late 2025.

With respect to Transmission Regulation, the Minister indicated in a letter dated July 3, 2024 to:

• move away from the current zero-congestion transmission planning standard to an optimally planned transmission planning standard; and
• allocate new transmission infrastructure costs and all ancillary services costs based on cost causation principles.

On December 10, 2024, the Minister issued a letter to the Alberta Electric System Operator (AESO), outlining the government’s decisions regarding AESO's roles in transmission system planning and the development of the ISO tariff. The directives provided include:

(a) Implementing a cost allocation framework for new transmission infrastructure based on cost-causation principles by requiring new generators to contribute to transmission infrastructure costs by replacing the Generating Unit Owner's Contribution (GUOC) with an upfront and non-refundable Transmission Reinforcement Payment (TRP).

• These payments will have no upper limit, a floor of $0/megawatt, and will apply to both transmission-connected and distribution-connected generators.
• TRP rates will be calculated as a function of the suppliers' proximity to transmission capacity, their technical attributes and characteristics, and the cost of reinforcing the transmission system.

(b) Recovering line losses through a system-wide average starting on January 1, 2027.

(c) Requiring the AESO to file a needs identification document for the Alberta Intertie Restoration project by December 31, 2026, to restore the Alberta-British Columbia intertie to or near to 950 megawatts.

(d) Requiring the AESO to procure and maintain high levels of ancillary services to support full import flows on the Alberta-British Columbia Intertie and the Montana Alberta Tie Line.

(e) Requiring the AESO to increase the path rating of the Alberta-Saskatchewan Intertie as part of the McNeill Converter's end-of-life replacement to leverage the use of the existing transmission capacity in the region.

(f) Removing the competitive procurement requirement for upgrades or enhancements to the path rating of interties.

We expect the AESO will release its Long-Term Transmission Plan in the first quarter of 2025. In consideration of the Minister’s directives, this plan will describe how the AESO plans to develop Alberta’s electricity transmission system over the next 20 years.

Next Steps

As the Alberta electricity market is rapidly changing, our team at McCarthy Tétrault is closely following the legislative, policy and regulatory changes and will continue to provide updates as new developments are announced. For further information, please contact your McCarthy Tétrault trusted advisor or one of the authors.