BUSINESS
08/11/2011 12:59 EDT | Updated 10/11/2011 05:12 EDT

Contested coal-fired power plant in Alberta gets final OK: opponents mull options

Flickr: That Angela

EDMONTON - A controversial coal-fired power plant in Alberta has received final approval without a requirement to lower its greenhouse gas emissions.

Others in the province operate under such restrictions and federal rules on power plant emissions are imminent.

"There are regulations in place regarding greenhouse gas emissions," Jim Law, spokesman for the Alberta Utilities Commission, said Thursday. "We don't go beyond what's in place and what's required today."

Calgary-based Maxim Power (TSX:MXG) received the go-ahead after the close of trading on Wednesday for a $1.7-billion expansion of its plant near Grande Cache.

The expansion will increase power output by 500 megawatts and use a nearby coal mine as fuel. But the plant will also produce about three million tonnes of greenhouse gases a year — roughly twice the carbon dioxide of an equivalent natural-gas-fired plant.

Environmental groups had already complained that the commission ignored important evidence when it gave conditional approval earlier this month. They said they had been denied the opportunity to testify before the quasi-judicial board.

They also suggested Maxim had requested an early interim approval in an attempt to have the expansion grandfathered when federal regulations come into effect limiting greenhouse gas emissions from power plants.

Chris Severson-Baker of The Pembina Institute said the commission's decision undermines federal policy, especially as Ottawa prepares to enact the new emissions rules within the coming weeks.

"This is a direct challenge of how the coal regulations are introduced," he said.

The institute had filed a request to appeal the interim approval. Severson-Baker said the environmental think-tank is now mulling its legal options, but is likely to ask leave to appeal the final approval.

"We would appeal the final decision, but the manner in which the interim decision was granted would be part of the basis of our appeal of the final decision."

Severson-Baker said Alberta's last two coal-fired plants were approved after they promised carbon offsets that would bring their emissions footprint in line with that of other natural gas-fired plants. He said the commission upheld those commitments in hearings last fall.

Allowing Maxim to build a coal-fired plant without any emissions requirements gives it an advantage over its competitors, Severson-Baker suggested.

Law said restrictions on the other plants are the result of promises the companies made during their regulatory hearings. He said Pembina wasn't given legal standing to address the Grande Cache application because it couldn't prove it was directly affected by the proposal.

Greenpeace pointed out Thursday that the company's donations to Alberta's governing Tories grew from $850 in 2007 to $4,250 in 2008, the year Maxim's application was filed.

Returns filed with chief electoral officer say those contributions were matched in 2009. They were increased to $9,250 in 2010 together with another $1,000 to the constituency association of Energy Minister Ron Liepert.

Maxim officials were not immediately available for comment.

Political contributions are common in Alberta's energy industry. Maxim donated only to the Conservatives.

"It sure looks like they were trying to get the governing party's attention," said spokesman Keith Stewart.

Law denied any suggestion the commission — a quasi-judicial board that reports to the Energy Department — was politically influenced.

"There's no input or interference into our process," he said.

Liepert also rejected the Greenpeace suggestion.

"I don't know who donates to the PC party. I don't even pay any attention to who donates to my constituency association," he said.