Brian Zinchuk is editor and owner of Pipeline Online
If you squint really hard, you can see two pickup trucks at the base of the wind turbine. And the average output of wind turbines in Alberta the morning of June 9 was less than a Generac generator, insert, which would fit in the box of one of those pickups. Generac image via HomeDepot.ca
Saskatoon energy lawyer Chad Eggerman does not think highly of Saskatchewan’s stance on the Clean Electricity Regulations, namely that this province will not follow them.
On behalf of his firm, Procido LLP, of which is he founding partner, Eggerman provided one of the submissions to the Economic Impact Assessment Tribunal which looked into the CER. His entire submission is reproduced further on in this story, verbatim.
On June 26, Eggerman posted this response on X:
This Press Release (saskatchewan.ca/government/new) issued today by the Government of Saskatchewan stating they will not comply with the Federal Clean Electricity Regulations requires a few clarifications:
No. The Government of Saskatchewan must comply with Federal law. Upholding the rule of law is a fundamental tenant of democracy and must continue to be a prerequisite for any legitimate government in Canada.
No. This Report is not accurate. It is outdated and of questionable use, as it has only looked at the old and out-of-date version of the Regulations and did not analyze the most current version of the CER Regulations which are to be published later this year. The new CER Regulations include many amendments to enhance the flexibility for provincial operators to continue to ensure reliable and affordable electricity, which are simply not addressed in this Report.
No. The onus is not on the Federal government to prove anything to Saskatchewan. The Supreme Court of Canada has already ruled that the Federal government can regulate greenhouse gas emissions, notwithstanding exclusive provincial powers provided for in the Constitution. The Court previously confirmed that “climate change is an existential threat to human life and must therefore be approached in Canada as a matter of national concern through coordinated national and international efforts.”
No. This Report does not provide “irrefutable, independent evidence” that the CER will have a substantial negative impact on the “economy and way of life” in Saskatchewan. In fact, the Report seems to have ignored a very important and obvious financial benefit from the CER – the savings from reduced fossil fuel costs. The Report further seems to have omitted to consider and calculate the significant costs of doing nothing to mitigate the effects of climate change.
In December of 2023 I wrote a letter to the Minister of Energy and Resources and the Chair of the Economic Assessment Tribunal advising that the Tribunal should not only consider the costs of decarbonizing electricity generation in Saskatchewan when reviewing the CER, but also consider the economic benefits. Unfortunately, it appears my advice was ignored.
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Procido LLP’s webpage says, “Procido LLP believes in an all-inclusive view of energy – different sources and types of energy have or have had their place in the world. Procido LLP is non-partisan. We believe that the politicization of energy has created risks for all stakeholders in the energy industry.
“Our organization is non-partisan and we work together with clients to identify and avoid political risks. We believe providing useful legal advisory services to clients in the energy industry requires us to treat politics as a risk which should be mitigated in order to execute the necessary agreements to move projects forward.
“The only exception to our non-partisan perspective on energy projects is when we are acting for Indigenous groups. We accept and advocate for those Indigenous groups that may not be sure whether a particular project is in the best interest of their peoples. We recognize this is political in nature, but we are happy to assist Indigenous groups to structure participation (or not) in energy projects according to whatever their wishes are which varies significantly between Indigenous groups.”
That same website notes Eggerman founded Prodico LLP in 2022.
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Tribunal submission
Here is Eggerman’s submission to the tribunal, verbatim:
I am a Partner at law firm Procido LLP in Saskatoon practicing energy law. I have acted for coal miners, oil and gas companies and most notably renewable energy project developers. Our firm understands and appreciates that an appropriate mix of energy from different sources will be required to power Saskatchewan into the future. We note that the Government of Saskatchewan is at a critical point in time now when important decisions may be made which could have an effect on independent power producers (“IPPs”) and all those people and businesses in Saskatchewan who derive economic benefits from private investment in renewable energy facilities. We note that recently the economic benefits of renewable energy to Saskatchewan seem to have been overlooked. We write to you in order to provide some clarity on the benefits of renewable energy to Saskatchewan. Although different renewable energy generation types have different economic benefits to Saskatchewan, we highlight some of those just for wind power generation facilities below:
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- Farmers receive option fees. Landowners (usually farmers in rural Saskatchewan) receive payment from IPPs for entering into an Option to Lease and Lease Agreement – an agreement that gives the IPP the future right to lease the land. Farmers receive payment even though the land is not currently leased. IPPs typically hold various options over many different lands as they are uncertain where a future project might be developed. This provides regular cash payments for farmers even though the lands may never be used for a wind power generation facility. Until (and if) the option to lease is triggered, the land continues to be under full production.
- Farmers receive rent. Once the option to lease is triggered, the IPP and farmer enter into the Lease and farmers receive rent for their land. These rent payments over the life of the wind power generation facility (depending on the acreage held by the farmer and number of turbines on their property) can be in the many millions of dollars. The farmer receives compensation for any crop or land loss or damage. There are typically carve-outs in the Lease Agreement which allow the farmer to farm, rent, or transfer the land. Farmers may also negotiate carve-outs to accommodate concurrent oil and gas development, geothermal and/or small modular or subsurface potash mining on the same lands.
- Land agents are employed. Land agents in Saskatchewan receive payment from IPPs for assisting them in acquiring land for the wind power generation facility.
- Farmers provide weed control. Local farmers may be hired by the IPP to control weeds and vegetation around the turbines and roads.
- Local businesses provide fencing. Local businesses or the rural municipality may be hired by the IPPs to provide and install fencing.
- Professional services. Local accounting firms are often engaged to provide tax advice to farmers receiving payments from the IPPs. Local law firms provide advice to farmers on agreements with IPPs. IPPs retain accountants and lawyers to assist with tax and project development.
- Rural municipalities receive taxes. Once the wind power generation facility is operational, the IPP pays taxes to the rural municipality (which can be significant, especially for a small rural municipality).
- Community planning professionals. If a rural municipality does not have renewable energy-specific bylaws in place, the RM may pay a local community planning professional to assist.
- Environmental consultants. Local environmental consultants are often retained by IPPs to assist with environmental assessments as part of the permitting process.
- Rural building owners and contractors. IPPs may purchase buildings in rural Saskatchewan and pay local rural contractors to refurbish the buildings, or build new buildings for education, demonstration, operation and maintenance and other purposes.
- Local contractors build transmission infrastructure. Local Saskatchewan contractors are typically contracted for any new transmission, distribution and interconnection work required for the wind power generation facility – which costs to build this public infrastructure are currently passed on and paid entirely by the IPP (even though the IPP has no ownership, and all others can use this electricity infrastructure).
- Bonding agents. Bonds may be required to decommission the wind power generation facility which are secured through a local bonding agent in Saskatchewan.
- EPC Subcontractors. The IPP typically enters into a form of engineering, procurement and construction (EPC) contract to build the wind power generation facility. We don’t yet have EPC contractors with this capability in Saskatchewan, but often the EPC contractor hires local construction companies as subcontractors. The IPP pays the EPC contractor and then the EPC contractor pays the local Saskatchewan construction subcontractors.
- Consulting engineers. Both IPPs and EPC contractors often contract with local Saskatchewan consulting engineering firms on the design of the wind power generation facility.
- Road builders. Many roads are required for a wind farm and a large contract is usually entered into between the IPP’s EPC contractor and a roadbuilder. Due to the size of this contract only large roadbuilders in Saskatchewan typically have capacity to do this work. But those large local Saskatchewan roadbuilders may hire local and Indigenous workers close to the project site to build these roads.
- Local businesses upgrade and maintain roads. Local businesses, or sometimes the RM itself, are paid by the IPP to upgrade existing roads to allow for the transport of tower, turbines and blades to the site. IPPs may enter into contracts and pay local rural people and companies or Indigenous groups to keep roads connecting the wind farm maintained and clear of snow throughout the year.
- Rural or indigenous communities. Jobs (with salaries paid by the IPP) to operate and maintain the facility could be located in the local rural or Indigenous community.
- Indigenous groups earn dividends. SaskPower currently requires at least 10% Indigenous equity ownership IPP projects supplying power to SaskPower. Unlike with SaskPower-owned facilities (which don’t make a profit), Indigenous equity owners can share with the IPP in the profits distributed by way of dividends.
- Local investors. Local investors have the opportunity to help Indigenous groups finance equity in the wind farm.
- Indigenous groups earn a return on capital. Unlike with SaskPower-owned facilities, Indigenous equity ownership in an IPP-owned facility increases in value as the total value of the project increases. If an IPP sells the wind power generation facility, Indigenous equity owners can benefit very significantly if there is a sale of the project.
- Industry investment in Saskatchewan. Any large or publicly traded company looking to invest in economic opportunities in Saskatchewan is subject to Environmental, Social, and Governance (ESG) business imperatives requiring the procurement of clean energy and the ability to meet GHG emissions targets within overall global operations. Decarbonizing electricity generation will increase Saskatchewan’s competitive position as an attractive place for industry to invest.
We understand that very recently the Economic Assessment Tribunal has been convened pursuant to The Saskatchewan First Act (Saskatchewan) in order to examine the economic costs of the federal government’s proposed Clean Electricity Regulations. We are hopeful that the Economic Assessment Tribunal will not only consider the costs of decarbonizing electricity generation in Saskatchewan, but also the economic benefits.
This is an important issue to our firm and so we remain open and willing to provide any further information on the economic benefits of renewable energy which you may find useful to assist with the important decisions ahead.
Yours truly,
Procido LLP
Chad Eggerman
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