City Seeking Financing Consultant For Solar Project
A digital rendering of the Saamis Solar Project looking north from Parkview Drive. (Image Courtesy of DP Energy)
The City of Medicine Hat’s tender closes this week for a consultant to work out financing on the Saamis Solar Project with the aim of developing a model to move forward with the initiative.
Council approved a funding request for $675,000 in April to work out the details of development of the project. That was preceded by Medicine Hat receiving Alberta Utilities Commission (AUC) approval in February of the city’s decision to enter into a purchasing agreement with project proponent DP Energy in September 2023. The initial foray into the city’s development of a solar development was sparked by council’s approval allocating $7 million towards the goal in April 2023.
Core deliverables of the tender include evaluation of whether to retain control over the entire 325 MW project or develop the proposed first phase of the solar farm consisting of a 75 MW portion while selling the remaining portion.
The tender also includes the option of seeking an investor partnership in developing the entire project or just the initial phase.
While the city has entered into a purchasing agreement with DP Energy, that transaction is conditional with full details of those final sale requirements yet to be made public.
According to information on the city’s Shape Your City website, once all those conditions are met, the municipality will again apply to the AUC for a permit to proceed with the project on a phased approach.
“Once a detailed business plan capable of informing a final investment decision has been completed, a recommendation will be submitted to city council for consideration,” reads background information provided on the Shape Your City website. “The decision to fund and construct the project will be made by the duly elected city council.”
Medicine Hat’s first foray into renewable energy, the Boxsprings Wind Farm. The project commissioned in 2014 following the city entering into a public-private partnership is believed to be operating at a financial loss for the municipality, according to a former city councillor. (File Photo)
Following completion of the detailed analysis, the Shape Your City website emphasizes the possibility the project team might recommend the city not proceed further with the initative.
According to the financial consultant tender, the term of the project is scheduled to be completed by Oct. 15. The next municipal election will be held on Oct. 20.
The project has raised concerns in the community regarding costs associated with the solar play with advocacy organization Medicine Hat Utilities Ratepayer Association (MHURA) seeking an independent review of the project.
Work on the Saamis Solar Project also comes amid the debate regarding whether to move the city’s energy generation and transmission assets into a municipally controlled corporation. And, while not directly related, the controversial project is being developed as the provincial municipal inspection is being conducted regarding city governance.
The provincially contracted investigator is anticipated to present his report on July 21, the same date the city’s tender is scheduled to be awarded.
DP Energy, based in County Cork Ireland, received an initial development permit from the City of Medicine Hat in August 2021. That was followed by initial stakeholder consultations and going through a subsequent AUC approval process.