The Alberta government made an 18 page submission on the CERs,...

The Alberta government made an 18 page submission on the CERs, in part saying it is unworkable as it will push up power prices, cause job losses, create grid instability, etc.

I disagree with much of what they are claiming, only because any of the above would only happen if the province does not support proposed regulations and encourage investment so that projects can be built in a timely fashion to ensure prices remain reasonable and the grid is supported with suitable baseload power such as from gas fired plants with carbon capture and sequestration, peaker plants and battery storage.

BUT, one argument Alberta made is that the regulations would be unconstitutional. And such an argument resonates strongly as Alberta challenged the Canadian Impact Assessment Act which focuses on what environmental impacts projects have on the environment. Alberta won repeatedly, most recently last month, despite the Canadian government appealing the courts decisions, the reason being is that the IAA had overstepped their bounds and was being used on provincial resource projects and the resources constitutionally do not come under federal responsibility, they are the responsibility of the provinces.

Likewise, power generation is the responsibility of the provinces (the environment and taxation being federal responsibilities) and Alberta's stance is the the CERs seek to impinge upon their responsibility and would therefore also be unconstitutional.

Looks to me like we could continue to move ahead with Saddle Hills as a simple gas fired peaker plant as that works with, or without, the CERs.

BUT, we are left with uncertainty in regards to the larger projects.

If the federal government continues to support the tax credits for CCUS with or without the CERs my belief is that KPO could still be able to get funding in the near term for the big projects and move ahead. Although they would want/need written confirmation regarding the ability to access the tax credits.

Without being in the data room I am not aware of what, if any, impact the absence of the CERs would have on the projected investment returns. A lot of that would turn around pricing for inputs and outputs and I don't have access to their modelling for that.