Medicine Hat City Council approves 75-megawatt Saamis Solar project with customer contract requirement

Medicine Hat – Medicine Hat City Council has approved a budget of $131.5 million to move forward with the 75-megawatt (MW) phase of the Saamis Solar project, contingent on securing a power purchase agreement with a committed customer before breaking ground.

This approval centers on three key drivers:

The project makes money. The project is forecast to improve the City’s financials and enhance the dividends from our energy business.

“We’ve taken a careful and comprehensive look at the financials, risks, and mitigation measures, and we’re confident that moving forward is the right choice for Medicine Hat. This is a responsible business decision that will strengthen our energy business, grow our local economy, meet evolving customer needs, and generate value for residents,” said Councillor Ted Clugston, Chair of the Energy, Land and Environment Committee.

There will be no property tax increase nor electric rate increase related to the project. The funding for Saamis Solar comes from the City’s Energy Transition Reserve, and debt financing. In addition to the project paying for itself over time, it is forecast to pay linear taxes into the City, on top of higher dividends from positive project earnings.

“We're approving a project that earns money for our city without asking residents to pay more," said Councillor Cheryl Phaff.

A firm backstop is built in. Council's approval requires a power purchase agreement to be finalized before any construction begins, ensuring predictable revenue.

“The requirement is straightforward: we need a signed customer before we break ground. This protects taxpayers while creating opportunity,” adds Phaff.

The initial 75 MW phase is planned on the northwest area of the approved project lands. The total footprint of the approved 325 MW project is 1,270 acres north of Parkview Drive NE. Medicine Hat’s Municipal Development Plan projects residential development on this land in the distant future, more than 30 years out. The projected lifespan for Saamis Solar is forecast to be 35 years.

“A solar farm really is the highest and best use of this land, until it is required for future residential growth,” said Mayor Linnsie Clark, referring to the ability for fixed solar panels to be installed on the portion of the parcel that is registered as contaminated and unable to be disturbed. 

The City will next seek to amend the Alberta Utilities Commission siting permit and related transmission needs from the initial 325MW approval to the smaller 75MW size, solidify the project structure to maximize incentives, and secure an Energy Sales Agreement with one or more counterparties.

If milestones are achieved as planned, Saamis Solar will be operational in 2028.

Residents can follow updates at medicinehat.ca/saamissolar. 

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