By: Janelle Anderson, Glenn Wright, and Chad Eggerman
SaskPower has launched an expanded Renewable Subscription Service (“RSS”) that is being marketed as an “easy” way for customers—particularly farmers and residential customers—to achieve their sustainability goals. However, a deeper analysis suggests that the program may actually hinder the development of local renewable energy generation while failing to provide businesses with the necessary means to avoid compliance costs under international carbon regulations such as the EU’s Carbon Border Adjustment Mechanism (“CBAM”). At a time when Canadian farmers and businesses are needing to expand further into international markets beyond the US, it is important they understand the limitations associated with this program – and the limitations in its ability to support to their sustainability imperatives.
The Basics of the Renewable Subscription Service
SaskPower’s RSS allows customers to voluntarily purchase Renewable Energy Certificates (“RECs”), which represent the environmental attributes of renewable electricity generation in Saskatchewan. At $15 CAD per REC (each REC representing environmental attributes of 1MWh of energy), customers are effectively paying a surcharge to claim these attributes, though the actual power they consume remains unchanged—it is still drawn from the provincial grid, which includes non-renewable sources.
A key limitation of the RSS is that it does not grant customers any ownership over specific renewable electricity production. Instead, SaskPower simply retires the RECs associated with that production on the customer’s behalf. While this ensures that the environmental attributes are not resold, it also means that customers cannot use these RECs to substantiate their claims to reducing embedded emissions of their products within international carbon regulations like CBAM.
Understanding the Difference Between RECs and Carbon Offsets
A common misunderstanding in sustainability initiatives is the distinction between RECs and carbon offsets. While both instruments are used to address environmental impact, they serve different purposes:
- RECs: Represent ownership of the environmental attributes of renewable electricity generation. When a business purchases RECs, they can claim to use renewable energy, but this does not mean they are directly reducing emissions beyond what is already accounted for in the grid mix.
- Carbon Offsets: Represent verified reductions in greenhouse gas emissions from external projects (e.g., reforestation, methane capture). Offsets allow businesses to compensate for their own emissions by funding projects that reduce emissions elsewhere.
Unlike offsets, RECs do not necessarily contribute to additional emissions reductions, nor do they directly impact a company’s carbon footprint beyond scope 2 emissions calculations. A business that truly seeks to decarbonize its operations should focus on securing Power Purchase Agreements (“PPAs”) or self-generation rather than relying solely on RECs, which primarily serve an accounting function.
Failure to Support Businesses in CBAM Compliance
With the introduction of the EU’s CBAM in 2026, businesses exporting to the third largest economic region in the world will need to demonstrate their renewable energy consumption through contractually defined emissions ownership agreements, such as PPAs. Under CBAM regulations and guidance, merely purchasing RECs that are retired by a utility does not meet the stringent criteria for embedded emissions reporting.
CBAM regulations allow businesses to account for actual indirect emissions from electricity use only if they can prove either a direct physical link to renewable energy or a contractually defined agreement such as a PPA. SaskPower’s RSS does not facilitate either of these mechanisms. This means that Saskatchewan businesses relying on RSS for sustainability claims may still be subject to CBAM tariffs when exporting to Europe.
Undermining Local Renewable Energy Investment
One of the most concerning aspects of the RSS is that it may discourage investment in self-generation of renewable energy. By offering a pay-to-claim model rather than a framework that actively supports businesses in generating their own renewable power through on-site renewable generation projects, the program reduces incentives for businesses to pursue self-generation or direct investment in renewable energy.
In jurisdictions with progressive renewable energy policies, businesses are encouraged to invest in PPAs or on-site generation projects that contribute directly to decarbonization. In contrast, RSS provides only a financial mechanism with no direct impact on increasing Saskatchewan’s renewable energy capacity. If businesses believe they are making a meaningful environmental impact by subscribing to the RSS, they may be less likely to pursue their own renewable energy initiatives.
The Risk of Greenwashing and Double Counting
Additionally, there is a potential issue of double counting when it comes to the environmental attributes associated with these RECs. Under a proper accounting regime, once a REC is sold and retired, the renewable electricity associated with that REC is deemed fully allocated to the buyer and is no longer available for others to claim. This means that if all available renewable electricity is accounted for via RECs, the remaining grid electricity is effectively non-renewable. However, SaskPower may still make broad claims about the renewable composition of the electricity on the grid while simultaneously selling off the RECs as an alternative revenue stream. If this is the case, it risks misleading customers and stakeholders about the true share of renewable electricity available to the province. The involvement of a third-party certification entity, such as EcoLogo or Green-e, should help mitigate this risk, but interested parties should closely monitor environmental claims made by SaskPower as this program rolls out.
SaskPower’s Commitment to Coal-Fired Power Generation
Further exacerbating concerns about the province’s sustainability efforts, the Saskatchewan government has directed SaskPower to consider extending the operating lives of its coal-fired power plants beyond the federally mandated shutdown by 2030. The federal government has set regulations requiring coal-fired power plants to shut down or implement carbon capture technology by the end of 2030. However, Saskatchewan’s Premier Scott Moe has defended the decision to keep these plants operational past this deadline, citing concerns over affordability and reliability of power supply. He argues that the federal government’s standards for zero-emissions electrical generation are unrealistic and unaffordable for the province, despite the federal government’s Clean Electricity Regulations aligning its objective for national net zero electricity generation with Saskatchewan’s previously announced goal for net zero generation by 2050.
Extending coal fired generation beyond 2030 not only contradicts federal environmental policies but also undermines the province’s commitment to reducing greenhouse gas emissions. By doubling down on coal-fired power generation, Saskatchewan risks falling behind in the national and global shift towards cleaner energy sources.
Conclusion
While SaskPower’s Renewable Subscription Service is positioned as a tool for sustainability, it ultimately falls short of driving meaningful renewable energy development. By discouraging self-generation and failing to provide the necessary means for customers’ CBAM compliance, the RSS risks becoming a greenwashing distraction rather than a true enabler of Saskatchewan’s energy transition.
Additionally, the potential for double counting renewable attributes raises concerns about the transparency of SaskPower’s approach. If the utility is selling RECs while also promoting the renewable nature of its electricity mix, customers may be misled about the actual renewable content of the power they consume.
If the province is serious about achieving a low-carbon future, it must move beyond REC subscription models and adopt policies that genuinely support renewable investment and emissions reductions.
Disclaimer
This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice. Contact Procido LLP (www.procido.com) if you require legal advice on the topics discussed in this article.