New Application, Same Old(s) Story: AUC Rejects Synapse Power Plant Project Without A Hearing

On August 17, 2026, the Alberta Utilities Commission (AUC) issued Decision 30732-D01-2026 in which it denied Synapse Real Estate Corp.’s (Synapse) application to build and operate a natural gas power plant in Olds, Alberta. Unusually, the decision was made without a hearing.

Synapse applied to the AUC for approval to construct and operate a natural gas power plant, designed to exclusively power a co-located mega data centre campus (i.e., it would not be connected to the provincial power grid). The AUC’s jurisdiction does not extend to the approval of data centres but does encompass power plants. Synapse therefore needed the AUC’s approval for the facilities required to power the data centre complex.

Collectively, the 1,400 MW power plant, 1,800 MW backup generation facilities, and associated data centre infrastructure would occupy 273 acres of land, approximately 10% of the size of the town of Olds. There was substantial opposition among Olds’ residents to the project, especially given the proposed plant and data centre’s proximity to residential areas within the town.

The rejection of this proposal cannot be understood in isolation; it comes after a series of regulatory missteps and unresolved deficiencies throughout the proceedings.

Deficiencies in First Application

The recently rejected proposal was not the first time Synapse attempted to get project approval from the AUC. On February 12, 2026, Synapse filed its first application for approval of its power plant project. According to the AUC, that application contained errors, insufficient or incomplete information, and inconsistency among the application documents, including an allegedly deficient participant involvement program, draft environmental studies containing missing information, inconsistencies regarding the project’s generating equipment and associated noise modelling assumptions, and an inadequate explanation of why federal impact assessment requirements did not apply.

The extensive defects in the application made it unclear as to whether the Rule 007: Facility Applications requirements had been met. On March 6, 2026, the AUC decided to close the application without prejudice to Synapse reapplying in the future. In its application closure letter, the AUC urged Synapse to address the deficiencies and familiarise itself with the legislative and regulatory requirements applicable to power plants.

Second Application: Information Requests, Suspension, and Decision Without Hearing

Synapse submitted their second application less than a month later, on April 3, 2026. Synapse stated that its second application addressed many of the deficiencies of its first proposal. However, one key aspect of the application remained unchanged, namely the project’s location within the Town of Olds. The proposed project site boundary was approximately 30 metres from the first row of urban properties across a residential road, and there were over 700 residences within 800 metres of the proposed project.

The typical process followed by the AUC in reviewing major power plant applications may be summarized as follows:

• After the application is received, the AUC issues information requests;
• Once the AUC is satisfied that the application meets basic informational requirements, it issues a Notice of Application and invites persons who may be directly and adversely affected to file Statements of Intent to Participate (SIP) in the proceeding;
• Once SIPs are reviewed, the AUC issues a Notice of Hearing in which it rules on the standing (entitlement to participate as an Intervener) of SIP-filers and establishes a process schedule for remaining procedural steps leading up to a public hearing, which steps include:
  • Information requests from Interveners to the proponent,
  • Written submissions and evidence from the Interveners,
  • Information requests from the proponent to the Interveners,
  • Reply evidence from the proponent,
  • Public hearing and closing argument.

In this case, after Synapse filed its second application on April 3, 2026, the AUC issued a Notice of Hearing on April 29, 2026, in which, among other things, it invited interested parties to file SIPs and Interveners to submit information requests to Synapse.  Although less than a month had passed since the second application was filed, over 120 persons had already filed SIPs.  By the time the AUC denied the application, and notwithstanding that on July 15, 2026, the AUC advised it would no longer accept additional SIPs, approximately 1,800 interested parties filed SIPs, apparently a record. Most of the Interveners raised concerns about the project’s siting in relation to the town and the cascading consequences on the community. The public criticism of the project, as evidenced in the sheer volume of SIPs, was an indicator that the project weighed against the public interest and that Synapse had not sufficiently addressed the overarching issues also found in its first application.

On May 14, 2026, the AUC issued the first of two rounds of detailed information requests to Synapse. This information request asked questions regarding location selection and consultation with interested parties. Synapse responded to the IR on June 5, 5026.  Eleven days later, on June 16, 2026, the AUC issued a “Process schedule update” in which it advised that it would have additional information requests for Synapse and, given the sheer number of SIPs received and the AUC’s need to collect further information from Synapse, the process schedule would be suspended. The second round of information request was issued on July 9, 2026, through which the AUC continued to inquire about the project’s siting.  Synapse responded on July 30, 2026. The AUC issued its decision denying the application less than three weeks later, on August 17, 2026.

Of particular note, the AUC opted to make its decision without conducting a hearing in what appears to be an exercise of the AUC’s authority under subsection 9(1) of the Alberta Utilities Commission Act, SA 2007, c A-37.2. At paragraph 26 of the decision, the AUC noted that “[w]here there is sufficient information to reach a decision based on the existing information, it is not in the public interest to require interveners and applicants to expend significant time, effort and expense to engage in a full hearing process.”

Ultimately, the AUC found that Synapse had not demonstrated that the proposed location was in the public interest. The AUC stressed that the fundamental issue with the proposal was not about whether the site could accommodate the project from a zoning or engineering perspective, but rather the fact that it lacked a compelling location-specific justification for being placed right next to existing urban development.

Conclusion

It is clear that the Synapse application presented significant procedural challenges to the AUC, such that its normal process for considering an application when interested parties have intervened simply could not work. As a result, the AUC exercised its considerable discretion over its own processes to craft a “bespoke” procedure tailored to the specific circumstances of the application. This included:

• Immediately notifying Synapse that a hearing would be held, before the Commission had invited interested parties to file SIPs;
• Providing that Interveners could file information requests at the same time as interested parties were invited to file SIPs (i.e., before the Commission had made any rulings on the standing of interested parties to participate as Interveners);
• Advising on July 9, 2026 that, given the huge volume of SIPs already received and the commonality of concerns expressed, no additional SIPs would be received;
• Suspending the process schedule; and
• Denying the application without a hearing.

It has been widely reported that the Government of Alberta is strongly supportive of data centre development in the province. Notwithstanding that support, this decision serves as a reminder that power generation facilities cannot bypass the AUC’s public interest assessment, particularly in the face of significant local concern over project siting. These projects will continue to face regulatory scrutiny but may overcome these hurdles by engaging in meaningful consultation with affected communities and by submitting applications that conform substantively and procedurally with the AUC’s facility requirements.

This decision also highlights how siting considerations can influence the trajectory of a proposed project. Proposing industrial projects in areas with similarly situated infrastructure and facilities may reduce public scrutiny and may even avail project proponents to expedited regulatory processes. For example, projects proposed in the Alberta Industrial Heartland Designated Industrial Zone, comprising of five municipalities northeast of Edmonton, can access reduce approval processing times and benefit from municipal alignment in permitting.

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