Enmax wins legal fight with provincial agency over power contracts
Calgary utility Enmax Corp. has won a legal battle with the province’s Balancing Pool, marking another chapter in the long-running dispute over the contentious issue of power contracts.
Court of Queen’s Bench Justice Karen Horner issued a ruling Wednesday in favour of Enmax, which was seeking an injunction against the provincial agency.
The ruling requires the Alberta Balancing Pool to complete an assessment of Enmax’s decision in May 2016 to return a power purchase arrangement (PPA) to the government agency, which backstops all such deals.
During a court hearing in September, Enmax argued the Balancing Pool had dragged its heels for more than 500 days on making a decision about whether to either accept or reject a PPA for the Keephills coalfired electricity generating plant.
“There is no question that the Balancing Pool is required to conduct an assessment of the Keephills termination notice. There is also no question that the Balancing Pool has declined to complete the assessment,” Horner wrote in her ruling.
“Its refusal to do so … is a breach of its obligations.”
The case dates back to the Notley government’s announcement in mid-2015 to raise the province’s carbon levy on industrial greenhouse gas emitters, which affected a series of coal-fired PPAs.
Power purchase arrangements give buyers like Enmax the right to purchase electricity from generating plants and resell it to consumers.
Under the agreements, any change in law that makes them “unprofitable or more unprofitable” allows the buyer to return the PPAs to the Balancing Pool, which passes along any gains or losses to Alberta electricity consumers.
Enmax argues the NDP government triggered the opt-out clause by increasing the carbon tax.
After several money-losing agreements were returned last year as electricity prices fell, the Balancing Pool suffered operating losses of more than $2.5 billion.
Enmax initially returned one power agreement in December 2015, which was quickly accepted by the Balancing Pool.
However, the utility has not yet received a decision on its attempt to return the Keephills PPA.
The Balancing Pool said it wasn’t proceeding with its assessment of the termination notice because the Notley government launched its own lawsuit last summer against several PPA holders, including Enmax.
The province claims the change-in-law clause was unlawfully inserted into the PPAs back in 2000 following lobbying efforts by nowdefunct Enron Corp.
But Horner ruled Wednesday the Balancing Pool must complete its assessment and verification of the termination notice “without further delay.”
Balancing Pool CEO Bruce Roberts said the agency will likely make its decision about the power arrangement termination by year’s end. It continues to cover the monthly $7-million losses from the Keephills PPA.
“What we’ve said in the past is that we can’t finalize the termination decision because this thing is caught up in a court challenge. The judge now has said go ahead,” Roberts said. “It does not mean the courts are telling us to accept the termination.”
Enmax said in a statement Wednesday it was forced to seek the injunction after the Balancing Pool “refused to perform its statutory duties.” The city-owned utility noted it recently won another court case against the provincial agency regarding the effective termination date of another returned PPA.