Canadian Utilities may sue over compensation
Capital Power already going after Alberta for coal facility shutdown payments
Canadian Utilities officials could become the second Alberta electricity company to take legal action over what it sees as inadequate provincial compensation for shutting coal-fired power plants.
“The value we see in our assets we feel should be recognized at fair value,” chief executive Nancy Southern said Wednesday during the utility’s annual general meeting at the Fairmont Hotel Macdonald.
“I don’t know whether that will actually mean court proceedings, but we will do everything possible to ensure that we receive the appropriate value for those assets as they are retired.”
Capital Power sued Alberta Energy last week, claiming the department unreasonably recalculated the value of four coal generating facilities so that over the 13 years the company will receive $38 million less than set out in an agreement with the province.
The government wants to stop all electricity generation using coal by 2030 to reduce Alberta’s greenhouse gas emissions, and reached a deal in 2016 to pay Capital Power, TransAlta and Atco Ltd. — which owns Canadian Utilities — $1.36 billion in compensation.
Atco is slated to receive a total of $66 million by 2030 for shutting down the two coal-fired units of the Sheerness generating station it co-owns with TransAlta up to a decade earlier than scheduled.
Southern said that isn’t enough money, but she wants a “holistic” approach to the issue that could also include changing regulations or introducing better incentives to help coal communities transition to natural gas.
“The impact of all of these different regulations is pretty overwhelming and it’s taking away value from our businesses and our ability to continue to invest,” she said in an interview. “We are evaluating our options right now … We will wait and see what happens with Capital Power. We have our own discussions going on with the province, with the Balancing Pool, with the department of energy, and we haven’t reached a conclusion yet.”
An Alberta Energy spokesman has said they’re confident in their legal position regarding the Capital Power case, and the so-called off-coal agreements ensure power companies keep their headquarters in Alberta.
Meanwhile, plans for an Alberta hydroelectric project are on hold because Conservative and NDP governments over the past 10 years wouldn’t protect the company’s right to develop a site after it does the initial selection work, Canadian Utilities president Siegfried Kiefer said.
“People are talking decades now to approve a hydro project. It’s very difficult to start funding a project and keep it going to 10 years without any hope of knowing whether it’s going to go through or not.”
Canada’s economy is being hurt by lengthy review times, higher taxes and other differences from the United States leading businesses to put money south of the border, he said.
All types of green energy, including hydro, can participate in renewable electricity auctions, an Alberta Energy spokesman said in an email statement.
The department is also waiting for recommendations from the Alberta Electric System Operator on how to incorporate hydro and other renewables that can be generated on demand through a competitive process to ensure a full range of options is considered, the statement says.