‘It could be a Monty Python script’

‘Could be a Monty Python script’

Business isn’t holding back about how it feels about the bizarre lawsuit filed by the Alberta government this week to stop companies from backing out of the province’s own 16-year-old power contracts, reports Financial Post columnist Claudia Cattaneo.

“I think Venezuela has moved North,” said one oil executive. “If the reality were not so stark it could be a Monty Python script.”

The lawsuit is part of the Notley government’s clumsy attempt to protect consumers — that is, increasingly hostile voters — from the consequences of its aggressive climate change policy.

The Alberta government’s clumsy attempt this week to protect consumers – i.e. increasingly hostile voters — from the consequences of its aggressive climate change policy is backfiring, with the NDP getting blowback the size of a Chinook for not knowing the terms of its own 16-year-old power contracts, then suing to dodge the costs.

The province’s attorney general filed a bizarre lawsuit Monday to stop power companies – including utilities owned or partially owned by Alber ta’s two largest cities, Calgary and Edmonton – from backing out of power contracts made less profitable by Alberta’s increased carbon costs.

The lawsuit also strangely targets its own regulatory agency, the Alberta Utilities Commission, for “unlawfully” agreeing to terms in 2000 that allowed termination of so-called Power Purchase Arrangements “if a change in law renders the PPA unprofitable, or more unprofitable.”

Strangely, Rachel Notl ey ’s ND P government claims it wasn’t aware of the out clause until recently.

The actual announcement of the lawsuit was even more bizarre. In it, the provincial government said the exit clause was “lobbied for by Enron – a discredited and now bankrupt U.S. electricity operator at the centre of numerous other controversies and questionable business practices” and secretly accepted by the previous (Tory) government so the private sector could “earn greater profit ” — as if pointing the finger at longdead Enron, or the previous government, or profit-seeking companies, somehow bolsters its credibility.

Agnico lowered its cost guidance, hiked its production guidance and even raised its dividend 25 per cent, an act that would have seemed unthinkable over the last few years.

Rising gold prices are lifting stock valuations across the sector, but certain miners have performed much better than others. Barrick has been a top performer as the company executed a successful turnaround under chairman John Thornton and regained its position as the sector’s flagship company. Goldcorp Inc. has underperformed as the company cut its production guidance and faced operational challenges.

Barrick’s adjusted earnings of US14 cents a share were in line with average analyst expectations. Agnico’s results (US16 cents) were better than expected, while Kinross’s (negative US1 cent) were slightly worse.

Barrick also disclosed that it plans to sell its 50-per-cent stake in the Kalgoorlie mine in Australia. This move did not come as a surprise. Kalgoorlie is a non-core asset, and Barrick has vowed to cut debt by at least US$2 billion this year. The company has already reduced debt by US$968 million since the start of January.

“Strengthening our balance sheet remains a top priority,” Barrick said in a statement.