‘I think Venezuela has moved north’

Continued from FP1

Any NDP delusion that the fight will garner consumer support was quickly overrun by reaction that ranged from disbelief to ridicule.

In a statement Wednesday, the Calgary Chamber of Commerce said the lawsuit “sets a devastating precedent that will erode public trust in our regulatory agencies, call into question contracts that have been promulgated under existing regulations, and discourage inward investment to our province.”

“The Government’s incendiary portrayal of business as motivated only by the pursuit of profit at the expense of public welfare, at a time when business is struggling — and still contributing substantially to our collective prosperity — is as insensitive as it is insulting,” the chamber’s director for policy, Justin Smith, said in the statement.

Calgary Mayor Naheed Nenshi called the suit “outrageous.”

“We have the spectacle of the provincial government suing itself because, apparently, it didn’t know its own policies that have been in place for 15, 16 years and that (Calgary utility) Enmax has been abiding by.”

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

One business observer described it as a “p.r. stunt” whose real intent is to up the dispute in the courts until the next election, while yet another said it’s evidence the province didn’t think through the consequences of its carbon policy, then made up a “ludicrous claim” to blame someone else for the fallout.

“Overall, this creates yet more uncertainty in the Alberta power market,” RBC Dominion Securities analyst Robert Kwan said in a report to clients.

“Further, we wonder if this is a sign that the gov- Emitters Regulation, effective Jan. 1, and power costs at rock bottom due to Alberta’s depressed economy, Enmax, Capital Power, Trans-Canada Corp., ATCO Ltd., and AltaGas Ltd. used the out clause to terminate all of their PPAs for coal-fired electricity. The out clause was negotiated to protect the utilities against rule changes for the duration of 20-year contracts that could change the economics of the agreements.

The province is asking the Court of Queen’s Bench to deem the clause invalid because the Alberta Utilities commission didn’t have the authority to allow it. The case is going to court in Edmonton in November.

“If all these buyers were permitted to abandon their obligations under the PPAs … the estimated impact on Alberta electrical ratepayers is in the order of $2 billion … the shortfall of which will have to be charged to consumers,” Alberta says in its statement of claim.

The reality is the government has been downplaying the downside of its climate change plan from the get-go, as if remaking Alberta’s oil and gas-based economy to fit its green dreams won’t have costly consequences.

The dispute over PPAs is just the tip of the iceberg. Next in line will be coal companies forced to retire their power plants early, and oilsands companies impacted by a cap on emissions. Watch them line up for compensation if they end up with stranded assets, with consumers/taxpayers stuck with the bill. That’s on top of a $3-billion carbon tax on everything they will have to start paying next January.