NDP LOADED FOR BEAR, CLAIMS TO HAVE PROOF ENRON IN ON POWER FIX

The government’s lawsuit over power purchase agreements, surely one of the weirdest on legal record, is so mystifying that many Albertans conclude it’s a convoluted political stunt.

The truth of it hangs on one key question — does the NDP really have the goods?

Can it prove in court that Enron, one of the most crooked companies in U.S. corporate history, manipulated Alberta’s power market with government connivance, in such a way that utilities can now stick the taxpayers with $2 billion in liabilities?

In an op-ed piece published in Friday’s Herald, Deputy Premier Sarah Hoffman implies there’s ample evidence.

The Enron clause, she claims, “was sneaked into PPAs at the last minute by a U.S. corporation with a history of illegal activity. It was added without public consultation and subsequently hidden from legislators and the public.”

If the NDP can prove this, and reverse the return of PPAs by utility companies, it will unmask a conspiracy that forever taints the Progressive Conservatives, who were in power at the time.

Premier Rachel Notley’s government would also look like heroes to beleaguered power consumers faced with rising costs.

Of course, if the NDP is wrong and can’t prove its case, the whole crew will look like idiots. That could destroy a government already in trouble.

I asked Cheryl Oates, Notley’s communications director, if the government has solid, documented evidence of Enron’s involvement in a last-minute deal to change crucial wording in the PPAs.

“Yes,” she said, “of course we do.” She wouldn’t release the evidence, saying it will come out in time.

The PC government of the late Ralph Klein, while deregulating and privatizing electricity, began working in 1998 on agreements to allow private companies to purchase and resell power.

This was controversial, so the government created an open process with consultation by the energy and utilities board, and a public hearing in October 1999.

The PCs had to attract capital or the whole privatization project would fail. To appeal to the companies, the PPA wording allowed companies to terminate agreements if they were “rendered unprofitable” by any change in government policy.

The NDP will claim there was no mention of the later, highly forgiving terminology — “rendered more unprofitable” — that would let companies already underwater back out.

In December 1999 the EUB approved “rendered unprofitable.” This was published as final wording in May 2000.

But it wasn’t over, the government claims.

“In the final days leading up to the auction on PPAs, (beginning Aug. 2) Enron began lobbying the government to change the language.

“(Enron) was successful, and the language was written into an additional document. There was no public consultation on this change and cabinet ordered that a related regulation would be withheld from the Gazette, the media and the public.”

The New Democrats are basically charging that the final deal was done on the sly in the heart of cabinet. If this is true, it could explain why so many respected officials of that day are so outraged at the suggestion they knew anything about Enron involvement.

“They probably didn’t know,” says Oates.

The courts will decide if all this is credible. There are many questions about where the case leads. Would the small wording change, even if it’s overturned, really take away the companies’ ability to terminate agreements, when they signed their power deals in good faith?

But this is shaping up as a multi-year legal brawl. And the New Democrats, who now have access to all the cabinet records, minutes and documents of the PC years, are loaded for grizzly.

Here’s a final ironic twist to this bizarre story:

Enron Canada Power Corp., a subsidiary of U.S. parent Enron Corporation, acquired a PPA in 2000, to sell electricity from the Sundance plant until 2020.

The next year, as the U.S. Enron was beset by scandal over market manipulation, crooked accounting, and billions in undisclosed debt, Enron Canada Power sold the PPA for $215 million to a partnership of TransCanada Pipelines and AltaGas Services.

TransCanada now wants to terminate that PPA, citing the right acquired back in 2000.

And it may well keep that right, even if the NDP proves Enron got it through a backroom deal. This is a province of escalating goofiness.