Deal between province, power firms over PPA ‘tentative’: Notley

Premier Rachel Notley said Tuesday she’s hopeful the province is close to a deal with Enmax to settle the high-stakes legal dispute over power purchase arrangements, but Mayor Naheed Nenshi blasted the NDP government for suggesting an agreement with the city-owned utility was in place.

An NDP government source told Postmedia Monday that the province had reached a proposed settlement to end PPA litigation with Edmonton-based Capital Power and TransCanada Corp. of Calgary and had agreed to a written offer from Enmax — though the company flatly denied any deal had been reached.

At an announcement of a new cap on power prices for consumers, Notley said she would not provide details about the potential settlements “because it’s all very tentative.”

On Enmax, the premier said she would not negotiate in public.

“We, I think, are getting reasonably close,” said Notley in Edmonton.

“We look forward to continuing conversations as we have had over the last many weeks, and we’ll try to get the best deal that we can for Albertans.”

Since last December, Enmax, TransCanada, ASTC Power Partnership (an association between TransCanada and AltaGas) and Capital Power have returned PPAs for coal-fired electricity generation to Alberta’s Balancing Pool, an independent government agency.

The PPA holders used an opt-out provision that allows the companies to terminate the agreements if any change in law makes the deals unprofitable or “more unprofitable.”

The companies cite the government’s Jan. 1 increase in the carbon levy on large greenhouse gas emitters as the cause.

In July, the government filed suit to have the “more unprofitable” clause declared void, claiming it was unlawfully enacted under the previous Progressive Conservative government at the behest of defunct Enron Corp.

The NDP, which has also not ruled out changing the legislation retroactively, has said returning the contracts would cost Albertans an additional $2 billion on their power bills by 2020, when the PPAs expire.

Enmax said “unequivocally” on Monday that there is no settlement between the utility and the provincial government.

Nenshi — who has been sharply critical of the NDP government’s handling of the PPA issue — told reporters he was “deeply shocked” that the government “would start talking about legal agreements that do not exist.”

“Clearly, there’s a game afoot, and it’s not a game I’m particularly happy to be playing,” he said.

The government source told Postmedia this week that if the deal is ratified, the two sides would divvy up the losses of the unprofitable PPAs, paving the way for the government to move ahead with its broader reforms of Alberta’s deregulated power market.

But Nenshi said the ongoing lawsuit “has the potential to completely ruin Enmax’s dividend to the city and may have the potential to increase debt.”

In question period Tuesday, Don MacIntyre, Wildrose’s electricity and renewables critic, demanded to know if the government was lying or was accusing Nenshi and Enmax of lying.

MacIntyre said in an interview that the possibility of a settlement with the various companies showed that “the government realized its court case was a sham and didn’t have a snowball’s chance in hell.”

He said the NDP’s “heavy-handed and draconian” threat of a retroactive change to legislation is forcing the companies to settle.

Progressive Conservative energy critic Rick Fraser said the Tories are hearing that the government is offering the utilities “first dibs” on new contracts to provide renewable power, as the NDP moves to a 30 per cent target for renewables by 2030.

“It’s government meddling,” he said.

While Enmax reiterated Tuesday there was no deal with the province, a statement issued by the company prior to Notley’s comments suggested a resolution could potentially be found.

“There are a number of elements, including some significant ones that are not financial in nature, that must be addressed before anything can be resolved,” said the statement from Enmax spokeswoman Doris Kaufmann Woodcock.

“We are, however, prepared to rely on the courts to resolve this matter.”