EDMONTON – Alberta has taken steps toward resolving a $2-billion lawsuit it launched against power providers over money-losing electricity contracts.
Deputy Premier Sarah Hoffman says Capital Power will pay the province $39 million and in return will be allowed to give back to the province a money-losing contract to purchase electricity.
“We’ve hit a big milestone,” Hoffman told reporters Thursday.
“By working together we are preventing Albertans from bearing the full cost of business losses through our electricity market.”
Hoffman said tentative deals have also been reached with TransCanada Energy and AltaGas on their power purchase arrangements, or PPAs.
Details of those agreements will be released once they have been finalized.
The province has not come to a deal with Calgary-based Enmax, but Hoffman said they’re still talking.
“I’m hopeful that we can move forward to a similar path with … Enmax to arrive at a result that is in the best interests of all Albertans,” she said.
Under the PPAs, the firms bought power from generators and then tried to sell it at a profit.
The province filed a lawsuit against the companies in July after the companies pulled out, effectively returning the money-losing deals to ratepayers.
The power companies said changes to the electricity system under the province’s new climate change plan had made the deals “more unprofitable,” thus triggering a contract clause that allowed them to pull out.
The province, however, said low power prices — not the climate plan — were to blame for the losses, and that the actions of the power companies could leave ratepayers on the hook for $2 billion.
The province also argued the PPAs’ “more unprofitable” exit clause was crafted illegally under questionable circumstances under the former Progressive Conservative government and therefore had no legal validity.
“We have never blamed these power companies for taking advantage of the mistakes that the former (Progressive) Conservative government made,” said Hoffman.
“The blame lies squarely on the former government — a government that had lost their way, a government that had forgotten who they worked for.”
The court action had become a sticking point given that Alberta is currently working with power producers to restructure the industry to ensure stability and fair prices as it phases out coal-fired electricity by 2030 to make way for more natural-gas fired power along with renewables like wind and solar.
Opposition critics accused Premier Rachel Notley of undermining the credibility of her entire government by saying last week she had not ruled out retroactive legislation to break the impasse.
Earlier Thursday, Environment Minister Shannon Phillips announced that Alberta will pay TransAlta, Capital Power and ATCO $97 million a year over the next 14 years to help them transition out of coal-fired power.