Alberta NDP going to court over PC's backroom deal with Enron
The NDP government is looking to take big electricity companies to court in order to protect Albertans from shouldering the costs connected to an alleged deal between the former PCs and Enron.
On Monday, the government released a series of emails that suggest that the PCs made a deal with one-time American energy giant Enron, which favoured electricity companies. The NDP says it was made at the last minute, without advising the public.
Furthermore, the NDP says that the emails reveal a loophole that could allow companies to pull out of the deal if government policies made them ‘unprofitable’.
The deal was signed back in the 1990s when the provincial government was moving to de-regulate the electricity market, leading them to sign an agreement to allow power companies to buy and sell contracts.
New documentation released by the NDP reveals that terminology in the deal was changed to “or more unprofitable” meaning that companies could withdraw from the agreement at any time if they are losing money.
“Clearly there was a backroom deal lobbied for at the last minute by Enron and they believe that is because of their cozy relationship and the fact that the government of the day trusted them that they were able to get this wording in that’s identified in these emails,” said Deputy Premier Sarah Hoffman.
The NDP says that if companies pull out now, Albertans would be left with nearly $2B in costs over the next four years tacked onto their power bills.
“It looks like it could be up to $2B in liabilities that these companies that made $10B in profits want to hand down back to the consumers and we certainly don’t think that’s fair,” Hoffman said.
This year, Calgary-based Enmax was the first to pull out, saying it knew about the clause before bidding years ago, and that “given the government’s change in law to carbon costs, Enmax’s actions on its PPAs were completely foreseeable, legal, and reasonable.”
Two of Alberta’s leading economists will release a report on the power purchase agreement issues on Tuesday.
The U of A’s Trevor Tombe and U of C’s Andrew Leache hope to shed some light on the issue and the real costs to Albertans.
Meanwhile, the case will go to court in November, when the province will ask to have the clause voided from the contract.
(With files from CTV Edmonton)