Alberta, ENMAX reach settlement over power purchase agreement fight

Alberta government will provide a payment and allow Enmax to transfer carbon offset credits

The Government of Alberta and ENMAX have agreed to let the company withdraw from the Power Purchase Arrangement (PPA) legal action initiated in 2016 by the Attorney General, according to a press release.

The NDP government had claimed power purchase agreements entered into by the previous PC Alberta government were part of a secret deal called the “Enron Clause”, and had begun litigation to prevent the purchase agreements from being offloaded back into the balancing pool, just because they aren’t profitable anymore.

If the PPA’s were terminated, the losses would be transferred to a financial account called the Balancing Pool, which is wholly funded by residential and commercial electricity consumers.

The government contends that this attempted offload of PPAs is being implemented through a regulatory clause that was unlawfully enacted when the province’s electricity system was deregulated in 2000.

“We’re pleased to have this final agreement in place as we continue taking action to provide Albertans a more stable, affordable and reliable electricity system. This agreement ensures we can focus our efforts and energy on this important work,” said Margaret McCuaig-Boyd, minister of energy.

“The Government of Alberta took legal action to fight to protect Albertans, and many parties, including ENMAX, were regrettably caught up in our action against the past government.”

The agreement reached provides for the transfer from ENMAX to the Balancing Pool of 166,667 carbon offset credits and for a payment of equivalent value to ENMAX from the Balancing Pool for previously disputed and unpaid dispatch services and PPA transition matters.

The offset credits will allow the Balancing Pool greater flexibility in meeting its future greenhouse gas emissions compliance obligations for its generation assets.

“We are satisfied that this agreement is in the best interests of our Shareholder, the City of Calgary, and all Albertans. We are glad to put this behind us as we continue to focus on creating value and serving our customers and communities,” said Gianna Manes, ENMAX President and CEO.

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