The former head of Alberta's electricity Balancing Pool — an agency the government established in 1999 to ease the transition to a deregulated electricity market — says consumers will feel the effects of the NDP government's climate change legislation.

Gary Reynolds says TransCanada's decision to cancel power purchase arrangements with coal-fired power plants this week could leave consumers on the hook for $500 million a year.

TransCanada served notice Monday that it will terminate contracts due to higher carbon costs and low power prices.

Enmax made a similar move in January.

Reynolds, who was president and CEO of the agency from 2003 to 2011, says while the 'pool' has a surplus that will likely shield consumers from any increases this year, the situation could change quickly.

Gary Reynolds says the Balancing Pool may be forced to charge electricity customers, rather than generate rebates. (Balancing Pool)

"If they do turn out to be that significant, then the Balancing Pool's cash surplus will be gone and the Balancing Pool will be required, rather than make a rebate back to consumers, to assess a charge to consumers to cover those losses," Reynolds said.

"Ultimately and particularly in a scenario where power pool prices remain low, those losses, if they're incurred by the balancing pool, have to be passed on to power consumers in Alberta."

Alberta's energy minister told CBC News this week TransCanada's decision to cancel the contracts will have "minimal impact" on consumers.