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Calgary Mayor Naheed Nenshi worries Premier Rachel Notley’s NDP government could be setting a “very dangerous precedent” and sending very strong signals that the province is “closed for business” in its fight over power purchase arrangements.

Rumours are swirling the government is considering using legislation to retro-actively change the power contracts signed by several power companies 16 years ago. These contracts are currently the centre of a legal fight involving the government and energy companies that include Calgary-based Enmax.

READ MORE: Alberta NDP to challenge coal power buying rule known as ‘Enron clause’

“If I were giving them advice on this, I would say, ‘holy cannoli, are you really thinking about this?'” Nenshi told reporters in Calgary on Tuesday.

“Who would ever invest in this province if they thought the government would just simply invalidate their contract decades later?” Tweet This

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Pointing to the carbon tax, Enmax, Capital Power and TransCanada all handed power purchase arrangements back to the province’s balancing pool due to a provision that allows companies to walk away if a change in legislation renders them more unprofitable.

The government argues the provision was improperly put in by the Progressive Conservative government of the day and should be ruled invalid. The case is only in its early stages and the government isn’t outright denying it’s considering legislation.

WATCH: Interim PC Leader Ric McIver reacts to the NDP government’s allegations the Power Purchase Agreements contracts are illegal

“Our government believes that electricity market players should pay for electricity market losses not the hardworking Alberta families and businesses who pay their electricity bills every month,” Energy Minister Marg McCuaig-Boyd said in a statement provided to Global News.

The energy industry stands firm that the lawsuit is without merit and is watching what’s happening inside the legislature very closely.

“We would be concerned that imposing legislation would have a further chilling effect on the investment climate in Alberta,” Enmax Senior Media Relations Advisor Doris Kaufmann Woodcock said in a statement.

“That’s just not in the best interests of Albertans or the developing renewable electricity market.” Tweet This

The opposition argues all the government is accomplishing is further harm to the province’s reputation.

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“This is unprecedented and each day speculation grows about the government trying to break contracts and change the rules, further damage will be done to Alberta’s power market and our economy,” Wildrose electricity and renewables critic Don MacIntyre said in a statement.

“What investor would want to do business with a government that sees no problem in abusing its power to abolish longstanding legal contracts?” PC energy and environment critic Rick Fraser added in a statement.