A public backlash is growing over the Alberta government's unprecedented legal challenge questioning an arrangement made between the former Conservative government and electricity companies during the move to a deregulated electricity system back in 2000.

Deputy premier Sarah Hoffman announced the legal action early last week. The province is now spending $100,000 to defend its position by taking out ads in 100 newspapers and across social media sites, said Matt Williamson, a spokesman for Premier Rachel Notley.

"We have a responsibility to share information with Albertans about why we are going to court to protect them from being forced to pay up to $2 billion to cover the business losses of power companies," Williamson said.

(CBC)

The government alleges that during the deregulation process, a last-minute clause was forged in secret by the Conservative cabinet of the day, under pressure from defunct energy giant Enron.

The so-called Enron clause gave power companies a loophole to hand off Power Purchase Arrangements to the government-created Balancing Pool if future policy changes made them "more unprofitable."

The government is seeking a judicial order declaring the clause void. It also wants the court to quash a recent decision by the Balancing Pool to accept the return of a money-losing PPA that had been held by Enmax.

Since the NDP government increased the carbon levy on large emitters Jan. 1, Enmax and three other power companies have applied to terminate their arrangements to buy electricity from coal-fired plants.

Hoffman said losses associated with ending the arrangements early are estimated to be as much as $2 billion by 2020.

But many questions are being raised about the reasons behind the legal action, its potential impact on consumer power bills, and whether the NDP government was aware of the implications of its sweeping climate-change plan when it was unveiled last fall, then passed into law this spring.

Wildrose Leader Brian Jean says Albertans need to know when the NDP learned about the exit clause. (Jason Franson/Canadian Press)

Calgary mayor Naheed Nenshi, who is normally complimentary of the NDP government, was uncharacteristically harsh and pointed when asked to comment on the legal challenge.

Province is 'wrong,' Nenshi says

"On this one, they're wrong," said Nenshi, who finds himself in the position of defending Enmax, which is wholly owned by the City of Calgary.

"This entire lawsuit really doesn't make any sense," Nenshi said. He said he wonders how consumers could be hurt, if consumers themselves own the utility, as in the case of Enmax.

"It's particularly weird, because I happen to know, that they (the government) were warned repeatedly that this may trigger the very thing they're suing themselves about right now.

"Had they done the climate change policy just slightly differently, it would have been able to avoid this trigger, so I'm pretty shocked we're here."

Nenshi said he hoped his rebuke of the provincial government won't have negative consequences for Calgary.

"If it does then, well then they're different politicians than I was expecting them to be."

The official Opposition Wildrose, the PCs, and the Liberals are all condemning the legal action.

When did government learn about clause?

The Wildrose has dredged up documents released under freedom of information that shed light on discussions about the impact of potential PPA cancellation as far back as November and December of 2015.

That was months before the new climate change plan became law in June.

In a statement, Wildrose Leader Brian Jean said the NDP government "owes it to the people of Alberta to come clean about when they learned about the exit clause built into these arrangements and why they went ahead with a policy decision that will raise the cost of electricity for every Albertan."

Riopel says government needs to give more detail (Edmonton Chamber of Commerce)

The confrontation between big business and the provincial government is the last thing the economy needs right now, said Janet Riopel, president and CEO of the Edmonton Chamber of Commerce.

Riopel is urging the provincial government to mediate a solution to the problem with the companies.

"I think there's more heat than light on this issue right now," Riopel said. "I think we need more details on what the impacts would be, and the only way we can get those is to bring these partners together."





