The contentious lawsuit over power purchase agreements has drawn the attention of researchers with the University of Calgary’s School of Public Policy.
Economist Trevor Tombe says a claim of a $2-billion cost to consumers by the provincial government is overstated.
He says analysis based on the lower-priced environment shows the cost to Albertans, if power companies turned in their contracts, would be closer to $600-million.
Tombe says that would work out to about $2.25/month for customers.
Power distributors including Enmax, TransCanada, Capital Power and AltaGas are trying to return a group of coal power contracts for the four remaining years to a government-run balancing pool because they say the NDP’s carbon regulations have made them unprofitable.
The Alberta government says it is taking legal action to protect Albertans from the financial burden of the now unprofitable PPAs.
Statement from government website:
Government action to protect Albertans
Facing poor market conditions, four PPA Buyers have applied to terminate their PPAs early, based on an unlawful agreement made behind closed doors between Enron and a former government.
If these PPAs are terminated as the power companies want, their losses would be transferred to a financial account called the Balancing Pool, which is wholly funded by residential and commercial electricity consumers. If these PPAs are permitted to be returned to the Balancing Pool, losses are estimated to be as much as $2 billion by 2020.
The government fundamentally disagrees with this position, in which financial losses incurred by the private sector are passed to consumers on the basis of an unlawful clause that was hidden from the public.