The province has released new documents, dozens and dozens of pages, to make its public case in relation to legal action against several power companies.
Two weeks ago, the NDP government announced its plan “to protect power consumers from paying costs of the unlawful ‘Enron clause.'”
“Clearly there is a backroom deal lobbied for at the last minute by Enron,” deputy premier Sarah Hoffman told reporters.
At issue is something called Power Purchase Agreements (PPAs), a tool of the deregulated electricity market. Several power companies want to hand back unprofitable PPAs, which could cost consumers up to $2 billion.
The companies are using a clause lobbied for by Enron, a now disgraced American electricity operator.
“Certainly that isn’t a standard clause,” says Sarah Hoffman.
Emails show that 16 years ago, Enron asked the province for last-minute changes.
Initially, companies could back out if changes to law made them unprofitable. Enron successfully added the phrase “or more unprofitable.”
In an email from July 2000, Enron’s Robert Hemstock wrote: “While this may sound a bit like I’m tooting my own horn… I thought I would let you know I am quite proud of having accomplished the results we achieved.”
Hemstock added the government even told him he was successful “based in large part on our relationship.”
“The clause that was added through these side conversations and was never publicized in the traditional way that regulations are certainly isn’t in the public interest,” the deputy premier told Global News.
“I know all the people that were involved in it,” says David Gray, an energy economist and the former executive director of the Utilities Consumer Advocate
Gray is not surprised the clause made it in. He suggests the province has picked the wrong fight.
“It doesn’t matter whose name is on the name plate any given time,” says Gray. “Governments change all the time. At the end of the day, it’s still the same legal entity, the Government of Alberta.
Gray suggests an agreement is an agreement no matter who is in charge.
“If you want to protect consumers from volatile electricity prices, you could go towards either a managed market or re-regulation,” says Gray.
For now, the province continues to push ahead in its legal challenge.
“It’s very atypical to have a clause like this that basically gives all the liabilities back to one side of the contract,” says Hoffman.
Enron by caleyramsay on Scribd
Comments