Alberta Proposes Deal to Close Coal-fired Power Plants

Alberta’s Premier Rachel Notley unveiled Alberta’s climate strategy
at a press conference in November 2015. A year later, the province
is realizing the full cost of that plan.
(Photo: THE CANADIAN PRESS/Amber Bracken)
The Alberta government might pay three coal power producers more than $1 billion over the next 14 years to compensate them for shutting down their plants early as part of its climate change agenda, the Calgary Herald reported. The province is nearing the end of negotiations over contract disputes that led to a controversial lawsuit, reaching three agreements with companies, two of which are tentative. Talks with a fourth player, Calgary-based public utility Enmax, are ongoing.

The deals are the latest in a series of changes the government has made to Alberta’s energy landscape to cut greenhouse gas emissions and produce cleaner power. The government’s climate change plan aims to shut down all coal-fired plants in Alberta by 2030, but six newer facilities were previously allowed to operate until as late as 2061, leading their owners to call for compensation. The province will pay TransAlta Corp., ATCO Ltd. and Capital Power Corp., which each own stakes in the plants, a total of $97 million annually over 14 years, beginning in 2017—for a total cost of almost $1.36 billion.

In related news, government officials said they had also made progress resolving a dispute over power purchase arrangements. Enmax, Capital Power, TransCanada Corp. and AltaGas Ltd. walked away from the power agreements when the province increased the carbon levy on large industrial emitters, citing an opt-out clause that allows them to terminate the deals when a change in law makes the power pacts unprofitable. If the government is unable to work out a deal, Albertans could be on the hook for $2 billion.

As featured in Womp 2016 Vol 12 -