News / Calgary

Alberta NDP didn’t consult power companies when hiking carbon levy for large emitters

The NDP government insists the former PC government had consulted power companies when announcing levy changes

Enmax says it wasn't consulted by the NDP government when it hiked the levy for large emitters in June 2015. Deputy Premier Sarah Hoffman says ministers weren't made aware of the clause until March 2016.

Courtesy / Government of Alberta

Enmax says it wasn't consulted by the NDP government when it hiked the levy for large emitters in June 2015. Deputy Premier Sarah Hoffman says ministers weren't made aware of the clause until March 2016.

Capital Power says it had no opportunity to advise the government about potential consequences with hiking the carbon levy on their power purchasing agreement (PPA), as they and Enmax claim they were never consulted by the NDP prior to the levy increase in June 2015. 

Last week, Deputy Premier Sarah Hoffman said ministers weren’t aware of the “Enron clause” — which lets power companies offload money-losing contracts if government actions make them unprofitable "or more unprofitable” — until March 2016. 

This resulted in the government to file a lawsuit that hopes to remove the “or-more-unprofitable” phrasing so taxpayers aren’t on the hook for $2 billion by assuming the losses through the PPAs being returned to Balancing Pool.

On Monday, both Capital Power and Enmax told Metro they were never consulted by the government about the levy hike. 

Capital Power said it learned of the hike shortly before the June 25, 2015 press conference hosted by Environment Minister Shannon Phillips. 

“While we participated in, and supported, the announcement of the SGER (Specified Gas Emitters Regulation) changes, we were not consulted about how large the changes would be, or asked by elected officials to identify the consequences,” Capital Power said in a statement. 

Enmax said it was made aware of the carbon levy increase during the news conference, adding the government’s change in SGER law is what triggered the organization to analyze and determine that the increase to carbon costs affected the profitability of its PPAs.

However, Ministry of Energy spokesman Brad Hartle said the carbon levy hike on large emitters shouldn’t have been a surprise to the companies affected.

He said the former PC government consulted power companies when the PCs announced they were extending SGER regulations to June 2015, which is when the NDP government increased them.

“We will remain leaders as we work with our local, provincial, national and international partners to further address climate change,” former Minister of Environment Kyle Fawcett said in a December news release. 

Hartle said the phrasing, “work with local partners,” suggests the PCs were consulting power companies.

But Interim PC Leader Ric McIver, who said he wasn’t on the file during the time, isn’t buying the NDP’s claims that affected energy companies were consulted prior to it forming government.

“I’m not surprised they’ve come up with another story,” he said. “Enmax has been far more credible. I think I’d believe them over the government.”

Capital Power said the changes to SGER — which they say makes the PPAs uneconomic — had no bearing on the importance of climate change.

“The termination of the PPAs is one of the costs of making that transition,” it said.

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