During the early months after the election it became clear climate change and carbon pollution would be at the forefront of the newly elected NDP government’s agenda.
They later announced their Climate Leadership Plan, which included a hefty new carbon tax for large-scale green house gas emitters in addition to early phase-out of coal-fired power plants.
The Carbon Tax implements a 66 per cent increase to the price of carbon under the Specified Gas Emitters Regulation.
This past week, Albertans watched as the electricity grid grew one step closer to finding out what a coal free Alberta could look like, as a third major power company terminated their power purchasing agreements (PPA) from the Sundance coal fired power generating facility west of Edmonton. These companies sited legislation changes for the reason as to why they are choosing to no longer purchase energy from some coal facilities.
These power purchasing agreements will now be handed back over to an entity called the Balancing Pool, a party set up during the deregulation of Alberta’s electricity system a number of years ago to provide stability for buyers and manufacturers of power.
If the Balancing Pool turns a profit, Albertans see lower electricity bills. If they are forced to pick up PPA cancellation slack, Albertans could be footing the bill.
The Balancing Pool must now make a decision as to whether or not they wish to pay out the contract or whether they wish to keep it running. They have yet to make a decision,however if they choose to terminate the contract it could mean an even earlier shut down for the Sundance facility.
Alberta Minister of Energy, Marg McCuiag-Boyd stated it is premature for the government to comment on whether Albertan’s will see higher electricity bills. She added in an email interview with Sylvan Lake News that the previous government did not design these power-purchasing contracts with Albertans in mind.
“Frankly, the poor design of these contracts allows companies to do very well when the price of electricity is high, then transfer all of the risk to Albertan’s when they are no longer profitable, this isn’t right,” said McCuiag-Boyd. “The department is currently considering all options as we work to protect ratepayers and tax payers.”
She added she feels the real issue is a market driven one, specifically how the historically low price of electricity is making the PPA’s uneconomical.
MLA for Innisfail-Sylvan Lake and Shadow Electricity and Renewables minister, Don MacIntyre, said he feels the companies are making a strong political statement against the NDP imposedCarbon Tax.
“I am fairly certain they [the provincial government] want to purposely engineer the demise of the deregulated system,” said MacIntyre. “They want to engineer an artificial increase in the price of electricity to get it above $60 per megawatt because the wind power companies will not invest in major builds here unless they can get $60-70 per megawatt and right now the pool is sitting at about $25.”
With hopes of having 30 percent of Alberta’s electric power come from renewable sources by 2030, the province certainly needs to make the option of renewables more appealing to power companies.
Capital Power spokesman, Mike Sheehan stated in an interview with Sylvan Lake News that the company will be proposing to build Halkirk 2, a 150 megawatt wind farm to be located near their existing wind facility in east-central Alberta. They are also proposing to build Genesee 4 and 5 – which is best positioned to be the next large scale natural gas fuelled generation project to be built in Alberta.
“Capital Power remains confident that implementing Alberta’s Climate Leadership Plan within the existing electricity market design is the best way to continue to attract investments that deliver reliable electricity, with a lower carbon footprint at a reasonable price for Alberta consumers and businesses.”
Sheehan explain Capital Power participated in consultations leading up to the Climate Leadership Plan in addition to submitting the Alberta Long Term Energy (ALTE) Shift, a market-based, ready-to-implement plan for achieving Alberta’s climate change goals.
“Two aspects we advocated for in our comments – keeping Alberta’s competitive electricity market and linking competitive process for increasing renewables to coal unit retirement– were included in the government’s plan,” said Sheehan.
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