Quote:
Originally Posted by Regorium
The government's argument is that the carbon tax did not make the PPA's unprofitable, they were already unprofitable due to the awful spot pricing for electricity. However, a Query in 2000 clarified that the clause is not just talking about unprofitable, but includes "more unprofitable" in the definition. This torpedoes the government's case.
I don't think the government has a leg to stand on, but I think the clause itself is incredibly stupid. When times were good, the Buyers did not cancel PPA's for changes in law (SGER in 2007 for example), but now that times are bad, they are invoking the clause. I think that it should have to be shown that the Owner's increase in cost due to the change in law somehow cannot be feasibly passed to the consumer before the Buyer can terminate the contract without penalty.
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Why/do you actually think that?
It's one thing to say the clause should have been written that way, it's another entirely to say "I know how the clause was written, but it's dumb and shouldn't apply".
If you're saying the former, that's a stance I can understand, if it's the latter, that's a pretty unreasonable stance.
The fact of the matter is the government should have know companies cancelling their PPAs was a possibility/likelihood due to the carbon tax.
So they either didn't know these clauses existed, didn't understand them, or didn't have a plan in place to deal with the fallout.
That being said, most of the actually day to day work is being done by bureaucrats who do understand these things, so I have a hard time believing that they wouldn't bring this up, which means they either weren't consulted, or were ignored.
That's a whole lot of "eithers", but none of them paint a picture of a qualified/reasonable government.
The fact that they are now suing these companies and using language like "Secret clause" and "Enron clause", is an ugly attempt to blame their failure on companies that have to this point acted in good faith.