[Tron_fdc]

Originally Posted by Flash Walken

Can you explain the coal capacity sell off a bit more?

Pre-deregulation the Ab government owned all the generating capacity in Alberta. When they decided to deregulate, they sold off all the coal gen plants in the province, for cents on the dollar.

Mike Cardinal took over the energy portfolio in July 2000. A month later, the government held its long-prepared auction of Power Purchase Arrangements (PPAs). Each PPA committed the bidder to buying the entire output from an individual generating station for 20 years. Dr. West claimed that 40 serious bidders were interested. Wrong. Seven firms bid, and only five won. Two winners were utilities themselves, Epcor and Enmax, the latter owned by the City of Calgary. Selling two-thirds of Alberta's electricity for two decades raised just $1.1 billion.

Why did so few companies bid? Because the PPAs were huge contracts. Few firms, even multinational petroleum producers, can afford to gamble on that scale for two decades in a sector they do not fully understand. Mr. Macnamara thinks Alberta ratepayers lost $3 billion in value due to the faulty structure of the PPA sale.

Alberta should have abandoned the PPAs, critics charge, after they failed to raise enough money and left far too few players in the electricity market. Under the auction rules, the province had the option of rejecting the PPA bids. Mr. Klein could have changed course and, for instance, followed Mr. Schwenk's proposal for a regulated core market. Or the government could have purchased the PPAs themselves and resold the power in more reasonable quantities, capturing the missing billions. Instead, the Tories ploughed straight ahead. The so-called competitive market would be dominated by just a few big players, the very reason that utilities were regulated in the first place.

http://fathersforlife.org/articles/r...-inflicted.htm