Alberta Politics Thread

[transplant99]

I still can't wrap my head around the coal issue as I understand it. (and i may very well be misinformed on this)

I get it...coal burning is not good for the enviroment/air quality etc but at this point its still the cheapest option.

Thing is though that the coal itself will still be burned to make power....just not within Alberta borders. So the government will still make money from coal sales but other consumers will get the economic benefit of buying electricity generated from said coal.

Not a thing changes as far as enviromental benefits (which is supposed to be the entire reason for it....right?) only that the coal mined and sold from Alberta mines are no longer a benefit to anyone other than those employed there while, everybody elses utility bills skyrocket to ridiculous heights and affecting those who can afford them the least...the most.

Mind boggling incompetance if this is indeed how things play out and truly shows how any NDP government cares only for ideology and simply doesnt care about the people those ideals hurt.

Common sense is something they couldn't possibly incorporate because The Manifesto doesn't allow it.

[Slava]

Originally Posted by Bring_Back_Shantz

Firstly, it's not legislation, it's a contract.
It's not like the government altered a pre existing law to add this change.
This was a clause that was altered/inserted prior to both parties agreeing to a contract. Either side could have objected and walked away/not signed on to the agreement.
Big difference.

Secondly, no we don't pay this cost one way or the other.
In this case with the PPAs going back to the balancing pool, the losses that these companines would have suffered themselves will be passed on to us, as now the Balancing pool has to purchase this power and sell it at a loss.

People who are saying that these losses/costs would just get passed on to the consumer if the PPAs weren't canceled have no idea how the power market works (As it seems, neither does the current Government).

Were the PPAs already unprofitable?
Yup

Are they now more unprofitable?
Yup

Do the PPAs include an out clause for specifically this kind of situation?
Yup, that's the whole issue.

Trust me, I wish that either this clause didn't exist, or that there was some way out of it other than suing and making stupid statements like "This Enron clause is illegal...rabble rabble rabble". I don't want that $2 billion in losses showing up on my electricty bill.
That is issue #1.

Issue #2 is that we now have a government who was clearly incompetent in this case, and even though they've admitted that the didn't read contracts that have been in force for 16 years, which has caused this debacle, they are now doubling down by suing over it.

That's exactly the kind of governing I want...."Why should we be expected to be held to these obligations we didn't bother to read?"

I think that you and I basically agree and are saying the same thing (although I mistakenly called this legislation and that was point out to me pages ago).

The thing is that one way or another the citizens are going to pay. The Balancing Pools either eat this and it comes back to the citizens because they will recoup the losses on our utility bills. If it were to go the other way then the utilities themselves lose directly and we as owners of the utility here in Calgary get that loss.

So that is the issue to me. I never said that I like the way that the NDP is handling this (I don't). Only that the utility is using this legislation (carbon tax) to get out of something that isn't profitable to begin with.

[Zarley]

Originally Posted by Slava

So that is the issue to me. I never said that I like the way that the NDP is handling this (I don't). Only that the utility is using this legislation (carbon tax) to get out of something that isn't profitable to begin with.

Is there publicly available evidence that the PAAs put forward for termination unprofitable prior to the carbon tax coming in?

I took a quick look but can't seem to find anything other than claims from our esteemed deputy premier.

[Slava]

Originally Posted by Zarley

Is there publicly available evidence that the PAAs put forward for termination unprofitable prior to the carbon tax coming in?

I took a quick look but can't seem to find anything other than claims from our esteemed deputy premier.

I don't know. Really almost everything I know about PPAs comes from a lengthy discussion with a friend who is an economist in utilities. I think its a complex issue though, so I asked him for an explanation so that I would understand what is happening here.

[Wiggum_PI]

Might have been posted already, but Capital Power had a good press release on the issue.

“When companies purchased the PPAs at auction, they bid on the Arrangements based on their terms, which included the change in law protection. Collectively, we and other Buyers paid $3 billion for the PPAs — money that was returned to Albertans by the Government through the Balancing Pool. Buyers would have paid substantially less to purchase any PPA that was missing a change in law clause.

http://www.capitalpower.com/MediaRoo...07-2016-2.aspx

[CorsiHockeyLeague]

Originally Posted by Wiggum_PI

Might have been posted already, but Capital Power had a good press release on the issue.

That is very well put. It's sort of like getting angry at a player for relying on their no-trade clause. Well, they paid for it - presumably you would have had to pay more money to sign them to a deal without no-trade protection. They're using it for the exact purpose it was intended for, in the clear language of the clause. Why would you begrudge them relying on it?

[Mr.Coffee]

Originally Posted by Wiggum_PI

Might have been posted already, but Capital Power had a good press release on the issue.



http://www.capitalpower.com/MediaRoo...07-2016-2.aspx

This is a great analog for how oil companies feel about changes to the royalty structure.

Companies bid on public landsales on agreements that include a royalty payment to the Crown. Bids would be significantly less if companies knew that royalties could arbitrarily and unilaterally change, yet many people seem to think it's acceptable for the government to just change royalties too.

It's the same thing but seems to be viewed differently.

[Makarov]

Originally Posted by Mr.Coffee

Right so I guess to clarify they never said it was bad to be profitable, just that it doesn't matter because ultimately if you're a company and you are profitable you'll need to turn those profits in eventually to pay for social or "environmental" nets.

I use the term environmental extremely loosely because it's essentially just a tax as the money goes to general revenue

Originally Posted by Mr.Coffee

This is a great analog for how oil companies feel about changes to the royalty structure.

Companies bid on public landsales on agreements that include a royalty payment to the Crown. Bids would be significantly less if companies knew that royalties could arbitrarily and unilaterally change, yet many people seem to think it's acceptable for the government to just change royalties too.

It's the same thing but seems to be viewed differently.

Energy companies aren't familiar with the Constitution or the Natural Resource Transfer Acts?

[Makarov]

Originally Posted by CorsiHockeyLeague

That is very well put. It's sort of like getting angry at a player for relying on their no-trade clause. Well, they paid for it - presumably you would have had to pay more money to sign them to a deal without no-trade protection. They're using it for the exact purpose it was intended for, in the clear language of the clause. Why would you begrudge them relying on it?

As I'm sure you know, there are many reasons why a contract or certain provisions of a contract might be found void: unconsiability, inconsistency with the Human Rights Code or Laboir Standards Act, etc.

Of course, the PPAs don't appear to be contracts, at least in the ordinary sense. And they likely raise certain public law issues as well. I Truly don't knowhow much merit there is to the Province's claim or position. I'm glad that we have so many experienced lawyers on CalgaryPuck who are so confident that they do know.

[nik-]

We're not near fault lines, we don't flood, we don't really get disasters. We need nuclear for our baseline.

Obviously there's zero chance of that happening until the NDP are voted out next election.

[CorsiHockeyLeague]

Originally Posted by nik-

We're not near fault lines, we don't flood

You lost me.

[CaptainCrunch]

Originally Posted by Wiggum_PI

Sarah Hoffman seriously thinks the NDP has a good chance of winning in court, just crazy.



http://www.calgarysun.com/2016/07/26...ower-companies

I wish she was willing to bet her career on that.

[Fuzz]

Look at it this way...maybe a bureaucrat is trying to sink her and is telling her this is a sure thing.

[Fighting Banana Slug]

Originally Posted by Makarov

As I'm sure you know, there are many reasons why a contract or certain provisions of a contract might be found void: unconsiability, inconsistency with the Human Rights Code or Laboir Standards Act, etc.

Of course, the PPAs don't appear to be contracts, at least in the ordinary sense. And they likely raise certain public law issues as well. I Truly don't knowhow much merit there is to the Province's claim or position. I'm glad that we have so many experienced lawyers on CalgaryPuck who are so confident that they do know.

Not a contract? In the ordinary sense? Not sure what you think this is, but it is clearly a contractual issue.
The response from the government is baffling because the position seems to be that it didn't know the provision existed, or that it isn't "fair" or that it was included "last minute". None of which would hold any merit in contract. (Unless they think the companies were acting fraudulently, inserting the language into the governments own agreements! I don't think even the NDP are saying that).

Now, if the argument is that the language is vague and doesn't support termination (I haven't read the agreement), or that there isn't proof that the change in law made these agreements less profitable, I guess there is a chance. But even there, it doesn't sound like a difficult hurdle for Capital Power et al. to clear.

[puckedoff]

^ I thought they were challenging that the Gov't (or gov't unit) didn't have authority to grant such a clause.
Like if I go out and say the company I work for will buy $3bn in Dog Houses, my company would probably say "well this guys is actually a CalgaryPuckLawyer and does not have $3bn worth of authority to bind the company with" and they would not likely be bound by the contract

[Resolute 14]

The argument is that the government improperly allowed the "or more unprofitable" language to be added, not that the escape clause itself is illegal.

Basically, what the NDP is saying is that if these contracts were profitable, and their changes to law caused them to become unprofitable, then the escape clause is valid. However, since they were (according to the NDP) already unprofitable, this means Notley and Hoffman can rape them all they want with no repercussions whatsoever.

[Fighting Banana Slug]

Originally Posted by puckedoff

^ I thought they were challenging that the Gov't (or gov't unit) didn't have authority to grant such a clause.
Like if I go out and say the company I work for will buy $3bn in Dog Houses, my company would probably say "well this guys is actually a CalgaryPuckLawyer and does not have $3bn worth of authority to bind the company with" and they would not likely be bound by the contract

Honestly don't know where the government is going with this, but negotiating an agreement and then indicating that the person doesn't have the authority likely won't work. I am fairly confident that whoever signed the agreement had the authority to do so. Within the agreement there is also likely a representation that it had the authority to sign. It wasn't some dude off the street signing the thing. There is something called the indoor management rule which basically states that where an individual appears to have the authority to do something, the other party doesn't need to investigate further. That contract is still binding IMO.

[Fighting Banana Slug]

Originally Posted by Resolute 14

The argument is that the government improperly allowed the "or more unprofitable" language to be added, not that the escape clause itself is illegal.

Basically, what the NDP is saying is that if these contracts were profitable, and their changes to law caused them to become unprofitable, then the escape clause is valid. However, since they were (according to the NDP) already unprofitable, this means Notley and Hoffman can rape them all they want with no repercussions whatsoever.

The "or more unprofitable" language is definitely favourable to the industry side. However, I still can't imagine how it is improper. It isn't even particularly vague or ambiguous. Really don't see what the government can argue here.

[Resolute 14]

Originally Posted by Fighting Banana Slug

The "or more unprofitable" language is definitely favourable to the industry side. However, I still can't imagine how it is improper. It isn't even particularly vague or ambiguous. Really don't see what the government can argue here.

The logic is just fantastic.

$100,000 profit --> NDP changes law --> $100,000 loss --> Escape clause triggered.

$100,000 loss --> NDP changes law --> $10,000,000 loss --> Suck it, evil capitalist pigs!

[CaptainCrunch]

Originally Posted by Fighting Banana Slug

Honestly don't know where the government is going with this, but negotiating an agreement and then indicating that the person doesn't have the authority likely won't work. I am fairly confident that whoever signed the agreement had the authority to do so. Within the agreement there is also likely a representation that it had the authority to sign. It wasn't some dude off the street signing the thing. There is something called the indoor management rule which basically states that where an individual appears to have the authority to do something, the other party doesn't need to investigate further. That contract is still binding IMO.

So to me how this reads is that the NDP are going to take this to court, probably pay a BC lawyer a few million bucks, just so they can lose based on the stupid premise that the person that negotiated this agreement didn't have the authority to negotiate in the clause, and then they can shrug their shoulders and cry and then say its all the PC's fault.

So then we'll be on the hook for the $2 billion and the attached legal fees.

Sound right?