Alberta Politics Thread

[Makarov]

Originally Posted by Resolute 14

Well, there's yet another thing Notley lied about then. She said she wasn't going to spend taxpayer dollars on what amounted to party promotion/advertising. Given this lawsuit is essentially the NDP suing the Government of Alberta, she is spending our money to promote her party's position.

Come on. It looks like there is much to criticize about the government's position here without resorting to absolute fiction. Your claim that this action is essentially the NDP suing the government of Alberta is nonsensical. The Attorney General of Alberta is the Applicant for fata's sake.

[Resolute 14]

Makarov, the Government of Alberta (as represented by the NDP) is arguing the Government of Alberta (as represented by the PCs) was not allowed to phrase the exit clause the way it did.

I realize the NDP is engaging in sophistry to make themselves seem like the victims somehow, but as a practical matter, this really is a government suing itself.

[Makarov]

Originally Posted by Resolute 14

Makarov, the Government of Alberta (as represented by the NDP) is arguing the Government of Alberta (as represented by the PCs) was not allowed to phrase the exit clause the way it did.

I realize the NDP is engaging in sophistry to make themselves seem like the victims somehow, but as a practical matter, this really is a government suing itself.

Actually, the province's claim is that the Alberta Utilities Commission, an independent, quasi-judicial administrative tribunal, lacked the jurisdiction to make the last minute amendments that are at issue here (amendments to the "change in law" provisions.

PPAs were not "negotiated" by the Alberta government. They are not agreements. They are products of a legislated process and were ultimately created by the Commission (an independent administrative body). Most of the angry rhetoric in this about reneging on agreements is totally misplaced, frankly.

[Makarov]

Originally Posted by Delgar

This keeps getting better. The ads are I'm sure worth the $100K.

On this issue of lack of public hearings, remember, this was the government itself that made the clarification before going into a type of bid process, and the results have been, over time and until now, very good for the balancing pool and consumers for over a decade.

The lack of certain formalities such as a further public hearing on a clarification statement, where joe taxpayer could have objected to the clause interpretation, matters little now-- its 16 years after the fact and billions of dollars have now changed hands as a result. There is no going back. It was the government and its board acting in sync.

It may be different in, for example, a situation where someone suddenly has a liberty at stake and a law was not passed properly, but this is not that sort of situation. The clarification has had an impact of every resident of Alberta and every shareholder/investor/analyst etc. and everyone has lived under its benefits or detriment for a long time now.

Its potentially the greatest application of laches or a form of estoppel in common law history if the lawsuit gets that far.




https://en.wikipedia.org/wiki/Laches_(equity)

https://en.wikipedia.org/wiki/Estoppel

Interestingly, the province's application appears to allege that, during the auction process, only Enron and the Commission were aware of the Commission's decision (or "interpretation") amending the "change of law" provisions. Therefore I expect that the province will argue that there was no reliance by the other buyers in the PPA public auction and therefore the doctrine of laches does not apply.

Also, where the claim is that an action was ultra vires in the division of powers sense, the doctrine of laches does not apply. I somewhat sheepishly admit that I do not know whether it applies in the context of a tribunal exceeding its jurisdiction under its enabling legislation (as its never come up for me). But, it seems possible that it may not. If I have time today, I may do a little reading on this.

[Makarov]

I finally get to enjoy being an administrative law nerd on the Internet.

[monkeyman]

IMO, taking the utility providers to court to try and undo a 16 year agreement is actually even stupider than just admiting they didn't know about or understand the ramifications of the original deal. You think it's ugly now, wait until you try untangling a deal in which billions of dollars have changed hands.
But it's really just par for the course for the NDP.
Should I mark you down for 12 on that par 3 Rachel. Yes, i know, the course is completely ruined by the previous players. I'd like to point out though, I tried to warn you against putting with your 6 iron...

[GGG]

Originally Posted by Makarov

Again, PPAs are not contracts.

I keep seeing people say this but can you explain (or point to a post explaining it if someone already has) the difference between the a PPA and typical contract and what the effects of the distinction are from a legal perspective?

[Makarov]

Originally Posted by monkeyman

IMO, taking the utility providers to court to try and undo a 16 year agreement is actually even stupider than just admiting they didn't know about or understand the ramifications of the original deal. You think it's ugly now, wait until you try untangling a deal in which billions of dollars have changed hands.
But it's really just par for the course for the NDP.
Should I mark you down for 12 on that par 3 Rachel. Yes, i know, the course is completely ruined by the previous players. I'd like to point out though, I tried to warn you against putting with your 6 iron...

One more time: it wasn't an agreement (at least in any conventional sense). And, allegedly at least, almost none of buyers were even aware of the change during the auction process.

[Weitz]

Originally Posted by Makarov

Interestingly, the province's application appears to allege that, during the auction process, only Enron and the Commission were aware of the Commission's decision (or "interpretation") amending the "change of law" provisions. Therefore I expect that the province will argue that there was no reliance by the other buyers in the PPA public auction and therefore the doctrine of laches does not apply.

Also, where the claim is that an action was ultra vires in the division of powers sense, the doctrine of laches does not apply. I somewhat sheepishly admit that I do not know whether it applies in the context of a tribunal exceeding its jurisdiction under its enabling legislation (as its never come up for me). But, it seems possible that it may not. If I have time today, I may do a little reading on this.

Why does Capital Power claim then that:

"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"

[Makarov]

Originally Posted by GGG

I keep seeing people say this but can you explain (or point to a post explaining it if someone already has) the difference between the a PPA and typical contract and what the effects of the distinction are from a legal perspective?

I think my post 2364 explains it pretty succinctly (at least my view on it). These are definitely not contracts that were negotiated. Essentially, the province enacting legislation giving the Utilities Commisson the authority to create and auction PPAs (to achieve certain policy goals). The legislation set out a process of public consultation that the Commission was required to undergo (presumably to help it come up with terms of the PPAs that fairly balanced the interests of all stakeholders. At the end of that process, buyers were given the opportunity to bid on PPAs at a public auction.

[Makarov]

Originally Posted by Weitz

Why does Capital Power claim then that:

"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"

Well, there may be differing views on exactly what happened 16 years ago. Not exactly surprising.

I would note though that there was always a change of law provision in the PPAs. However, the language changed the day before the auction. The issue is whether or not buyers were aware of the change in language, not the existence of a change in law provision. It's not at all clear what Capital Power is referring to above.

[monkeyman]

Originally Posted by Makarov

One more time: it wasn't an agreement (at least in any conventional sense). And, allegedly at least, almost none of buyers were even aware of the change during the auction process.

I don't think it matters, it's really just semantics. It was an understanding between two parties in which billions of dollars changed hands.
Also, wouldn't it be worse for the government if the utilities companies didn't know. since they're alleging what took place is illegal, wouldn't it be better if the utility companies were complicit with the illegal act? I mean if your going to sue them over it...

[Makarov]

Originally Posted by monkeyman

I don't think it matters, it's really just semantics. It was an understanding between two parties in which billions of dollars changed hands.
Also, wouldn't it be worse for the government if the utilities companies didn't know. since they're alleging what took place is illegal, wouldn't it be better if the utility companies were complicit with the illegal act? I mean if your going to sue them over it...

Firstly, even if you want to view PPAs as an agreement or contract between two parties (which I think is flawed), then you at least have to view them as agreements between the buyer and the Utilities Commission (which determined the terms), not the government.

Also, it's worth noting that this is an application for judicial review. It's not a statement of claim. No one is being sued (per se). The government is challenging the decision of the Utilities Commission. It's not challenging the conduct or actions of the buyers (although no doubt their interests are directly affected by the outcome).

[Zarley]

Relevant to the discussion:

Commencing in the mid-1990’s the Province of Alberta began a process through which the Province’s electricity sector was to be restructured. The Electric Utilities Act (Alberta) (“EUA”) provided for a transition period to full deregulation of the electrical generation through the implementation of power purchase arrangements (“PPAs”) covering the vast majority of the regulated power plants.

PPAs are one of the mechanisms used by the Government of Alberta to introduce competition into the supply of thermal electric power from regulated generating units.
The PPA’s were intended to allow the Owners of the power generating facilities a reasonable opportunity to recover their fixed and variable costs of generation while transferring the right to offer the output of the plants into the power pool to intermediaries (Buyers).

The PPAs govern the relationship between the Owner and the Buyer in a manner similar to a contract but are not negotiated contracts they are statutory instruments imposed upon the parties by the legislation.

Under the applicable legislation, the terms of each PPA for each power generation facility were determined by an Independent Assessment Team (“IAT”) which examined a number of cost factors in relation to each power generation facility including operating characteristics, fixed costs and variable costs. Pursuant to Section 45.5(2) of the EUA, the IAT was required to determine PPAs that were “just and reasonable” and that, among other things, they were to:

“Provide the Owner with a reasonable opportunity to recover the fixed and variable costs of generating electricity at the expected available capacity of the generating unit over the effective term;

Provide the Owner with a reasonable opportunity to achieve efficiency through incentives including cost and output incentives over the effective term;

Establish operational and financial terms and conditions;

Provide the Owner with incentives for any future ongoing investment in the generating unit over the effective term.”

http://www.balancingpool.ca/about-us/ppa-information/

[Frequitude]

Originally Posted by Makarov

I finally get to enjoy being an administrative law nerd on the Internet.

I really appreciate it, Makarov. Puts some good meat on the discussion instead of just cherry picking "NDP are dumb" comments which I'm obviously contributing to. Your posts really do have me at least considering that the NDP might just have a case, even if it's an after the fact attempt to clean up a mess they created by not knowing the clause was in there.

Originally Posted by Weitz

Why does Capital Power claim then that:

"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"

I'd assume because it helps them get out of the PPAs which is something they want. Just playing the game.

[Makarov]

Originally Posted by Frequitude

I really appreciate it, Makarov. Puts some good meat on the discussion instead of just cherry picking "NDP are dumb" comments which I'm obviously contributing to. Your posts really do have me at least considering that the NDP might just have a case, even if it's an after the fact attempt to clean up a mess they created by not knowing the clause was in there.

I'd assume because it helps them get out of the PPAs which is something they want. Just playing the game.

Thanks. Just for the record, I'm not suggesting that the current government hasn't made mistakes or that the province's application is even likely to succeed. I'm just suggesting that it is all quite a bit more complex and nuanced than most posts in this thread presume.

[OMG!WTF!]

The really stupid thing, not the most stupid, but pretty stupid, is the whole point of the carbon tax and thus this whole problem, is to get us off coal to improve our environment and save us from global warming. Now we're suing power providers so that they keep using coal. How stupid is that? Just use the billions in carbon tax to payout the "contracts" and essentially close coal plants sooner.

[Bootsy]

Originally Posted by OMG!WTF!

The really stupid thing, not the most stupid, but pretty stupid, is the whole point of the carbon tax and thus this whole problem, is to get us off coal to improve our environment and save us from global warming. Now we're suing power providers so that they keep using coal. How stupid is that? Just use the billions in carbon tax to payout the "contracts" and essentially close coal plants sooner.

It reinforces that the carbon tax has never been about the enviroment , it's about the redistribution of wealth. Falsly using "green" propaganda to put in socialist policies.
The longer the charade goes on the more it'll get exposed for what it really is.

[Kjesse]

I may be coming off particularly heavy handed speaking about the NDP here and I'm glad to have read the comments of Makarov dealing with some of the administrative aspects. That all being said the analysis doesn't really change and I don't think the province can get away from what its board did 16 years ago, and I still see it as suing itself.

I remain of the view that the NDP by its actions here have demonstrated rank incompetence, poor judgment, and the blind pursuit of ideology at the expense of all Albertans.

[Makarov]

Originally Posted by OMG!WTF!

The really stupid thing, not the most stupid, but pretty stupid, is the whole point of the carbon tax and thus this whole problem, is to get us off coal to improve our environment and save us from global warming. Now we're suing power providers so that they keep using coal. How stupid is that? Just use the billions in carbon tax to payout the "contracts" and essentially close coal plants sooner.

As I understand it, cancellation of a PPA has zero effect on the operation of any power plant. It simply results in the province having to purchase electricity from the affected plant and sell it to consumers at a loss (rather than the PPA doing the same.)

(Admittedly, I'm a bit fuzzy on this aspect.)