Alberta Politics Thread

[Makarov]

Originally Posted by CaptainCrunch

From the Financial Post yesterday

http://business.financialpost.com/fp...ded-investment

As I've already noted in this thread, there are a large number of important errors with the views expressed in that articleabout "legal entities" and "contracts". The author either has not read the province's application pleadings or did not understand them.

[Makarov]

Originally Posted by Locke

Actually, as complex as you believe it is, once the wheat is separated from the chaff it appears to boil down to more or less exactly that simple.

When everyone in the room is pointing and laughing at you, you become left with only two options:

1. You are the smartest person in the room who knows something everyone, literally everyone, does not.

2. You screwed up.

The NDP are not the smartest people in the room.

How has the wheat been separated from the chaff? The respondents haven't even filed their responses yet (let alone having been heard by the Court of Queen's Bench).

[OMG!WTF!]

I think the frustrating thing is that the intent of the arrangements is crystal clear. Only the shiftiest lawyers will argue the NDP side of things. The PPA's in no uncertain terms say carbon levy. There are no uncertain terms regarding change of law. The intent of the arrangement is so obvious even without the last second, back room, secret, Enron clause. These PPA'S worked exactly as designed and we absolutely would have benefitted by using them in their exact form to create our new green power grid. There is literally no benefit to anyone if we win the lawsuit. We are now on our own for power grid infrastructure. The best case scenario if we win is that our four main power companies lose market share and move on to profitable ventures elsewhere while not a single provider looks to do business in Alberta. It's just maniacally stupid.

[CaptainCrunch]

I'm just curious about this whole thing in terms of how its going to be argued.

I'm pretty sure that the Utilities will basically state that they wouldn't have

1) Bought the PPA's without that provision
2) Paid near as much for the PPA's without the provision for less profitable.

They could also argue that the provision has been in there for more then a decade and has never been argued or taken out.

The NDP government which knew about the provision for less profitable didn't raise a stink until well into their government when it was clear that the Utilities were using it.

I'm not a lawyer, but I'm pretty sure that a new government can't come in and just change the rules of the game because they don't like it.

[Locke]

Originally Posted by Makarov

As I've already noted in this thread, there are a large number of important errors with the views expressed in that articleabout "legal entities" and "contracts". The author either has not read the province's application pleadings or did not understand them.

Originally Posted by Makarov

How has the wheat been separated from the chaff? The respondents haven't even filed their responses yet (let alone having been heard by the Court of Queen's Bench).

I totally understand where you're coming from, there are technicalities and intricacies that most of us dont know or understand or honestly even care about.

Thats part of the issue, the NDP are trying to wriggle out of this on a technicality and pretty much everyone can see that, hence the huge advertising budget.

I think their billboards are literally going to read:

"NDP: Not Trying to win on a Technicality. Super Swearsies. Mistakes were Made! But not by Us. We promise."

[CaptainCrunch]

I've been looking it up because I have to wonder about the leadership of the NDP party, I can't see any comments from Notley on this or anything else since the 22nd of July. When she commented on the Pipeline spill.

There's absolutely nothing in her Twitter account that I can see about it.

Frankly her government has made a $2 billion dollar boondoogle and she's nowhere to be seen. Instead she has her deputy and a few flunkies talking about it and getting caught up on mistruths and deceptions.

I wonder if her next logical step is to come in with a cape on and clean out her party

Sorry Hoff for the good of the party your gone, sorry Minstters of the Environment and Industry, but you have to fall on this here sword made of recycled carbon.

[Fighting Banana Slug]

Originally Posted by CaptainCrunch

I'm just curious about this whole thing in terms of how its going to be argued.

I'm pretty sure that the Utilities will basically state that they wouldn't have

1) Bought the PPA's without that provision
2) Paid near as much for the PPA's without the provision for less profitable.

They could also argue that the provision has been in there for more then a decade and has never been argued or taken out.

The NDP government which knew about the provision for less profitable didn't raise a stink until well into their government when it was clear that the Utilities were using it.

I'm not a lawyer, but I'm pretty sure that a new government can't come in and just change the rules of the game because they don't like it.

The bold does seem problematic for the government. Even if you accept, for the moment, that the PPA's aren't contracts, can the government change legislation unilaterally? Typically, I think the answer is yes, but a better question is can the government change legislation unilaterally, without consequence? The remedies provided are baked right into the contract/legislation. Contractually they would have zero chance, but even legislatively it would seem so procedurally unfair to allow this to happen. Moreso, it would seem insane from a long term view to tell the world that the government can change anything, anytime and expect business to react in any matter other than to run as far away from here as is possible.

The only other argument that I can think of (outside of outright fraud, which I don't think is on the table) is that the government agency overstepped its authority in agreeing to the "more unprofitable" language. I have a hard time believing that the enabling language for the board is so precise to provide that "to make it unprofitable" is A OK, but "more unprofitable" is illegal. It isn't as if they agreed to have payment back in hookers and blow. It seems pretty clear that this language, while beneficial to the utilities, is along the same continuum of language the would be negotiated amongst the parties.

[Makarov]

Originally Posted by Locke

Actually, as complex as you believe it is, once the wheat is separated from the chaff it appears to boil down to more or less exactly that simple.

When everyone in the room is pointing and laughing at you, you become left with only two options:

1. You are the smartest person in the room who knows something everyone, literally everyone, does not.

2. You screwed up.

The NDP are not the smartest people in the room.

Originally Posted by Fighting Banana Slug

The bold does seem problematic for the government. Even if you accept, for the moment, that the PPA's aren't contracts, can the government change legislation unilaterally? Typically, I think the answer is yes, but a better question is can the government change legislation unilaterally, without consequence? The remedies provided are baked right into the contract/legislation. Contractually they would have zero chance, but even legislatively it would seem so procedurally unfair to allow this to happen. Moreso, it would seem insane from a long term view to tell the world that the government can change anything, anytime and expect business to react in any matter other than to run as far away from here as is possible.

The only other argument that I can think of (outside of outright fraud, which I don't think is on the table) is that the government agency overstepped its authority in agreeing to the "more unprofitable" language. I have a hard time believing that the enabling language for the board is so precise to provide that "to make it unprofitable" is A OK, but "more unprofitable" is illegal. It isn't as if they agreed to have payment back in hookers and blow. It seems pretty clear that this language, while beneficial to the utilities, is along the same continuum of language the would be negotiated amongst the parties.

The jurisdictional challenge is based on the procedural requirements set out in the enabling legislation (that the province argues should have been complied with but was not.) The province argues that the change from "unprofitable" to "unprofitable or more unprofitable) was a significant change that required (again, pursuant to the enabling legislation) a public consultation process permitting other stakeholders (including, notably, the government of the day) to provide input.

[Locke]

Originally Posted by Makarov

The jurisdictional challenge is based on the procedural requirements set out in the enabling legislation (that the province argues should have been complied with but was not.) The province argues that the change from "unprofitable" to "unprofitable or more unprofitable) was a significant change that required (again, pursuant to the enabling legislation) a public consultation process permitting other stakeholders (including, notably, the government of the day) to provide input.

But didnt someone who was actually there and responsible for this indicate that this process did indeed happen? I thought I read that a while ago.

But assuming for the moment that the Government did not get their fair say in regards to the 'last second scummy Enron clause,' they still signed the contract, can this clause be considered voided because one party was irresponsible regarding their due diligence?

[Zarley]

Originally Posted by para transit fellow

I am confused by whatbyou mean by this.

We had cheapest rates for electricity and then we deregulated.

I'd encourage you to read this study that provides a good overview of the industry and an objective comparison of rates by province:

http://www.ippsa.com/IP_pdfs/IPPSA%2...uly%202011.pdf

The facts show that Alberta residential consumers have paid rates in line with the Canadian average, while industrial consumers have enjoyed below average rates. The article you posted included criticism by industry that turned out to be completely unfounded. In fact, Lethbridge Ironworks remains in operation today despite the CEO's dire predictions in the article you posted.

Originally Posted by para transit fellow

For about 15 years we had very high electricity rates

Now we have cheap electricity rates... with ridiculus transmission costs to cover infrastructure built to ship electricity south to the usa.

This statement illustrates that you truly don't know what you are talking about the amount of power Alberta exports is almost zero - less than 1% of national electricity exports. Obviously this is due to our lack of low cost hydro generation. Transmission infrastructure expenses have been necessary to support population growth in the province, not export. Our lack of export capacity also means that export revenues are not used to subsidize rates inside the province, as is done in BC and MB.

Originally Posted by para transit fellow

How has this "competitive" rate been beneficial?

In addition to providing consumers with rates that are in line with peer provinces and states, deregulation has allowed for billions of dollars in private investment inflows into the province while ensuring that public sector inefficiencies do not creep into the power market.

[Locke]

Originally Posted by Zarley

In addition to providing consumers with rates that are in line with peer provinces and states, deregulation has allowed for billions of dollars in private investment inflows into the province while ensuring that public sector inefficiencies do not creep into the power market.

How dare those Capitalist Bastards invest in this province! Off with their heads!

[Makarov]

Originally Posted by Locke

But didnt someone who was actually there and responsible for this indicate that this process did indeed happen? I thought I read that a while ago.

But assuming for the moment that the Government did not get their fair say in regards to the 'last second scummy Enron clause,' they still signed the contract, can this clause be considered voided because one party was irresponsible regarding their due diligence?

There were no contracts signed. PPAs were put up for auction by the Commission the day after they sent a letter to Enron agreeing with Enron's interpretation. It is the province's position that, when the auction began, it had no knowledge of the change (indeed, the pleadings seem to suggest that none of the buyers, save Enron, were aware of the change either.

[Locke]

Originally Posted by Makarov

There were no contracts signed. PPAs were put up for auction by the Commission the day after they sent a letter to Enron agreeing with Enron's interpretation. It is the province's position that, when the auction began, it had no knowledge of the change (indeed, the pleadings seem to suggest that none of the buyers, save Enron, were aware of the change either.

Okay, I've got to do some more research because I read somewhere that these clauses were considered boilerplate when entering into business with Governments.

[puffnstuff]

Didnt the gentleman that was in the room say it wasnt Enron? I know the NDP like to use their name though. Arent there other agreements in place across NA that have the same language?
Whatever way the suit goes, its going to and has already hurt Alberta from an investment and business standpoint. An ideology based decision with no thought to the reality of the situation.

[Makarov]

Originally Posted by Locke

Okay, I've got to do some more research because I read somewhere that these clauses were considered boilerplate when entering into business with Governments.

I don't deal with a lot of contracts but I haven't come across one before. Lots of private contracts include so-called "change of law" clauses, but those are very different. They typically same something to the effect of: if the law changes to make this contract or any art of this contract illegal or impossible to perform, the parties agree to renegotiate new language which achieves the original intended effect.

[Locke]

Originally Posted by puffnstuff

Didnt the gentleman that was in the room say it wasnt Enron? I know the NDP like to use their name though. Arent there other agreements in place across NA that have the same language?
Whatever way the suit goes, its going to and has already hurt Alberta from an investment and business standpoint. An ideology based decision with no thought to the reality of the situation.

1. I thought something similar but that it was a standard arrangement when dealing with Governments regardless of whether it was Enron or not.

2. They dont care. Business is bad, investment is only perpetrated by heathens, Government is good. Love Government. Obey Government.

[puffnstuff]

I was...oh no all hail hypndptoad...

[Locke]

Originally Posted by Makarov

I don't deal with a lot of contracts but I haven't come across one before. Lots of private contracts include so-called "change of law" clauses, but those are very different. They typically same something to the effect of: if the law changes to make this contract or any art of this contract illegal or impossible to perform, the parties agree to renegotiate new language which achieves the original intended effect.

Okay, fair enough, but just from a purely observational standpoint the clause makes sense, you're playing against the referee so there needs to be checks and balances to ensure the game isnt and cant be rigged.

The NDP just rigged the game, I'd stop playing too.

[Fighting Banana Slug]

Originally Posted by Makarov

The jurisdictional challenge is based on the procedural requirements set out in the enabling legislation (that the province argues should have been complied with but was not.) The province argues that the change from "unprofitable" to "unprofitable or more unprofitable) was a significant change that required (again, pursuant to the enabling legislation) a public consultation process permitting other stakeholders (including, notably, the government of the day) to provide input.

I understand the position, but what I question is the strength of the argument as it pertains to the enabling legislation. Is it really so specific that this change is clearly "significant" and would require public consultation? I would think their mandate would be defined much more broadly than what the NDP are stating.

[CaptainCrunch]

Originally Posted by Fighting Banana Slug

The bold does seem problematic for the government. Even if you accept, for the moment, that the PPA's aren't contracts, can the government change legislation unilaterally? Typically, I think the answer is yes, but a better question is can the government change legislation unilaterally, without consequence? The remedies provided are baked right into the contract/legislation. Contractually they would have zero chance, but even legislatively it would seem so procedurally unfair to allow this to happen. Moreso, it would seem insane from a long term view to tell the world that the government can change anything, anytime and expect business to react in any matter other than to run as far away from here as is possible.

The only other argument that I can think of (outside of outright fraud, which I don't think is on the table) is that the government agency overstepped its authority in agreeing to the "more unprofitable" language. I have a hard time believing that the enabling language for the board is so precise to provide that "to make it unprofitable" is A OK, but "more unprofitable" is illegal. It isn't as if they agreed to have payment back in hookers and blow. It seems pretty clear that this language, while beneficial to the utilities, is along the same continuum of language the would be negotiated amongst the parties.

The example in the Financial Post seems to bear out out a pretty good example.

The extent of those losses is of some dispute, but the NDP seems intent on maximizing the damage. It has deployed expensive lawyers to fight what many experts consider a weak case — after all, the Alberta government wrote the PPA contracts itself; it can hardly claim not to have known what was in them. The parties who signed the contracts were aware of the clause, even if, as the NDP complains, the average Albertan wasn’t (would average Albertans be familiar with any of the clauses?). Just because the government has a different leader and a different majority party doesn’t mean that, as a legal entity, it’s suddenly not bound by previous commitments. Otherwise, the Ontario PCs could legitimately promise to instantly slash Ontarians’ power bills if elected by instantly voiding so many feed-in-tariff contracts.

So based on the fact that even if we don't call this a contract, its a sale based on a set definition of what the sale of this item involves and helps to establish the agreed upon costs and conditions of the sale.

The not profitable clause actually added value to the PPA's according to what I'm hearing in that without it, they would have sold for far less.

I also can't get my head around the whole not aware storyline that the government is playing, since first of all, its pretty clear that they knew and plowed ahead with the Carbon levy anyways which would reduce someone like Enmax's profitability to nearly zero (15 million cost to 150 million cost).

As its been pointed out these PPA's and the terms of them were readily available to the government.

IF the government had been so unhappy with this not profitable condition and what it involved, they should have been filing this court challenge before they made the changes to the Levy, or they should have gone to these utility companies to understand what their trigger point was for returning them, I tend to think instead that they would sneak through the Carbon Levy on coal plants and hope that the companies wouldn't understand the implications of the Levy to their bottom line. Instead they got caught with their hands in the cookie jar.