Wildrose MLA Don MacIntyre, like a boss on Bill 34
Alberta Announces Changes to Balancing Pool
13 Dec Bill 34: Electric Utilities Amendment Act, 2016
Mr. Clark: Thank you very much, Mr. Speaker. I am just so frustrated and disappointed by this bill. It may go down in history as one of if not the very shortest bills in the history of our fine province, but the impact of it is far reaching – far reaching – and lacking any positive changes that I can see that will actually improve our electricity system. The minister had a choice. The minister could have chosen not to sue electricity companies. The minister could have worked with the Balancing Pool and worked with PPA owners to recoup, to accept back the PPAs, to allow the Balancing Pool to run those PPAs at market rates and avoid this whole mess.
But there is a much bigger agenda at play here, Mr. Speaker, a much bigger agenda. Despite all of our efforts in this House, I would suggest that there are still very few members in this Assembly who fully understand the magnitude of the changes that have been made and the implications of all of the changes that have been made in rapid-fire succession to Alberta’s electricity system.
But what we do understand, what we understand clear as day, is that this bill gives the government a literal blank cheque to backstop any and all losses from the electricity system. The government in Alberta has got a pretty bad track record, Mr. Speaker, when it comes to backstopping losses from industry: Gainers, which is still on the books and comes up every year in the budget; NovAtel, $600 million; MagCan; and there was an airline if I’m not mistaken. There are many, many, many examples where the government, in backstopping private business, has run into big trouble for Alberta citizens and taxpayers.
There is already a mechanism to address any losses within the Balancing Pool. In many ways this solves a problem that Alberta doesn’t have. It’s not that the Balancing Pool would simply go bankrupt. They would simply put on a consumer allocation. But that would be politically unpopular, Mr. Speaker. Albertans would be able to look at that and say: why is this $2, $3, $4 charge showing up on my electricity bill? Well, that would be because of NDP bungling of the electricity file. Well, gosh, we can’t have that. Instead, what they’re going to do is that they’re going to backstop losses within the Balancing Pool with Alberta taxpayer dollars at a time when Alberta already pays $1 billion a year in debt-servicing costs in interest alone, for which we receive no value: not a single teacher, not a single nurse, not a single seniors’ residence. That is shameful.
And this is only going to make it worse. How deep is this hole going to get? We have no idea. The government could have chosen to cap this. The government could have provided estimates and said: “You know, we need $10 million. We need $50 million. We need $100 million. We need $200 million. We need a number to backstop here, so you know what? We’re going to come forward. We’re going to put this legislation forward, and we’re going to backstop it to that number.” I wouldn’t have liked that either, Mr. Speaker, but what I like a lot less is not knowing how deep this hole could get. This is a literal blank cheque. It’s absolutely un-acceptable.
You know, the government thinks that this is just sort of magic, that magical money unicorns come and rain cash from the sky and that those magical money unicorns are in the form of big corporations. Big corporations, if you were to ask the NDP, are the ones who have all the money, and all we need to do as a government is to just go get the money from the big corporations. Well, guess what? Where do you think the big corporations get the money from? They get it from Albertans, especially when we’re talking about electricity providers. Ultimately, Albertans pay one way or the other, and it is the policy choices of this government that mean Albertans have to pay more, Mr. Speaker. At the end of the day, it is Albertans who will pay.
All of this could have been avoided had the government accepted back the power purchase arrangements. Instead, they chose to go on offence. They chose the political path. They sat there in their ivory tower, three or four folks who are the most powerful in this province, very few, if any, of whom are actually elected, and decided: “Aha. I know what we’ll do. We’ll sue the big electricity companies, and Albertans will thank us. We the NDP are going to take on the big, bad corporations, and we’ll be thanked for it.” Well, guess what? Albertans were wise to your game. Albertans are smarter than that. They know how this all works. They like free enterprise. They like the free market.
To think that the government tried to bully companies into settling: well, it managed to succeed with three of them, but interestingly the one that’s owned by the city of Calgary has yet to settle. I wonder why that is. That’s because they’ve drawn a line in the sand and said: “No. This lawsuit is unfair. It’s vexatious, predatory. You’re using your power as the government to threaten the corporations that own the PPAs that maybe you might bring in retroactive legislation.” That is the ultimate threat, retroactive legislation. That’s the hammer that was held over the heads of all of these companies. That is absolutely the hammer. [interjection] The Minister of Justice is saying that I don’t know that.
Maybe one day my FOIP will come in, Mr. Speaker, and we can prove all of this, that there absolutely were representations made that the government may consider retroactive legislation so that, folks, you’d better settle. It’s pretty tough when you’re negotiating with the people who make the rules, and then they change the rules on you. The government has all the power. That’s what this comes down to.
You know, what it comes down to even more essentially than that, Mr. Speaker, is a lack of oversight by this government, a lack of awareness of the contracts their government had signed, that the government was responsible for. I don’t believe for one second that it was March 2016 that “or more unprofitable” or the “change-in-law” clause was known to the minister or the Premier, and if it was, that is remarkable. We know it wasn’t. We know it wasn’t.
If it wasn’t told to the minister or the Premier, there’s a bigger problem in this government because we know senior bureaucrats knew about that provision. Court documents show definitively that there are senior members of Alberta’s public service working today, one of whom is in the same role that he had 15 or 16 years ago, when these contracts were signed. It is beyond imagination that this government didn’t know. But if you didn’t know, you should have known. You absolutely should have known. There is absolutely no excuse for it. It’s poor management, poor governance.
Ultimately, at the end of the day, Mr. Speaker, I absolutely cannot support Bill 34. It proves the government is following a clearly ideological agenda. They have a preconceived idea of how this is all going to work, and it doesn’t matter if it ends up costing Albertans tens of millions or even more in interest and debt repayment. They have their plan. They’re going to execute it no matter what we say on this side, and that is deeply frustrating.
Thank you, Mr. Speaker.
Following the release of the second quarter financial update, the NDP have introduced Bill 34, Electric Utilities Amendment Act which will continue their alarming trend of excessive borrowing with no repayment plan.
“Allowing government to borrow unlimited funds from general revenue to keep the Balancing Pool afloat is a gross misuse of hard-earned taxpayer dollars,” said Rick Fraser, Progressive Conservative critic for Energy and MLA for Calgary-Southeast. “We must be perfectly clear, we are facing electricity price volatility and a depleted Balancing Pool because of aggressive and ideological NDP policies.”
NDP policies such as the accelerated phase-out of coal and increases to the Specified Gas Emitters Regulation have decimated investor confidence, brought about price volatility and will now require tax dollars to save the Balancing Pool from bankruptcy by the end of the fiscal year.
“For over a decade, the Balancing Pool has had a positive balance at the end of each year. Now that taxpayers have to cover the impending shortage, our record deficit will only continue to balloon,” said Fraser. “The Progressive Conservatives will adamantly oppose piling even more onto our growing deficit simply because the NDP failed to understand the full impacts of their ideological policies.”
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5014 Federal Building
9820 -107 Street NW
Edmonton, Alberta T5K 1E7
https://www.alberta.ca/release.cfm... Nov 29, 2016 Media inquiries
More stability for electricity consumers
Proposed legislation would further reduce price volatility in the electricity system and support the province’s made-in-Alberta transition to a stable and reliable system that puts consumers first.
“We inherited a volatile electricity system that did not look out for consumers. The previous government created the Balancing Pool to deal with Power Purchase Arrangements but did not give it the tools it needed to properly manage the cost impact on consumers if companies said they were handing their PPAs back. We are correcting that and giving the Balancing Pool the tools it needs to limit cost impacts on consumers and enable greater predictability and stability.”
Margaret McCuaig-Boyd, Energy Minister
Bill 34, the Electric Utilities Amendment Act, would allow the Balancing Pool to borrow money from the province to manage its funding obligations. This change, in conjunction with Ministerial Orders that allow the Balancing Pool to smooth price volatility over a longer period of time, would support electricity costs remaining low and stable.
Currently, the average electricity consumer receives a Balancing Pool credit of $1.95 on their monthly bill.
Without the changes proposed in Bill 34, the Balancing Pool would have to remove that credit and apply a charge of $8.40 per month (approximately $100 per year) starting Jan. 1, 2017, with similar charges applied until the end of 2020.
With the changes proposed in Bill 34 and with supporting regulations that give the Balancing Pool until 2030 to meet its net zero obligation, the charge would instead be 67 cents per month for the average consumer. That’s the equivalent of a
0.1 cent/KWh increase in electricity prices, and $7.73 less per month than if the government hadn’t acted. The amount will be reviewed annually and adjusted as necessary based on the wholesale price of electricity.
The changes – which allow the Balancing Pool to manage the cost of the power companies’ return of PPAs earlier this year – in conjunction with reaching a settlement with one of the PPA buyers and tentative settlements with two others, would protect consumers and provide price stability as the province transitions its electricity system.
“These changes are consistent with others we are making in the electricity system to protect Albertans from price spikes while ensuring the province has a stable, reliable system for the long term. Gone are the days when the average bill could – and did – swing by $30 in a single month. This government has taken a number of steps to ensure low prices and system stability. It has been a good week for electricity consumers, something that has not been said for a number of years.”
Margaret McCuaig-Boyd, Energy Minister
By extending the operations of the Balancing Pool, providing a loan and setting the initial consumer charge, the province is ensuring that consumers do not see an immediate and disproportionate increase to power bills from the companies returning their power contracts. These changes complement the government’s work with the companies to settle the PPA disputes. The government will continue to work with the Balancing Pool to understand what steps the Balancing Pool could take to further reduce the cost impact on consumers.
Additionally, Robert Bhatia has been appointed to chair the Balancing Pool’s Board of Directors. The appointment is effective November 29, 2016.
Mr. Bhatia brings a wealth of knowledge and experience to the Balancing Pool, particularly in the areas of financial and fiscal management, strategic leadership, policy and legislation, governance, and operations. During his more than 30 years working for the Government of Alberta, Mr. Bhatia worked in government ministries responsible for finance and revenue, most notably in deputy minister roles.
Bill 34: Electric Utilities Amendment Act
Powering Alberta's Future
Press Secretary, Energy
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