CALGARY -- A new paper says Alberta ratepayers will be on the hook for about $600 million in losses if the provincial government takes on a group of unprofitable electricity contracts, not upwards of $2 billion as the NDP has said.
The study out today by economists Andrew Leach and Trevor Tombe concludes that consumers would face an additional $2.25 on their monthly power bills for the four remaining years of a group of coal power contracts that companies are trying to void.
Power distributors including Enmax, TransCanada, Capital Power and AltaGas are trying to return those contracts to a government-run balancing pool because they say the NDP's carbon regulations made them more unprofitable.
The government is going to court to challenge a clause that gives companies the right to void power contracts if regulations make them "more unprofitable," rather than simply unprofitable.
The Leach and Tombe paper says that the government's new carbon regulations account for about half of the companies' losses on the contracts, while significantly lower power prices make up the other half.
Leach says the total value of the power contracts is in the range of $2 billion, but he expects power prices to climb and the contracts to return to profitability in the coming years.
