LEXPERT MAGAZINE
|
MARCH/APRIL 2018 29
| RECENT LITIGATION OF IMPORTANCE |
ENMAX PPA MANAGEMENT INC.
V. BALANCING POOL
DECISION DATES: OCTOBER 11, 2017;
NOVEMBER 28, 2017
Power Purchase Arrangements (PPAs) were
the instruments under which the Province of
Alberta deregulated the electricity market in
2000. Under that regime, successful bidders
who acquired PPAs, known as Buyers, were
entitled to the electricity generated from a
power plant. e power plant continued to
be owned by the historic power plant owner.
e deregulated electricity market has pro-
ceeded with PPAs for approximately 17 years.
In 2015, the Government of Alberta an-
nounced that it was imposing, as part of
its Climate Change Plan, additional taxes
relating to carbon emissions generated by
large industrial facilities including electri-
city generation plants. Under the terms of
the PPAs, those increased taxes and charges
flow through to the Buyers effective January
1, 2016. e taxes and charges were material
and essentially doubled from that date, with
further increases effective January 1, 2017.
All the PPAs contain a provision by which
Buyers could terminate their respective PPAs
in the event that such a "Change in Law"
rendered the PPAs unprofitable or more un-
profitable over the balance of the PPAs.
All the Alberta PPA Buyers terminated
their PPAs as a result of the substantially in-
creased taxes. In June 2016, the current Gov-
ernment of Alberta commenced an action
against all of the former PPA Buyers alleging
that a portion of the section under which the
PPA terminations were allowed to occur was
void and ultra vires.
A number of proceedings related to those
PPA terminations have been heard by the
Court of Queen's Bench of Alberta.
One application arose when the Balancing
Pool argued that the effective date of the ter-
mination of the Battle River PPA was about
six months later than ENMAX elected to
terminate on January 1, 2016. In a decision
rendered by Justice P. R. Jeffrey of the Court
of Queen's Bench, the judge agreed with
ENMAX's position and held that the effect-
ive date of any PPA termination was when
each Buyer so elected, and not a later date as
claimed by the Balancing Pool. at decision
was not appealed.
Another application related to the Keep-
hills PPA, in which ENMAX was the former
Buyer. e Balancing Pool refused to accept
or reject ENMAX's termination on May 5,
2016, while ENMAX claimed the Balancing
Pool was statutorily obligated to assess the
termination. e Balancing Pool refused,
due to the Government of Alberta action.
ENMAX successfully applied for injunctive
relief, and the decision sets an important pre-
cedent for obtaining a mandatory injunction.
Dalton W. McGrath, Q.C., FCIArb, Mi-
chael O'Brien and Geoff Adair of Blake,
Cassels & Graydon LLP were counsel for
ENMAX PPA Management Inc. and EN-
MAX Energy Corporation.
Roger Smith, Lara Mason and Bernette
Ho of Norton Rose Fulbright Canada
LLP acted for Balancing Pool.
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