Posted on Aug 5, 2016

Within the Law

 Dear Constituents of Edmonton-Ellerslie and all Albertans,

Everybody in our province, whether they be individuals, groups, companies or government bodies, have to act within the law. The law is there to protect people against the powerful, and that’s why the Government of Alberta is going to court on behalf of all Albertans, individuals and companies, to try and overturn what you may have heard referred to as the Enron Clause.

The Enron Clause is a small regulation that was slipped into the Power Purchase Agreements (PPAs) of big electricity companies by the Alberta Energy and Utilities Board when the government of the time chose to move to a deregulated market. It was lobbied for by Enron, a U.S. power trading company that went bankrupt in one of the biggest corporate fraud scandals in history. The Enron Clause added the words “or more unprofitable” to a provision in the Power Purchase Agreements that allowed power companies to back out of their contracts if a change in government law makes their arrangements unprofitable.

This change to the regulations was enacted by the Alberta Energy and Utilities Board without public consultation. It was enacted after the PPAs were already published and reviewed. A month later, the government of the day passed a regulation that retroactively sought to exempt this change from normal legal process, and expressly allowed the Board to keep it secret from the public.

It is this clause that the power companies are now using to dump their PPAs back on the public. It is our position that this clause was enacted unlawfully, should be struck from the regulations, and should not be used as a basis for power companies to dump unprofitable business arrangements back on the public purse.

Why are we doing this? Because overall the power companies in question have made an estimated $10-billion in profit from PPAs since they were set up in 2000. Now, when the market price of electricity is making these agreements unprofitable, they are trying to dump their losses on the public back. We believe this is fundamentally unfair, and we believe it is not legal.

We would not be doing our job of looking after the interests of all Albertans if we did not ask for legal clarification on this. Everyone in Alberta must live by the rule of law, and that includes government agencies and big power companies. The court will determine who is legally right in this circumstance.

To represent us in the case we have hired Joseph J. Arvay, Q. C., a lawyer with a long and distinguished track record of litigation dealing with legislation and legality. He was involved in the inquiry into RCMP and Government of Canada wrongdoing during the Vancouver APEC summit of 1997, and in several cases dealing with equality rights under the Canadian Charter of Rights and Freedoms. He has the experience necessary to argue a complex legal case such as this.

As this legal challenge goes through the court process more documents and details will come to light. It is complicated, but it is our role and our job to do what’s right whether or not big companies are fighting us in the courts, and whether or not a previous government allowed them to get away with deals that give the profits to them, and the losses to the public. We are stepping up to this challenge because it’s the right thing to do.



Rod Loyola, MLA

Edmonton-Ellerslie Constituency