Alberta Emission Policies Shake Up Power Industry

On March 7, 2016, TransCanada Corporation announced its plan to exit three Power Purchase Arrangements (PPAs) as a result of changing emissions laws in Alberta, which TransCanada claims have rendered the PPAs unprofitable. The decision will leave the Balancing Pool – a statutory entity created during deregulation in 1999 – in charge of the PPAs associated with the Sundance A, Sundance B and Sheerness coal plants. The announcement follows ENMAX Energy Corporation's decision earlier this year to exit the Battle River PPA, also claiming that the plant had become unprofitable as a result of changing emissions laws. The Effective Terms of the Sundance B, Sheerness and Battle River PPAs are set to expire at the end of 2020 and the Sundance A PPA expires at the end of 2017. The collective generation capacity of these plants is 2,407 MW (about 15% of Alberta's total installed generation capacity).