The future of a major industry in Hanna became a little more uncertain this week when TransCanada Corporation announced its intention to terminate its Alberta Power Purchase Agreement (PPA).
According to a press release from TransCanada, this is related to the increase in costs related to carbon dioxide emissions. It plans to cancel its PPAs with Sheerness and two plants near Wabamun.
“The agreements contain a provision that permits the PPA buyers to terminate the PPAs if there is a change in the law that makes the agreements unprofitable,” said Bill Taylor, TransCanada’s executive vice-president and president, Energy. “We have made the decision to exercise this right.”
Mayor of Hanna Chris Warwick is very concerned with the change and spent most of Monday trying to grasp an understanding of the potential consequences of these changes.
“Sheerness continues to generate without any problems at all… for how long - that is the question, because there is no longer a contract,” he said.
“The bottom line is the $20 carbon tax they have put on all the generation stations, whether they are coal or natural gas, has really hurt the coal. It can’t be as competitive with the natural gas because they have more emissions, so it is a higher cost to them."
He said he contacted ATCO Power, which indicated it would keep generating for as long as they can be competitive.
“The underlying issue is the carbon emission tax has caused this,” said Warwick.
“If the government is going to impose that tax, this is going to force way earlier closure of these power plants causing more unemployment in the province, which is struggling very much. They need to reconsider the timelines, I’m not saying don’t do it, but maybe retract that $20 for now and retool it. There are a couple hundred jobs out here, we can’t have those people out of work.”
Opposition leader Brian Jean says the government has failed to protect job loss.
“This is the first domino to fall for workers in the electricity industry and the government has failed to show how they will look after the workers and families who will be impacted by these decisions,” he said in a release.
The announcement from TransCanada is not an end to the company’s involvement in generation.
“The company does not view this action on the PPAs as a full retreat from the Alberta power market,” added Taylor. “TransCanada has a robust gas-fired cogeneration business totaling 438 megawatts at four sites. These low cost and low CO2 emitting gas units are expected to perform well even in today’s market environment.”
