CALGARY — Alberta is paying a hefty price to soothe investor fears as it ditches coal-fired power in a massive shakeup to its electrical grid.
The province’s NDP government late on Thursday announced a deal to pay three major power producers $1.36-billion over 14 years as compensation for shutting down coal units years ahead of schedule. Funds will be paid using the province’s levy on large carbon emitters.
It also said it settled a dispute with Capital Power Corp. and reached tentative deals with Altagas Ltd. and TransCanada Corp. over cancelled power-purchase agreements, heading off a potentially costly legal spat. A dispute with Calgary’s city-owned utility, Enmax Corp., remains unresolved.
The moves lifted uncertainty that had weighed on shares of generators most exposed to the mandated phaseout of coal. On Friday, shares of TransAlta Corp. jumped 17.09 per cent, while Capital Power gained 9.58 per cent on the Toronto Stock Exchange.
It comes after a week of upheaval in Alberta’s power market that saw the province introduce a cap on regulated electricity rates and lay out plans for a so-called capacity-market structure, which guarantees producers a return on power even if they are unable to sell it.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/alberta-makes-136-billion-deal-with-power-producers-to-shutter-coal-units-early/article33054686/