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PUBLIC UTILITIES - Electricity

Thursday, January 17, 2019 @ 6:24 AM  


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Application by TransAlta Generation Partnership (TransAlta) to strike the Balancing Pool’s application. TransAlta owned and operated the Keephills Power Plant and was the owner under the Keephills Power Purchase Arrangement (PPA). Under the PPA, Enmax Energy Corporation (Enmax) was the buyer of the electricity generated by the plant. A dispute arose between TransAlta and the Balancing Pool over the validity of a force majeure claim by TransAlta, pursuant to the PPA. The Balancing Pool paid TransAlta to compensate it for the capacity payments that Enmax was relieved of paying as a consequence of the claimed force majeure. The Balancing Pool formally disputed TransAlta’s force majeure and attempted to follow the dispute resolution procedure mandated by the PPA. TransAlta refused to participate, saying that the Balancing Pool could not initiate arbitration. The Balancing Pool nominated and appointed an arbitrator but TransAlta refused to appoint an arbitrator. The Balancing Pool filed an originating application seeking to have the Court appoint a second arbitrator. TransAlta then filed its application to strike. After the parties filed their respective applications, Alberta’s Minister of Energy amended the Balancing Pool Regulation. The effect of the amendment was that it was now clear that the Balancing Pool could initiate arbitration when it wanted to dispute a force majeure claim. The parties disagreed on the legal effect of the amendment to their dispute. TransAlta took the position that the Balancing Pool’s originating application disclosed no reasonable claim because the Balancing Pool did not have standing to bring the application. TransAlta was seeking a declaration that the Balancing Pool had no right to initiate the dispute resolution procedure under the PPA in regard to any force majeure which occurred prior to the date that the amending regulation came into force. The Balancing Pool submitted that the amending regulation was dispositive of this application as it clarified that the Balancing Pool always could initiate arbitration to dispute a force majeure claim.

HELD: Application dismissed. It was not clear that the amending regulation was declaratory of the law as it always was, and the amending regulation was not dispositive on its own. The matter had to be analyzed afresh in accordance with the modern principle of statutory interpretation. The ordinary meaning of the Balancing Pool Regulation and the PPA read together harmoniously suggested that the Balancing Pool had the right to access the dispute resolution procedure in the PPA as if it were a party, and that included the right to initiate arbitration where the parties were unable to agree. The statutory bodies involved in the creation of the PPAs intended that the Balancing Pool would be able to dispute an invalid force majeure claim so that owners could not game the PPA system and reap a windfall at the expense of electricity consumers. A right of initiating arbitration by the Balancing Pool was also consistent with the broader statutory scheme. The Balancing Pool had a right to initiate the dispute resolution procedure under the PPA in regard to a force majeure that occurred prior to the date that the amending regulation came into force if neither the owner nor the buyer had done so. The Balancing Pool had standing to bring its application.

TransAlta Generation Partnership v. Balancing Pool, [2018] A.J. No. 1346, Alberta Court of Queen's Bench, P.R. Jeffrey J., November 15, 2018. Digest No. TLD-January142019009