Regulation by Any Other Name: Electricity Deregulation in Alberta and the Power Purchase Arrangements

Abstract

The Power Purchase Arrangements (PPAs) were one of the significant mechanisms of Alberta’s deregulation of the electricity generation sector. This paper argues that the PPAs represent an attempt to mirror by contractual means some of the purpose and effects of the pre-restructuring regulatory scheme. After introducing the background of electric industry regulation in Alberta, this paper discusses the motivations for deregulation. It then reviews electricity deregulation in an international context, looking at the United States and the European Union, to provide a global context for the discussion of Alberta’s deregulation experience. Then, after a description of the progression of Alberta’s deregulation, the paper explains the method by which Alberta effected the PPAs and offers a perspective on how they are intended to be ‘regulation by any other name’, in particular looking at the force majeure and change in law clauses and understanding the effects of the dispute resolution provision. Finally, the success of this attempt to echo the regulatory scheme is analysed, and its impact on industry players and the public is reviewed.

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Terra Nicolay

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Terra Nicolay is Senior Counsel with the Major Capital Projects Legal Practice Group of Chevron Global Upstream and Gas in Houston, Texas. She can be reached at terra. [email protected]. She has served as Corporate Counsel for several companies in the energy and construction industries. The author is currently a candidate for a Master of Laws in Natural Resources, Energy & Environment from the University of Calgary. The author would like to thank Professor Nigel Bankes and two anonymous reviewers for their valuable comments and observations. The author would also like to acknowledge Elsa Kaus for her very helpful research and editing assistance. Responsibility for any errors remains with the author alone. Views expressed are the author’s and do not necessarily reflect those of the individuals mentioned above, or of Chevron.