The Opposition Wildrose Party says the government’s plan to cover losses on cancelled electricity contracts with a loan amounts to a “blank cheque.”

The government doesn’t know exactly how high that loan could climb, but has estimated amounts reaching up to $500 million.

Energy Minister Marg McCuaig-Boyd said the loans will be reviewed yearly and that there are “checks and balances” in place, including oversight from the Treasury Department.

That doesn’t satisfy the Opposition.

Wildrose MLA and energy critic Don MacIntyre said the government should undo its changes to the electricity system or put the charge directly on people’s bills, without a government loan. 

“Don’t hide it in the great big black hole known as provincial debt,” MacIntyre said. “At the very least, the government needs to tell Albertans how much money it plans to borrow for the Balancing Pool and it needs to put restrictions on that borrowing.”

The Balancing Pool, a provincial government agency that manages power agreements, was handed the money-losing contracts after four utility companies cancelled them. The loan is intended to keep the agency’s balance at zero, rather than foisting the losses directly onto consumers.

The government has said that adding the charge directly to monthly electricity bills, as the Wildrose Party suggests, would cost the typical household about $8.40 each month. By stretching it out over 14 years, the cost will be about 67 cents per month, although that could change as rates rise or fall.

A 50-megawatt oilsands facility would have been charged $300,000 without the loan, rather than the expected $24,000.

The total amount of the loan is also contingent on rates and the final amount will be known in 2020 when the power purchase agreements expire and the full extent of the losses are known. At that point, the Balancing Pool will have 10 years to repay the government.

The ongoing saga of the power contracts has been one of the unintended consequences of the impending hike to the province’s carbon levy on large industrial emitters.

Four utilities cancelled power purchase agreements to buy power from heavy emitters, citing an opt-out clause that allows them to walk away when a change in law makes their deals unprofitable or “more unprofitable.”

With low electricity prices, the agency can’t make enough money selling the power to cover its expenses.

The balancing pool was expected to expire in 2020, but the legislation will keep it around for 10 additional years.

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