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Alberta coal power contracts terminated as natural gas prices plunge

The stacks of the Sundance Power Plant, 70 kilometres west of Edmonton.

CALGARY C Companies are wiggling from money-losing contracts to purchase electricity from coal-fired power plants in Alberta as a result of the province’s new climate change policies, leaving a provincial agency to honour the agreements.

TransCanada Corp., a business most widely known for building pipelines but that also includes a power business, cited a recent alternation in Alberta’s climate laws in order to terminate contracts to buy coal-fired electrical power from Atco Ltd. and TransAlta Corp.

The company said Monday it will take a $235 million charge around the termination of these contracts, called Power Purchase Agreements (PPA), which must certainly be honoured with a provincial agency known as the Balancing Pool.

In addition, AltaGas Ltd. director of finance and communications Jess Nieukerk said his clients are also cancelling its PPAs and returning those obligations to the Balancing Pool.

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