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AR 167/2003 POWER PURCHASE ARRANGEMENTS REGULATION

(Consolidated up to 254/2007)

ALBERTA REGULATION 167/2003

Electric Utilities Act

POWER PURCHASE ARRANGEMENTS REGULATION

Table of Contents

                1       Interpretation

                2       Effect of section 96(2) and (3) of the Act

                3       Eligibility to hold PPA or derivatives

                4       Rainbow power purchase arrangement

                5       Decommissioning costs

                6       Duty of owner to provide access

                7       Restriction on sale of generating unit

                8       No change in law

                9       Repeal

              10       Expiry

              11       Coming into force


Interpretation

1(1)  In this Regulation,

                                 (a)    “Act” means the Electric Utilities Act;

                              (a.1)    “Balancing Pool Regulation” means the Balancing Pool Regulation (AR 158/2003);

                                 (b)    “derivatives” has the meaning given to it in the Balancing Pool Regulation;

                                 (c)    “person” includes a limited partnership, a joint venture, a trust or a governmental authority.

(2)   For the purposes of this Regulation,

                                 (a)    a person is an associate of another person if

                                           (i)    one is an affiliate of the other,

                                          (ii)    one is a corporation of which the other legally or beneficially owns or controls, directly or indirectly,

                                                 (A)    at least 10% of the voting shares or securities that are convertible into at least 10% of the voting shares, or

                                                  (B)    an exercisable option or right to purchase at least 10% of the voting shares or securities that are convertible into at least 10% of the voting shares,

                                         (iii)    one is a partnership of which the other is a partner, including a general partner of a limited partnership,

                                         (iv)    one is a trust or estate in which the other owns or holds at least a 10% legal or beneficial interest or in respect of which the other serves as a trustee or in a similar capacity, or

                                          (v)    one is a corporation of which the other is an officer or director,

                                     and

                                 (b)    2 or more persons are associates of each other if another person legally or beneficially owns or controls, directly or indirectly, at least a 10% interest in each of them, whether by way of voting shares, securities convertible into voting shares, an exercisable option or right to purchase voting shares or securities convertible into voting shares or otherwise.

(3)  In subsection (2)(a)(i), “affiliate” has the meaning given to it in the power purchase arrangements.

AR 167/2003 s1;216/2005

Effect of s.96(2) and (3) of the Act

2(1)  In respect of a power purchase arrangement held by the Balancing Pool under section 96(2) or (3) of the Act, the Balancing Pool is entitled to the rights and is bound by the obligations of a buyer and the power purchase arrangement has effect in accordance with its terms and conditions, as amended from time to time in accordance with the arrangement, subject to the following:

                                 (a)    sections 4.3(j), 7.3, 14.6, 15.3, 15.4 and 17.4 of the power purchase arrangement are deemed to be deleted;

                                 (b)    sections L3.1, L3.2(a), (c), (e) and (f), L3.4, L3.5 and L4.1 of Schedule L of the power purchase arrangement are deemed to be deleted;

                                 (c)    section 14.4 of the power purchase arrangement is deemed to be replaced with the following:

14.4   During any period in which the Owner’s obligation to perform or comply with an obligation under this arrangement is suspended, the Monthly Capacity Payment is the same amount as the Provisional Capacity Payment, notwithstanding any other provision of this arrangement.

                                 (d)    section 18.1(a) of the power purchase arrangement is deemed not to apply in respect of

                                           (i)    derivatives, or

                                          (ii)    the exercise, grant or assignment of a right, entitlement, interest, term, condition or obligation under section 2(1)(f) of the Balancing Pool Regulation.

(2)  The deletions and substitutions set out in subsection (1) apply only during the period in which the Balancing Pool holds the power purchase arrangement in the capacity of a buyer under section 96(2) or (3) of the Act.

Eligibility to hold PPA or derivatives

3(1)  The following are not entitled to hold a power purchase arrangement or derivatives:

                                 (a)    the Government of Canada;

                                 (b)    the government of a province or territory of Canada;

                                 (c)    a person

                                           (i)    that is owned or controlled by a government referred to in clause (a) or (b), and

                                          (ii)    that carries on the business of generating, selling, transmitting or distributing electricity, or all of them.

(2)  Neither a person nor an associate of a person is entitled to hold a power purchase arrangement if the power purchase arrangement applies to a generating unit that is owned by the person or the associate.

(3)  Neither a person nor an associate of a person is entitled to hold derivatives if the derivatives are associated with a power purchase arrangement that applies to a generating unit that is owned by the person or the associate.

(4)  Neither a person nor an associate of a person who is ineligible under this section to hold a power purchase arrangement or derivatives may become the holder of a power purchase arrangement or derivatives unless the circumstances that made the person or associate ineligible have been removed.

AR 167/2003 s3;216/2005

Rainbow power purchase arrangement

4(1)  The Balancing Pool must pay to the person holding the Rainbow power purchase arrangement a monthly payment calculated by dividing $21 000 000 by the number of months in the effective term set out in the Rainbow power purchase arrangement.

(2)  The amount calculated under subsection (1) must be paid on the 20th business day of each month of the effective term of the power purchase arrangement.

(3)  The Balancing Pool must cease making payments under subsection (1) if the Balancing Pool becomes the holder of the Rainbow power purchase arrangement as a result of

                                 (a)    a default by the holder of the power purchase arrangement, or

                                 (b)    a termination of the power purchase arrangement.

(4)  In this section, “business day” means any day other than Saturday or a holiday as defined in the Interpretation Act.

Decommissioning costs

5(1)  The owner of a generating unit who applies to the Commission within one year after the unit is no longer subject to a power purchase arrangement to decommission the unit

                                 (a)    is entitled to receive from the Balancing Pool the amount by which the costs of decommissioning the unit exceed the amount the owner has collected from customers before January 1, 2001 and through a power purchase arrangement for the purpose of decommissioning the unit, or

                                 (b)    where the amount the owner has collected from customers before January 1, 2001 and through a power purchase arrangement for the purpose of decommissioning the unit exceeds the costs of decommissioning the unit, must pay the excess to the Balancing Pool.

(2)  Before any payment may be paid from the Balancing Pool under subsection (1)(a) or into the Balancing Pool under subsection (1)(b), the owner of the generating unit must receive Commission approval of

                                 (a)    the costs of decommissioning the unit, and

                                 (b)    the amount that the owner of the generating unit has collected from customers before January 1, 2001 and through a power purchase arrangement for the purpose of decommissioning the generating unit.

(3)  The Commission must not approve the costs and amount referred to in subsection (2) if the generating unit is in operation for more than one year from the date that the unit is no longer subject to a power purchase arrangement.

(4)  This section does not apply after  December 31, 2018.

AR 167/2003 s5;254/2007

Duty of owner to provide access

6(1)  Where the Balancing Pool offers a power purchase arrangement or derivatives for sale pursuant to the Balancing Pool Regulation, the owner of a generating unit to which a power purchase arrangement applies must provide reasonable access to the generating unit and any contractual arrangements and documents relating to the generating unit

                                 (a)    to the Balancing Pool, and

                                 (b)    to any other person the Minister or a person designated by the Minister decides should be given access.

(2)  In the event of a disagreement, the Minister or the person designated by the Minister must decide what constitutes reasonable access for the purpose of subsection (1).

(3)  Nothing in this section requires an owner to disclose any agreement or other document or information that is related to the  costs of supplying coal for use as fuel in a generating unit that the owner of the generating unit has consistently treated as confidential.

Restriction on sale of generating unit

7   Where the owner of a generating unit to which a power purchase arrangement applies sells a generating unit, the owner of the unit must sell the power purchase arrangement that applies to that unit with the unit.

No change in law

8   Neither the enactment or implementation of this Regulation nor the enactment or implementation of an amendment to this Regulation is considered to be a “change in law” as defined in the power purchase arrangements.

Repeal

9   The following regulations are repealed:

                                 (a)    the Commercially Sensitive Coal Cost Information Regulation (AR 130/99);

                                 (b)    the Power Purchase Arrangements Regulation (AR 140/2002).

Expiry

10   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on December 31, 2020.

Coming into force

11   This Regulation comes into force on the coming into force of Parts 1 to 10 of the Electric Utilities Act.