A complaint filed with Alberta’s Office of the Ethics Commissioner on Tuesday argues that the president of the Coal Association of Canada contravened the Conflict of Interest Act by lobbying for the coal industry shortly after leaving his post as an Alberta cabinet minister.
Until six months ago, coal lobbyist Robin Campbell served as Alberta’s finance minister. He previously held positions as minister of aboriginal relations and minister of environment and sustainable resource development.
The Conflicts of Interest Act bars a former minister from lobbying any public office holder for 12 months after their last day in office.
Progress Alberta, a non-profit progressive advocacy group, filed the ethics complaint, arguing that Campbell’s activity on behalf of the coal industry may contravene rules in the Lobbyist Act designed to prevent the use of “grassroots communication” to persuade members of the public to pressure public office holders.
Since his controversial appointment as Coal Association president, Campbell has visited communities across Alberta and spoken with media about the lobby group’s positions. At least one media report indicates Campbell called on audiences to get in touch with their elected officials.
The Lobbyist Act defines “grassroots communication” as “appeals to members of the public through the mass media or by direct communication that seek to persuade members of the public to communicate directly with a public office holder in an attempt to place pressure on the public office holder to endorse a particular opinion.”
The Coal Association of Canada website states Campbell “is leveraging his decades of experience to help preserve jobs and ensure the coal industry remains an important part of our economy.”
In its complaint, Progress Alberta argues that Campbell may have used his position to influence Albertans to advocate for investments that would benefit the coal industry and against the province’s plan to phase out coal.
Coal Association Targets Coal Phase-out
The complaint has arrived on the desk of the Ethics Commissioner of Alberta at a rather noteworthy time for the Coal Association, which has recently kicked off its rather comically named Act for the Future campaign.
On its campaign website, the Coal Association states Alberta’s Climate Action Plan, which involves a province-wide phase out of coal-fired power by 2030, “will have significant impacts on every Albertan and jeopardize the economic advantage coal-fired generation provides Alberta industries.”
Last week, the lobby group confidently declared that electricity bills may triple in Alberta by 2021.
Two days later, Campbell penned a column for the Calgary Herald stating that “we do know power prices, part of Alberta’s competitive advantage, are going up.”
Experts critical of the Coal Association’s campaigning say Campbell’s argument that a plan to phase out coal is to blame for the imminent spike in power prices is complete rubbish.
“There’s absolutely no analysis that supports the contention … that the coal phase-out will triple power bills,” Ben Thibault, electricity program director at the Pembina Institute, said.
Duncan Kinney, executive director of Progress Alberta, added that Campbell’s argument “borders on ridiculous.”
Plummeting Prices too Low for “Market to Work”
Although predicting the fate of any energy market is difficult, a dramatic drop in Alberta’s electricity prices in recent years has onlookers saying a price rise is warranted.
Alberta’s average pool price for electricity plummeted in recent years, from an average of $80 per megawatt hour ($/MWh) in 2006 to $33/MWh in 2015.
According to the Alberta Electric System Operator (AESO), the average pool price for March was a stunningly low $14.79/MWh. The wholesale price of electricity hit zero in February.
Thibault, who works on electricity policy design and analysis, says prices must rise in the years to come regardless of the policy instruments in place, as current power pool prices are far too low to support necessary investments in the electricity system.
Prices are currently low because of rock-bottom prices for natural gas and coal, another balmy winter and the ongoing recession.
“One way or another you need new investment in combined cycle [natural gas generation facilities] and wind, the cheapest new generating options, and in order to get there we need the MWh to be $80,” Thibault told DeSmog Canada. “It’s too low right now for this market to work.”
In other words, the power pool price could triple or quadruple in coming years even if the Alberta government sat on its hands.
But such a reality isn’t convenient for Campbell, who has been criticized for flip-flopping on the issue after formally backing former premier Jim Prentice’s call for a coal phase-out.
Neither is the reality that low electricity prices are causing coal-fired power plants to flee the energy market early.
In January utility provider Enmax cancelled its power purchase agreement with the coal-fired Battle River power plant, saying low electricity prices, combined with emissions regulations from last summer, have made the enterprise unprofitable.
In March, TransCanada did the same, citing unprofitability as the main cause.
But Campbell seized upon the opportunity to blame the climate plan.
In a column for the Calgary Herald, Campbell suggested the government’s climate change plan will “prematurely close baseload coal” and “void power purchase agreements.”
In another article in the same paper Campbell said he “believes coal-fired power plants will start shutting down in 2018 as owners try to avoid the higher levies.”
But once again, this reading of the coal industry’s trouble seems to be an instance of intentional obfuscation.
For one, 12 of the 18 coal-fired plants in Alberta would have been shuttered by 2030 anyways (with four planned for closure by 2019).
Even more important is the reality that a backdoor escape valve was bizarrely written into power purchase agreement contracts by the province’s deregulation apparatus nearly 15 years ago. This happened when the agreements were first auctioned off to allow buyers to get rid of their agreements if laws were changed making their business “unprofitable.”
“They’re trying to get out of these things because they’re losing money on them because of the power pool prices, but in order to get out of them they need to blame the climate plan,” Thibault says.
Kinney says such “very generous out-clauses” mean that large companies have “privatized profits and socialized losses.”
As mentioned, power prices are exceedingly low at the moment, rendering many agreements only marginally profitable (if at all).
But thanks to ongoing tweaks to the carbon pricing for large emitters — which requires an annual emissions intensity reduction of 15 per cent in 2016 and 20 per cent in 2017 — companies can claim the government adjustments have resulted in “unprofitability” even though they’re likely attempting to get out of the agreements because of low returns.
Media Coverage of Alberta’s Complex Electricity Market “Sucks”
Campbell’s recent campaign efforts have often been facilitated by media outlets that present only one side of the issue (for example: using Campbell as a single source in multiple articles that feature intensely controversial claims).
“The electricity market in Alberta is complex,” Kinney said. “Because it’s complex, reporting on it — how do I put this delicately? — sucks.”
“It seems anyone can go out and say anything about the electricity system now and it’ll get reprinted simply because no-one really knows what’s going to happen,” he added.
According to iNews880, “Campbell declined comment” on the potential conflict of interest “due to the fact Progress Alberta filed the complaint with the ethics commissioner.”
Reports by the ethics commissioner often take months to be written and published.
Image: Government of Alberta/Flickr