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ENMAX rival claims city connection creates an unfair advantage in expansion plan

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ENMAX rival claims city connection creates an unfair advantage in expansion plan

ENMAX Corp.,the city-owned electricity company of Calgary, Alberta, is seeking to boost thecapacity of a local natural gas-fired generator by about 197 MW, a move thatdoes not sit well with cross-town rival Maxim Power Corp., which claims the utility's governmentconnections give it an unfair edge in the province's deregulated powergeneration market.

The additional capacity at the Calgary Energy Centre, or CEC, would come in theform of three 66-MW natural gas fired generators, according to a March 17filing with the Alberta Utilities Commission. The 300-MW combined-cycle CEC islocated in Rocky View County, just past Calgary International Airport. It beganoperating in 2003. The new generators would go into service by 2019.

ENMAX's status as a city-owned entity has raised concernswith Maxim, which claims ENMAX has access to preferential taxation andborrowing treatment. In Alberta's deregulated generation market, power is soldinto the provincial grid through a bidding process and not directly toconsumers, which means all suppliers have a chance to access ENMAX's Calgarycustomers. Maxim, which owns a coal-fired plant in central Alberta, has askedto present its objection to the CEC expansion at a public hearing.

"Maxim believes a hearing of this application isnecessary and appropriate and wishes to fully participate in that hearing,"the company, which is also based in Calgary, said in a separate filing April 1."Maxim intends to raise level playing field issues, including generalconsideration of principles of fairness, efficiency and open competition.Specifically, Maxim intends to raise issues regarding the tax advantages and preferentialaccess to debt which EEC [ENMAX Energy Corp.] enjoys as a result of itsassociation with the City of Calgary, which in turn enables EEC to fund growthof its facilities, and the way in which such advantages undermine theprinciples of fairness, efficiency and open competition."

Maxim in November 2015 received from the commission for an86-MW natural gas-fired addition known as M3, or HR Milner Cogeneration, at its facility incentral Alberta. That expansion would boost combined capacity at the facilityto 236 MW. Another project, called HR Milner CC - M2, would add a 520-MW combined-cyclenatural gas-fired station at the site. The company temporarily all generation atMilner as a result of record low Alberta power prices.