Showing posts with label electrical deregulation. Show all posts
Showing posts with label electrical deregulation. Show all posts

Wednesday, October 17, 2007

Conservatives Hollow Out Canada

More so called 'unintended consequences' of Harpers Income Trust flip flop and Ralph Klein's Electrical deregulation. And if you believe this was unintended then I have a bridge in Brooklyn I can sell you.

Hong Kong billionaire Li Ka-shing, Asia's richest man, is targeting further growth in Canada's energy sector as a company he controls has snapped up Calgary-based TransAlta Power LP for $629-million and could buy more of the country's beleaguered income trusts. TransAlta Power, one of Canada's larger power trusts, had put itself up for sale in May, claiming that the federal government's decision to tax income trusts like regular companies meant its business model was no longer the best way to serve unitholders. It is majority owned by Calgary-based private power producer TransAlta Corp.

People familiar with the deal said Mr. Li, who already controls approximately 71 per cent of Calgary-based Husky Energy Inc., is using his cash-rich position to take advantage of current uncertainty in the trust sector, with the TransAlta acquisition allowing CKI to become a meaningful Canadian electricity player without yet having to become an operator.

CKI has some $1.1-billion of cash still to spend. Potential acquisition targets in Canada could include power generation trust subsidies owned by other infrastructure companies, such as Enbridge Inc., which will likely be sold or restructured as traditional common stock companies by 2011.

Mr. Li's increasing interest follows recent acquisitions in Canada's energy sector by another unlikely overseas player, Abu Dhabi National Energy Co., known as Taqa, which has targeted $7.5-billion on acquisitions in Alberta in just six months.


TansAlta Power pushed for deregulation and played the Income Trust game. It also has the right to sell power south of the border in a blended mix with American electrical utilities. One of the only Canadian utilities to have such an arrangement. Thus it's generation of electricity is for sale to the highest bidder.

Jim Dinning
the man who would be Ralph was on the board of TransAlta. While 'private' it was created under the Social Credit government and its board has always been open to the parking of former government cabinet ministers.

Today the Transalta board is a whose who of Canadian and American business interests. It and Enbridge both have influential former U.S. ambassadors to Canada on their boards.

Enbridge is another private energy company that was also a Trust when Flaherty announced his Halloween Surprise last year.

Interprovincial Pipe Line (IPL), which became Enbridge Pipelines in 1998, was incorporated in 1949, shortly after Canada's first major oil discovery at Leduc, Alberta. The original pipeline was constructed to transport oil from Western Canada to refineries in the east.

Although Interprovincial had long been publicly traded, for most of its life the company was primarily owned by a handful of producers who shipped their products on the system. Then in 1983, Hiram Walker Resources took a major position in Interprovincial, through a share swap. That led to a string of events that included the acquisition of Home Oil in 1986, the creation of Interhome Energy, and control by Olympia & York. In 1992, Olympia & York sold its majority interest into the general marketplace, and Interprovincial became a widely held company. That was really the beginning of the Enbridge of today.

But Enbridge now is also owner and operator of Canada's largest natural gas distribution system, and is building a new gas distribution system for the province of New Brunswick. Enbridge participates in gas transmission through the Alliance and Vector gas pipelines. It is involved in the gas midstream business, liquids feeder pipelines, electrical power distribution, retail energy services, energy marketing, fuel cells, and has a growing involvement internationally with investments such as the OCENSA crude oil pipeline in Colombia.
Ah yes Colombia, home of death squads for trade unionists, and now has been given Harpers favorite nation trading status.


Bush: Free Trade Benefits US Workers

Some in Congress have expressed concern over violence in Colombia, particularly attacks on trade unionists. President Uribe takes these concerns seriously, and he has responded decisively. He's established an independent prosecutors unit to investigate and punish homicides against labor unionists. He's allowed the International Labor Organization to station a permanent representative in Bogota. He's worked to offer young Colombians better alternatives to a life of violence and drugs -- including the new jobs and economic opportunities that would come from a trade agreement with the United States.

Colombia's record is not perfect, but the country is clearly headed in the right direction -- and is asking for our help. Both houses of the Colombian legislature have expressed overwhelming support for the trade agreement with the United States. And now they're waiting to see if we will uphold our end of the deal. If Congress were to reject this committed ally, we would damage America's credibility in the region, and make other countries less willing to cooperate in the future. As Prime Minister Stephen Harper of Canada put it, "If the United States turns its back on its friends in Colombia, this will set back our cause far more than any Latin American dictator could hope to achieve." By its bold actions, Colombia has proved itself worthy of America's support -- and I urge Congress to pass this vital agreement as soon as possible

.

Like TransAlta, Enbridge's board has former members of the Alberta Government, including the former CEO of Telus, as well as those with connections to the U.S. Government and with Dubai and other middle eastern investors looking to expand into the energy and utility markets in Canada.

There’s a new way of pegging an energy company a takeover target: TAQA-over.
As everybody knows, or will, once it finishes spending billions in the Canadian oil patch, TAQA is an acronym for Abu Dhabi National Energy Co., which is buying PrimeWest Energy Trust for $5-billion, and still has some $13-billion left to spend.

RBC analyst Fai Lee is calling Enbridge Income Fund a TAQA-over candidate. Without actually connecting the dots between the Abu Dhabi outfit and Enbridge, he calls the fund a potential takeover candidate for a private or strategic investor, given its attractive asset portfolio.

J. LORNE BRAITHWAITE

(Age 65) Malahide, County Dublin, Ireland

Mr. Braithwaite joined the Board in 1989 and is a member of the Corporate Social Responsibility Committee and the Human Resources & Compensation Committee.

Mr. Braithwaite was President and Chief Executive Officer of Cambridge Shopping Centres Limited (developer and manager of retail shopping malls in Canada) from 1978 to 2001. As of January 2006, Mr.Braithwaite joined the largest shopping mall company in the Middle East, as the Chairman of MAF Shopping Centres, LLC, Dubai, United Arab Emirates. He is a Director of Enbridge Gas Distribution Inc. (public utilities company that is an indirect, wholly-owned subsidiary of the Corporation), Jannock Properties Limited (public real estate company), Bata Shoe Corporation (private international shoe retailing company) and Canada Post Pension Plan Investment Advisory Committee. Mr. Braithwaite is also a Trustee of Enbridge Commercial Trust (trust and a subsidiary of Enbridge Income Fund which is managed by a subsidiary of the Corporation).

Mr. Braithwaite owns 33,751 Enbridge Shares and 7,637 Deferred Stock Units.


Like many of Alberta's energy companies there are overlaps between the board members.

Enbridge CEO Patrick Daniel also sits as the director on Encana, Conservative bag man Gwyn Morgans old company, which was another energy company that was about to become a trust when Flaherty made his ill fated announcement, and sits on Enerflex an oil field services and supply company.

Just as there are overlaps between Enbridge Trust board members and Telus.

The hollowing out of Canadian business is not a aberration, it is not accidental, it is the result of Canada's energy businesses situated in Alberta being open for business. The boards are made up of movers and shakers from the U.S. and Canada energy businesses, who are willing to sell off portions of their companies to foreign investors, by using the Income Trusts, which are unregulated.

Like energy deregulation, it was never about creating value for Albertans or Canadians but about creating value for foreign and American investors at our expense.

And since these guys are the movers and shakers in Alberta's energy sector they are also the same guys crying the blues about royalty increases. Not because it would hurt their bottom line but that it might not make their companies so attractive to foreign investment buy outs. But of course that too is a lot of Chicken Little nonsense as this recent buy out of TransAlta shows.

Alberta and Canada are open for business, come buy us out.


With globalization, however, hollowing out has become a political issue for most industrialized nations. The difference this time is that no single nation is the principal acquisitor, nor is any one country the sitting duck. The hunter and the hunted have become interchangeable. Companies in China, Brazil, Saudi Arabia, Sweden and Switzerland are on the prowl. And the prey may be in Germany, Italy, Britain, Australia, the U.S. and, yes, even Canada.

In the first eight months of this year, foreigners gobbled up Canadian companies worth an astounding $90 billion.
Canadian companies such as Inco, Dofasco and Alcan that formed part of the industrial backbone of the Canadian economy are Canadian no more.

This "hollowing out" of corporate Canada worries many Canadians, including top business leaders. For example, Caldwell Securities, a major investment firm, has run full-page newspaper ads on "The Sellout of Corporate Canada." It called the loss of head offices and industrial leadership "one of the great corporate tragedies of our time."

Despite these warnings, Prime Minister Stephen Harper has left no doubt that he considers the sellout to be of little importance.

After months of rising pressure to do something about the supposed threat that foreigners will buy up too many Canadian companies, the federal government this week responded in almost exactly the right way: with a policy of tough-talking inaction.

Canada is not drifting towards protectionism despite a government promise to look into the country's foreign investment rules, according to Jim Flaherty, finance minister.

"We cannot turn our backs on what's happening in global trade nor would we want to," Mr Flaherty told the Financial Times. "You are not going to see a protectionist Canada."

Four out of five of Canada's leading CEOs think Ottawa should impose new restrictions on takeovers by foreign state-owned firms and seven out of 10 favour reviewing acquisitions by outsiders for national security concerns.

These survey results of Canadian Council of Chief Executives (CCCE) members are being released today as part of an effort by the 150-CEO group to address public fears about a "hollowing out" of Corporate Canada's head offices.

"The world is awash in capital despite the current credit squeeze and some of the biggest players wandering around snapping up companies have very deep pockets and happen to be state-owned players," said Thomas d'Aquino, president of the CCCE.




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Tuesday, July 31, 2007

Albertans Left Blown' In The Wind


You Don't Need A Weatherman To Know Which Way the Wind Blows. Not in Alberta home of the free market. No rent controls here says our Premier. No changes in Building Codes till 2010. No need to revise our pork barrel health boards.

But Steady Eddie will keep a cap on wind energy.


Wind power advocates are unhappy with the Alberta government for suggesting that the current cap on wind energy in the province might be raised, rather than eliminated completely.



And not let Albertans develop their own home based energy to reduce their energy bills and produce locally based micro green energy whose excess can be put into the provinces utility grid. So much for his much lauded free market politics.


The Stelmach government foresees nearly doubling the amount of wind-power generation allowed in Alberta, even as the province remains the only jurisdiction in Canada to cap the production of wind energy.

Alberta's Electric System Operator introduced last year a limit of 900 megawatts of wind-energy generation, saying it was uncertain about whether wind conditions and patterns could be properly forecast -- something needed to produce a reliable stream of power.

The decision enraged wind-energy producers, which have thousands of megawatts in the queue. The rules made Alberta the only jurisdiction in Canada to impose such a cap.

"Replacing it with a higher cap is not a preferred option," said Robert Hornung, president of the Canadian Wind Energy Association. "A cap sends a signal that a door is closed, and for investors in the industry, that sends a negative signal."

NDP environment critic David Eggen, who's long been lobbying the government to axe the cap, said more wind power will help slash greenhouse gas emissions spewed by coal-fired electricity plants.

The Tory government's priority for building transmission lines has gone to the carbon-based energy suppliers, he argued, which has further hindered wind-energy generation.

"If these guys (the government) are free marketers, get out of the way and let the renewable energy groups into the market," Eggen said. "There are so many delaying tactics to prevent renewable energy from getting a foothold in this province."



Of course there never was a free market in utilities in Alberta. They are either private monopolies like ATCO Frontenac, or TransAlta, or they are publicly owned like EPCOR and Enmax.

The former being influential supporters of the Tory government and their boards are retirement homes for former PC cabinet ministers.

Deregulation was done for their bottom line not for expansion of alternative utility services such as wind energy or home based green energy production.


Wind energy companies are all private small entrepreneurs.

Cowley Ridge in southwestern Alberta is the site of Canada's first commercial wind farm. The turbines generate enough electricity to power 7,000 homes. When it was launched in 1998, 3,000 households were signed up. Now, it has more than doubled with each home paying an extra $7.50 on average for using wind power.
While big utility monopolies like TransAlta are a dumping ground for ex Tory cabinet ministers their coal and gas powered hydro monopolies must be protected by their pals like Eddie.

The provincial government wants to insure those who control the grid, do not face competition from independent johnny come lately's promoting green energy nor from home based micro energy production.



H/T to Pierre Trudeau Is My Home Boy


SEE:

Power Failure


Heat Not Light



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Thursday, May 31, 2007

Power Failure

Americans are facing an increase in electricity rates thanks to deregulation.

Illinois residents have seen a jump in electricity rates recently. NewsHour correspondent Elizabeth Brackett looks at the debate over deregulation and freezing rates in Illnois.


Which of course Albertans have faced since 2001.

A number of industry watchers, including Alberta Energy Minister Mel Knight, have been forecasting higher electricity costs for Albertans even before the Ed Stelmach government announced a new $15-per-tonne tax on carbon dioxide emissions.

And that's come on top of a $4.5-billion bill Alberta consumers are being asked to pay for desperately needed new transmission infrastructure.

Hydro Quebec rated Edmonton's residential electricity rate the fifth highest out of 11 cities in 10 provinces in 2006.

Here is the irony deregulation was supposed to create competition and thus fund infrastructure expansion. Instead it has cost consumers more, reduced competition creating power oligopolies and no new transmission infrastructure has been created.

Service, well we have increasing brown outs and black outs now thanks to deregulation. Something we now share with California.

EPCOR has begun rolling blackouts, cutting power to certain areas on alternating days to help conserve energy. It's not a terrible idea, but it makes day to day living a pain. There's no official schedule anywhere, so you just kind of have to guess when power in your area is going out.
However city owned EPCOR has increased its profits thanks to deregulation.

But these profits have not benefited consumers or tax payers, they have been shoveled into an income trust created by EPCOR. This is the real meaning of deregulation;

Epcor recently acquired TransCanada Power Limited Partnership, which now operates as Epcor Power L.P. The merger included the integration of 11 new power generation facilities located in Ontario, New York, British Columbia and Colorado. The new publicly-traded subsidiary is the largest publicly-traded company based in Edmonton.

EPCOR Power L.P. (the Partnership) is a limited partnership organized under the laws of the Province of Ontario, which owns and operates a portfolio of power generation assets in Canada and the United States.

The Partnership's mission is to be Canada's premier income fund, providing a growing, stable cash distribution to unitholders. This will be accomplished by being growth-oriented while providing unitholders with reliable long-term cash flows. Superior operating and commercial management practices will be applied to a quality portfolio of energy assets.


Stock Quote: EP.UN

$26.12


See:

What's That Smell?

Blowing in the Wind

Citizen Klein

The Wild West Buyout




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