07/25/2016 05:06 EDT | Updated 07/25/2016 05:59 EDT

Alberta NDP To Take Legal Action Over Costly Coal Power Regulation

Robert McGouey via Getty Images
A horizontal landscape image of the Teck coal processing plant in the foothills of the rocky mountains near Cadomine Alberta, with a C.N. freight train leaving the plant loaded with coal

EDMONTON — The Alberta NDP government is going to court to challenge a regulation that it says could saddle consumers with billions of dollars in losses from coal-fired power agreements.

The regulation passed by the previous Conservative government allows power companies to hand back agreements to buy electricity from coal-fired plants when they stand to lose money.

The government estimates the power purchasing agreements could cost consumers up to $2 billion by 2020.

Enmax says agreement is unprofitable

Some companies such as Enmax Corp. are using the regulation to terminate agreements that were reached when Alberta deregulated its electricity market.

Enmax says the government's decision to charge companies a higher tax on carbon dioxide emissions this year and in 2017 made the agreement unprofitable.

The government says the Tories had no legal right to create a legal loophole and is seeking a court order declaring the regulation void.

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