PPAs and the Master Narrative in Alberta

The American Press Institute (API) describes pack journalism,” now known as “the master narrative,” as a story line the press corps en masse is telling or repeating.

The API warns that master narratives can become a “trap or rut” and that journalists will pick facts that illustrate the master narrative and ignore other facts.

The leader of the pack

A classic example of “pack journalism” is Postmedia’s coverage of the NDP government’s decision to challenge the right of power companies to back out of their power purchase arrangements (PPAs).

hunter-s-thompson-e1391386920155

Hunter S Thompson – the antithesis of pack journalism

Postmedia’s master narrative is that the NDP government screwed up when it introduced policies to reduce carbon emissions because it triggered the early termination clause in the PPAs.

This narrative was supported by stories characterizing the PPAs as contracts and saying the government was suing itself or the power companies in order to renege on a deal its predecessors entered into fair and square in 2000.  None of this is true.

Some (but not all) of the economic data  

The University of Calgary School of Public Policy published a report on the impact of the NDP government’s changes to the regulations on power companies holding PPAs.

The authors, Trevor Tombe and Andrew Leach, concluded that the cancelled PPAs could cost Albertans $600 million, not $2 billion as the NDP alleged.

Postmedia jumped all over this conclusion, saying it seriously undercut the NDP’s claim (whether to the losses or the entire case was unclear) and suggested the NDP was resorting to the standard practice in lawsuits, overstating losses in order to look good when the actual loss turned out to be lower than expected.

Postmedia failed to report the more significant conclusions presented by Tombe and Leach, including:

  • The government’s change to the Specified Gas Emitters Regulation (SGER) and the Carbon Competitiveness Regulation (CCR) did not render the PPAs unprofitable (Fig 7, p 11)
  • Falling power prices, in addition to the change to SGER and CCR did render the PPAs more unprofitable (Fig 7)
  • The original intent of the Change of Laws clause was to allow PPAs to be terminated if a change of law made PPAs unprofitable, but not to give PPA holders a way to avoid market-based losses (p 13)
  • The amended Change of Laws clause provided “near-complete downside protection” which is “much broader than protection due to government policy” (p 3)
  • Allowing PPA holders to terminate their PPAs is not necessarily the best outcome for Albertans because it could result in higher electricity prices and increased concentration of control over the marketing of electricity (p 12)

Some journalists like the Globe and Mail’s Justin Giovannetti understood the significance of the U of C report stating that “The power deals would still be profitable after the government’s new carbon taxes, worth only $150 million.  However, plummeting power prices will reduce the value of the contracts by $1.1 billion by 2020.”

The best Postmedia could muster was a comment that the report “shows that neither the companies…nor the government are right to blame one single factor for this unprofitability.”

This is a misstatement as far as it concerns the government—the government is not blaming any “single factor” for unprofitability, it’s simply asking a judge to determine whether the amendment to the Change of Law clause was lawful.

The truth about the facts

The American Press Institute says the value of journalism flows from its purpose which is to provide people with verified information so they can make better decisions.

The API says journalists use a systematic process called the “discipline of verification” to find not just the facts but the “truth about the facts.”

article-1290531-0054abfc00000258-823_634x333

Carl Bernstein & Bob Woodward

One of the three core concepts in the discipline of verification is transparency (the other two are humility and originality).  Transparency requires a journalist not to allow his readers to be deceived by acts of omission.

Postmedia’s failure to report on all of the conclusions contained in the Tombe/Leach report, particularly the conclusion that the NDP government’s changes to SGER and CCR did not render the PPAs unprofitable, places it on the wrong side of transparency.

And while we don’t expect Postmedia to clutch the NDP to its bosom, we do expect it to do a much better job at understanding and managing its biases.

If it can’t bring itself to do that it should do everyone a favour and give free rein to its “inner tabloid.”

Better that than pretend it’s engaged in journalism.

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38 Responses to PPAs and the Master Narrative in Alberta

  1. Ed Henderson says:

    Honesty and integrity are becoming rare. Sensationalism sells newspapers, honesty and integrity sell nothing.

    • Ed, sensationalism reared its ugly head in this story as well when the press discovered that that the Enron negotiator who persuaded the AEUB to amend the PPAs now works for Enmax. Mr Hemstock’s involvement in the negotiationwas described as “the latest twist” in a story headlined “Enmax breaks its silence” His work history was paraded in the press and Enmax’s spokeman was quoted as saying Enmax had done nothing wrong and that Mr Hemstock wouldn’t speak publicly because of the lawsuit. Good lord, the fact he once worked for Enron and 6 years later moved to Enmax is not part of a grand conspiracy. It’s simply an irrelevant fact.

    • carlosbeca says:

      You got that right!
      Newspapers reflect the health of our democracy!!! I rest my case.

  2. Eric Cameron says:

    I simply cannot believe how the quality of reporting by Postmedia has declined. They used to be very good (I’m showing my age, it’s been a long time since they were very good.)

  3. KEITH SUMNER says:

    Well said, thank you Susan!

  4. cyberclark says:

    Post Media is totally a Conservative front and they have had trouble with the truth for a good many years. For guys like me it left an opportunity to straighten them out.
    One prime example was the story on the comparison between Norway’s savings and that of Alberta”s. The turkey left out the important part that Norway had only half the production that Alberta does and had more than a trillion dollars in the bank.

    I had a ball on that one during the election.

    Having said that all newspapers remain pretty much broke. This leaves posts like yours as the leading source of news in the country. Thanks!

    • Thanks cyberclark. The Norway example is a great one…I too recall Postmedia and the Conservatives working extra hard to draw a line between Norway’s successful management of its natural resources and Alberta’s failure to do the same. It was as if they’d forgotten that Norway’s model was based on Lougheed’s “act like an owner” model.
      The API identifies a number of sources of bias including stories that are done and overdone to please the Boss (the corporate owners of the press), bias in favour of the Market (advertisers/corporations who drive the economy) and Political bias (which we’ve seen in Alberta for decades).

      • Of course, the fact that Norway is a COUNTRY, and Alberta merely a province, means nothing. Nor the fact that we send equalization payments to the east to the tune of billions of dollars per year

      • Carlos Beca says:

        I am not sure I understand what difference does it make that Norway is a country and Alberta a province. Although the equalization payments are a factor we are comparing two systems – one Norway where they own the resources and the companies take 15% and the rest belongs to the owner which has put aside 1 trillion dollars. The other – ours where we are not the resources owners and we get a royalty and we have 17 billion. In other words Norway gets 85% of the total and Alberta (Canada) get 15%. Exactly the other way around. This is what we are comparing.
        Despite knowing this from the beginning, the PCs, locked in their ideology of free market and whatever else they believe in, transferred the 85% to pockets outside Canada and possibly to a tax haven where not even taxes were taken.
        This story is as unbelievable as it can be.
        Natalie don’t you agree that we were taken in by a silly ideology?

  5. ABCanuck says:

    “…If it (Postmedia) can’t bring itself to do that it should do everyone a favour and give free rein to its “inner tabloid.” – wit, followed by:

    “Better that than pretend it’s engaged in journalism.” – the stake in the heart!

  6. Toby says:

    Bloomberg reports that Postmedia Network Canada Corp is worth 0.02 CAD.
    http://www.bloomberg.com/quote/PNC/A:CN

    So, who is paying the bills? Do they have some deep pocket American oil men using Postmedia to expand their political clout?

    • Toby, it looks like Postmedia took on debt to get this far. It managed to convert about $300 million in debt into equity by converting the debt holders into shareholders. Why anyone would want to be a shareholder when it’s shares are trading at 2 cents is beyond me but then again I’m not a Wall Street wizard. A little while ago I looked at who was in senior management and on the board of directors and found a lot of people who had previously been involved with companies that went belly up. Not exactly reassuring.

  7. Sam Gunsch says:

    The Sun columnists are the worst offenders. There is apparently no bottom yet to the depths of misleading or outright made nonsense in the commentary of Gunter and Bell. It’s their sort of commentary for several decades now in the USA that generated much of the misinformed portion of the public that is willing to believe Trump’s ludicrous claims.

    Tough to have a functioning democracy where it’s possible to have an informed debate about public policy, when so much of the media ‘pack’ is willing to operate like Fox News.

    A journalism academic/critic, Jay Rosen, tweeted about the problem created in the USA: @jayrosen_nyu Aug 4 tweeted: “Where is journalism in such a world? “Arguing the facts doesn’t help — in fact, it makes the situation worse.”
    Rosen’s tweet in response to this:
    Why facts don’t matter to Trump’s supporters
    https://www.washingtonpost.com/opinions/why-facts-dont-matter-to-trumps-supporters/2016/08/04/924ece4a-5a78-11e6-831d-0324760ca856_story.html?utm_term=.caa446cd0ae7

    • Sam, thanks for the link. I take some comfort in the comment at the very end: “What seems to be hurting Trump in the polls now are self-destructive comments that trouble even his most passionate supporters. Attempts to aggressively “correct” his remaining fans may only deepen their attachment.” Although that does raise a different concern for us here in Alberta. Will conservative politicians who are not as extreme as Trump capture Albertan voters with a watered down version of Make Alberta Great Again? A lot of people are jumping on the get-rid-of-the-NDP bandwagon without being able to articulate what exactly the NDP have done to “kill the economy with their socialist ideology”. You’d think they’d never heard of OPEC.

      • Sam Gunsch says:

        re Susan said: ‘ Will conservative politicians who are not as extreme as Trump capture Albertan voters with a watered down version of Make Alberta Great Again?”

        Absolutely, that’s what’s going on in the narrative building on the right. With the RW media echo chamber’s daily help.

        … I expect it’s obvious to you and most of Alberta’s political observers already…?

        Both Kenney and Jean/WRP are using mildly watered down versions of Trump’s ‘Great Again’ narrative that implies Obama/Clinton destroyed USA, like Notley’s NDP have taken AB down into the economic dumps.
        World oil prices be damned.

        And months ago, Levant’s book about the NDP was released with the title ‘The Destroyers’.

        The broad game plan has been underway for some months now. No?

      • Sam Gunsch says:

        http://www.rollingstone.com/politics/matt-taibbi-on-the-summer-of-the-media-shill-w434484

        excerpt: ‘But Fox’s coverage has been so overwhelmingly one-sided that it has lost forever the ability to convince non-conservatives of anything.’

        … another media critique column on USA politics and media that speaks to what’s now become blatant in the AB political coverage by key RW media commentators and editorialists. It’s always been there since the 1980s. But now I think it’s reasonable to say that it’s over the top.

        The difference in AB from USA, is that there’s no MSM players in-the-tank for the NDP like there is for Clinton/Democrats.

      • Sam Gunsch says:

        Echoes of Trump…?

        ‘A bunch of losers:’ Jason Kenney condemns tweet with Notley in crosshairs

        http://www.nationalnewswatch.com/2016/08/15/a-bunch-of-losers-jason-kenney-condemns-tweet-with-notley-in-crosshairs/#.V7I2F_nyuUk

      • Sam Gunsch says:

        Kenney’s absolutely right of course to condemn violent social media postings, but I was just struck by how ‘a bunch of losers’ sounds so much like a phrase Trump would use. And probably has.

      • cyberclark says:

        Kenny aspires to become the next Prince of Thieves. He’s arrogant and basically full of himself making him an easy target.

      • Sam Gunsch says:

        FWIW re: AB RW rhetoric echoes Trump:
        Here’s an example from #ableg of an AB political observer making the comparison between Trump’s politics and political style with that of some of AB’s RW’rs.
        ==================

        Ken Chapman ‏@KenChapman46 10h10 hours ago
        Ken Chapman Retweeted Unite Alberta

        Kenney is not a solution for Alberta now or in future. More a power politics Trump than public service Lougheed.

        Ken Chapman added,
        Unite Alberta @UniteAlbertans
        Only 2% approve provincially, 3% in Calgary where @jkenney riding is #TimeToCancelTruckTour #abpoli #yyc #yeg #lmao
        6 retweets 8 likes

  8. Joe Vipond says:

    The follow op/ed was not run by either the Herald or the Journal. Not fitting the narrative?
    The Electricity Market is Broken: closing coal can fix it
    By Dr. Joe Vipond and Dr. Alvin Finkel

    With the recent brouhaha about the government’s decision to take the utilities to court over surrendering their PPAs, it is easy to forget that, globally, coal is being phased out en masse, due to climate and health concerns. If we look at the root causes of the PPA problem, it becomes apparent altering the Alberta market could result in a win/win/win for government, utilities, and Albertans, while accelerating our coal phase out.
    The PPA debacle exists because of a recent oversupply of electricity on the market. Over the last year, the price has plummeted to about 1.5¢/kWh, from a recent historical average of about 6-8 ¢/kWh. Great for consumers (in the short term), but bad for utilities, and for encouraging replacement generation for upcoming coal retirements.
    The recent carbon price increase for big emitters, cited by the utilities as reducing profitability, costs them about 0.12 ¢/kWh, and another 0.3 /kWh in 2017. Yet the drop in pool prices from 2013 was about 6.5 ¢/kWh, or 20-50 times more impactful. So the PPA buyers have been losing a bundle predominantly due to a depressed electricity market, not the change in carbon pricing.
    The “Enron clause” permits the utilities to revert the PPAs back to the government (via the Balancing Pool), should any new regulation make their PPAs “more unprofitable”. The utilities are taking advantage of this clause to get out of arrangements that have been remarkably profitable on the whole, but are now losing money thanks to the low electricity price.
    Why the oversupply? It starts with the Alberta Electricity System Operator, whose forecast for electricity projected a 2.5% per annum growth to 2034, in stark contrast to the flattened or decreasing demand in other comparable jurisdictions. With our stagnating economy, this growth hasn’t happened. So when Enmax brought on the massive 860 MW Shepard gas plant in 2015, the demand simply wasn’t there.
    Almost simultaneously, Sundance 1 and 2 returned on line after having been closed in 2010, when they broke down and were deemed too old and decrepit to fix. TransCanada, the PPA owner, sued TransAlta, the plant owner, to revive the facilities… and won. Another unneeded 576 MW back on the grid.
    Finally, the government itself has some responsibility for the oversupply. The Balancing Pool (an independent arm of the Alberta Government), owns the PPAs for multiple facilities. We have a government that acknowledges coal pollution causes serious health impacts, and catastrophic climate change, so much so that they need to be shut down early. Yet the Balancing Pool is mandated to keep them running as commercial entities, further exacerbating the oversupply issues the market faces. If the PPAs are publicly owned assets, why aren’t they being used to bolster the public’s self-interest, and help shut down these polluting plants?
    In a functional market, if there is a drop in demand, supply would be cut back. Coal plants, the oldest and dirtiest generators, would be closed. But in Alberta, because of the PPAs, because of the dangling hope of compensation for plant closures and concerns over fairness, no one is willing to close a coal plant.
    So, instead of fighting over who now owns the PPAs, why not fix the market? If there is too much coal-fired electricity, how do we shut it down fairly? The utilities themselves have proposed the dial down option, impacting all generators equally, with an absolute decrease of 20% this year alone, ending up at zero in 2030. Another alternative would be for the Balancing Pool, acting in Albertans’ interest, to terminate its PPAs, freeing the market to act on these plants. A final option is to reregulate the market… guarantee the utilities a price equivalent to the average of the last few years, in exchange for early shut down of plants, starting today.
    Instead of bickering about who owns what, let’s look at the problem itself. Start dealing with the oversupply problem, by creating a fair system of early shutdown of coal, including those run by the Balancing Pool. Make the system work for Albertans, the government, and the utilities: generating clean electricity, at a fair price for all. And we’ll get cleaner air, and a safer climate, to boot.

    Dr. Joe Vipond is an emergency physician in Calgary and a member of the Canadian Association of Physicians for the Environment.

    Dr. Alvin Finkel is a prolific Canadian historian, professor emeritus of Athabasca University, and author of the blog ChangeAlberta.

    • Joe, thank you for this excellent overview of the problem of oversupply. The Herald and the Journal did their readers a tremendous disservice by not printing this oped. It’s hard to see what their issue would be–it’s well researched and presents the information objectively–other than the fact that it doesn’t fit the narrative.
      The Tombe/Leach report touched on the oversupply problem as well as the fact that when the NDP made reduced the amount of “free emissions” the coal fired plants were allowed to produce, bringing it into line with the “free emissions” the gas fired plants were allowed to produce, the coal fired plants became even more uncompetitive vis-a-vis the gas fired plants. Seems to me coal had a sweet ride in the PC years and isn’t prepared to give it up without a fight.

    • cyberclark says:

      The oversupply is lack of demand by oil. That coupled with world recession means BC and California has dropped their demands too so there goes the export markets. Likewise cable companies who have a huge surplus of bandwidth (if there is such a thing other than a market gauge)

  9. Joe Vipond says:

    The following op/ed was not run by either the Journal or the Herald. Not fitting the narrative?
    http://albertacoalphaseout.ca/oped-on-the-ppa-debacle/

  10. Sam Gunsch says:

    Another Rosen tweet below on the history and current story of Trump’s success with BS… Rosen’s excerpted a bit that serves as a warning to the RW media, i.e. of the chickens-coming-home-to-roost due to the decades of making crap up about Democrats complaining that the MSM was lib/left. So… in AB, Kenney/Jean/Fildebrandt et al will continue to be aided and abetted by AB RW media, right thru the 2019 election. Creation of alternate reality about NDP policies/actions. But…do it long enough and you make a Trump possible. AB already has the highest percentage of Trump supporters in the national poll done recently.
    =====================

    Jay Rosen ‏@jayrosen_nyu 9h9 hours ago
    He’s excerpted the key bit here:

    https://pbs.twimg.com/media/Cp2BSvnXYAA84Ch.jpg:large

    Rosen: I have been waiting for this to land on the right since October 2004. From @oliverdarcy’s interview of @SykesCharlie
    544 retweets 730 likes

    • Sam that was a very insightful clip…the RW radio commentator says “we’ve created a monster” and once this (Trump’s run) is over there has to be a reckoning. I wonder what that would look like. The media unlike other (I was going to say “real”) professions isn’t answerable to an oversight body. In fact when the media runs amok in search of a juicy story (Rupert Murdoch’s papers hacking into phones comes to mind) and government suggests it’s time to put in place a higher level of accountability, the media goes bananas arguing that such a thing would limit freedom of speech, become a censor, etc. I’m hopeful that citizens who want to understand what’s going on will support credible media outlets leaving the ones that spew mindless babble to implode eventually. I think I’ve just talked myself into cancelling my subscription to the Herald.

  11. Carlos Beca says:

    Susan I no longer read either the Edmonton Journal or the Sun. Given them money makes them survive. The Sun is bankrupt but despite their rhetoric about public debt, they continue supported by deep rich pockets of billionaires. Gunther is just atrocious and I am surprised he did not go to the Olympics because Rio de Janeiro is one of the shiny examples of his unregulated, ultra individualistic cowboy capitalist city. He would love to see the equality of the pure market along with the disgusting market created sewage system (cheaper) and the crime of a place where guns resolve all the problems. I guess he prefers the horrible socialist province he lives in. I will say and repeat that the current media is partly responsible for the political crisis now around the world. We are lucky that a new media seems to be slowly developing in Internet sites still looking for viability. Well one of the ways is to earn less just like the rest of us that have been downgraded so that we can afford to pay our CEOs the enormous bonus they need to support their life styles created by deregulation and so called globalization which is nothing but a fur coat on funneling money to half dozen pockets.

  12. carlosbeca says:

    Brazil, just like many before them spent billions for 2 weeks of elite sports fun in a city that for decades have not had a penny to help their own citizens leaving in atrocious conditions. We all keep supporting these displays of amazing wealth and waste. You can take a look at where these facilities will be soon

    https://ca.sports.yahoo.com/photos/picture-this-abandoned-olympic-venues-are-virtually-unrecognisable-today-slideshow/creepy-abandoned-olympic-venues-unrecognisable-photo-090230084.html

    In the meantime the people that live in the ‘Favelas’ of Rio will keep hoping for the Olympics of decency and respect. Maybe one day. Imagine leaving in a city where you as a citizen do not have the right to visit one of these swimming pools built so that foreigners can win their medals paid by tax payers money. Their money. Amazing

  13. Carlos, I heard an interview with Alex Cuadros on The Current. They were talking about the Rio Olympics. Cuadros wrote a book about the Brazilian billionaires and seems to understand the players very well. He said notwithstanding all the lofty talk about the Olympics bringing basic infrastructure like water, electricity and garbage collection to the favelas, it’s not happening. The money is going to the wealthy few. He said Athletes’ Village is a prime example. Unlike London which turned its athletes’ village into low income housing, Rio’s athletes’ village (which is government subsidized) will be turned into luxury housing. The developer said it will be called Ilha Pura which means “pure island”. The developer said it’s called that because the elite don’t want the poor anywhere near them. Wow.

  14. cyberclark says:

    The AESO I think is a very respectable organization. They work with whatever stripe of Government is in place.

    I enjoyed an extended conversation with a couple of their engineers a few years back. We were talking power lines.

    AESO told me a free market is much easier to expand generation than waiting for a Government to make up its mind about what is acceptable and what is not.

    The person who said the market system was broke and closing coal would fix that is suggesting there is an overabundance of electricity and no export markets for it and a dwindling demand for it in Alberta. So, limiting supply would on the surface at least be seen as a cure.

  15. Bob Raynard says:

    A few days ago Natalie Green complained about sending equalization payments east. This to me is the most blatant example of how our media is influencing, not informing. The Alberta government does NOT write a cheque to Ottawa for equalization payments. Ottawa gets the money from individual tax payments. A well off person in New Brunswick contributes as much to the NB equalization payment as a well off person in Alberta.

    The problem started when a credible, but biased, organization correctly calculated that Albertans pay more taxes to Ottawa than the value of the services the province receives from our capital, because of the higher number of well off tax payers we have. That was pretty wordy for people who spent more money on their truck than their education, however, so our media friends just simplified it to ‘we send transfer payments to Ottawa’.

    As a result the myth persists. If our media wanted to inform it would clear up the misconception. Instead, it perpetuates it to influence its readership. I looked at Rebel Media a few days ago (don’t worry; I showered afterwards) and there was Ezra urging people to ‘Ask Joe Ceci’ why Alberta is sending transfer payments. Ezra has to know the truth, but he gets more people to pay the $8 a month to his website with people annoyed with the system.

    • Bob thank you for this very clear explanation of the equalization payments myth. I think you nailed it when you said the “Ask Joe Ceci” campaign appeals to people who don’t want to spend any time understanding the issue and prefer to get their “news” spoon fed to them by Ezra and the gang.
      My husband was talking to someone the other day who said he was a staunch Trump supporter. Roy asked why. The fellow said because he hates Hillary. That’s an explanation for why he won’t support Hillary, it’s not an explanation for why he will support Trump. Unfortunately this distinction went completely over his head.

  16. David Grant says:

    No one should ever expect any real or fair iournalism from Post Media or the Sun Media chain. These outlets sang the praises for our late King Ralph and never gave him the scrutiny that the public sorely needed. It is also the media organization that has published loads of climate denial and arguably has polluted the public square(consult Desmogblog.com for more details). These media outlets tout the wonderful commentary of Tom Flanaghan, Barry Cooper and loads of right-wing commentaries for whom any government solution is the equivalent of Communism. They kept repeating the rubbish of the Fraser Institute that espouses the wonders of the marketplace in dealing with every problem. So it isn’t a surprise that then give the Notley Government the kind of coverage that they have given them so far.

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