Canadian Manufacturing

TransAlta to pay $56M for deliberately timing power outages

The Alberta Utilities Commission says the penalty is the largest of its kind in Canadian history



CALGARY—The Alberta Utilities Commission has approved TransAlta’s proposed $56-million settlement for deliberately timing outages at power plants to drive up electricity prices.

TransAlta will pay a $52-million administrative penalty, which the commission says is the largest of its kind in Canadian history, plus $4.3 million to cover the cost of the Market Surveillance Administrator investigation.

The administrative penalty includes $27 million to repay the profits TransAlta made, plus a monetary penalty of $25 million.

The commission said in approving the settlement Thursday that it believes the penalty is large enough that it can’t be considered a cost of doing business or a licensing fee for transgressions.

“This is the first time something like this has happened, we don’t want there to be a second,” AUC spokesman Jim Law said in an email.

Alberta Energy Minister Margaret McCuaig-Boyd said in a statement that the size of the settlement “should serve as a deterrent and a warning.”

She said the government is moving ahead with the electrical rate policy work it committed to in the election and that it continues to work to improve province’s electrical system.

“When Albertans receive their electricity bills, they expect the price they pay has been arrived at in a fair and ethical way,” said McCuaig-Boyd.

In July, the commission found TransAlta had violated Alberta’s Electric Utilities Act and its Fair, Efficient and Open Competition Regulation on four occasions and had engaged in insider trading.

The commission ruled that clear, cogent and convincing evidence showed TransAlta timed outages at its coal-fired power plants in late 2010 and early 2011 to drive up power prices when demand was high.

It also found the company used privileged information to benefit while trading in the electricity market.

In assessing the penalty the commission said “the contraventions resulted in significant, widespread harm to customers and the market by negatively impacting pool prices, the forward market and customer confidence.”

TransAlta spokeswoman Stacey Hatcher said that with the commissions’ approval of the consent order the company is “now focused on moving forward.”

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