Tran­sAlta plans re­view af­ter Al­berta rul­ing

Cape Breton Post - - BUSINESS -

Tran­sAlta Corp. (TSX:TA) says it will un­der­take an in­de­pen­dent re­view fol­low­ing a rul­ing from the Al­berta Util­i­ties Com­mis­sion that the com­pany de­lib­er­ately trig­gered out­ages at power plants to raise elec­tric­ity rates, thereby ma­nip­u­lat­ing the mar­kets.

“Although we were sur­prised by the de­ci­sion, we do rec­og­nize our re­spon­si­bil­ity to en­cour­age con­fi­dence in Al­berta’s elec­tric­ity sys­tem,’’ CEO Dawn Far­rell told a con­fer­ence call Wed­nes­day with in­vestors and an­a­lysts.

“We clearly do not take any­one’s trust for granted, and we be­lieve as a re­sult of that de­ci­sion, we re­ally do need to work on re­build­ing that trust.’’

The ac­tions that led to the case be­fore the com­mis­sion were stopped al­most five years ago, but the re­view will in­clude look­ing at how ef­fec­tive those changes were, she said.

“It’s go­ing to look at changes that we did make in 2011, and test them against the new de­ci­sion that came out Mon­day.’’

The com­pany has not yet de­cided who will con­duct the re­view, but it said it will make the find­ings public. Far­rell said she ex­pects the re­view to be com­plete in about six months.

The com­mis­sion held hear­ings af­ter Al­berta’s Mar­ket Sur­veil­lance Ad­min­is­tra­tor al­leged Tran­sAlta ma­nip­u­lated the elec­tric­ity mar­ket by shut­ting down coal-fired power plants that were un­der power pur­chase agree­ments in late 2010 and early 2011 to drive up power costs dur­ing win­ter pe­ri­ods when de­mand was high.

Tran­sAlta breached a reg­u­la­tion by al­low­ing its energy trader to use priv­i­leged in­for­ma­tion re­lated to plant shut­downs so that the com­pany could ben­e­fit in the mar­ket, the com­mis­sion con­cluded.

But it also found that the Mar­ket Sur­veil­lance Ad­min­is­tra­tor did not prove al­le­ga­tions that Tran­sAlta’s com­pli­ance poli­cies, prac­tices and over­sight were in­ad­e­quate and de­fi­cient.

The Cal­gary-based com­pany said it is re­view­ing the 211-page rul­ing and will de­cide within 30 days whether to ap­peal it in court.

Far­rell also said it’s es­ti­mated that Tran­sAlta made $5 mil­lion to $10 mil­lion in prof­its from the out­ages and the com­pany is con­sid­er­ing whether to ap­proach the Mar­ket Sur­veil­lance Ad­min­is­tra­tor to se­cure a penalty set­tle­ment.

“We clearly do not take any­one’s trust for granted, and we be­lieve as a re­sult of that de­ci­sion, we re­ally do need to work on re­build­ing that trust.’’

CEO Dawn Far­rell

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.