This boss not at all like the old boss
There’s a line in The Who song We Won’t Get Fooled Again that announces the new boss being just like the old boss.
But when it comes to the recent transition in the C-suite at Transalta Corp., nothing could be further from the truth.
For starters, and for the first time in the company’s history, the new boss, Dawn Farrell, is female. This is quite a change for a company whose board of directors was once snidely referred to as being comprised of “dead white men.”
Farrell has spent most of her career in the power world — while outgoing CEO Steve Snyder cut his teeth at GE and ran Camco Inc. and Noma Industries before joining Transalta in 1996.
It’s also a fairly safe bet Farrell isn’t as enthusiastic a fan of the Swedish rock group ABBA as Snyder is.
Farrell is taking over the reins of a company at a much different time than when Snyder succeeded Ken Mccready. Consumers are demanding choice in terms of the fuel source used for electricity, while the growth in Alberta’s power consumption continues to outstrip that in other provinces because of the growth in the oilsands.
She also has to deal with the fallout from the company’s being fined for artificially inflating power prices in November 2010, news of which surfaced late last year.
In addition to paying the $125,000 penalty and returning the $245,073 the company netted, Farrell says Transalta has put in place a compliance officer dedicated to the trading operations to ensure anomalies — should they arise — will be reported.
And like most leaders, she also wants to grow TransAlta’s business.
As a company, Transalta has never been shy about looking overseas for opportunities, with 75 facilities in Canada, the western United States and Australia generating 8,000 megawatts of electricity.
Will that trend continue under Farrell?
Most probably, but in places where the company has a competitive advantage it can leverage.
“We will build our business where we have knowledge. We won’t set up shop in someone else’s backyard,” said Farrell, whose career began with the company 25 years ago, after she graduated with a master’s degree in economics from the University of Calgary.
Although Farrell is apt to play it down, a woman taking on the role of CEO of a multibillion-dollar company in Canada that is not a subsidiary of a U.S. or other international entity — and particularly in the energy sector — is something of an achievement.
And she’s accomplished all this by striking the elusive work-life balance that enabled her to be very involved in raising her two daughters, who are now in their 20s.
“I married the right guy, but I don’t have any hobbies. If I did, my family wouldn’t be very happy with me,” she said with a wry smile.
Not that she didn’t see herself getting to where she is today. “I knew I could do it, but I wasn’t sure if I would get there,” she said. So what made it for her? Talk to any successful executive and they will all point to one or two people who acted as mentors, and Farrell’s case is no different.
When she first joined Transalta, it was then-ceo McCready, and later, Snyder. In addition, Farrell counts Harry Schaefer, who served as Transalta’s board chair and Jim Leslie, who was senior vice-president of sustainable development at the company, and governance expert Stella Thompson as individuals who were instrumental in her career development.
Along the way, Farrell was sent to take the advanced management program at Harvard University, where she was one of a baker’s dozen of women in a class of 150, and she has held a wide array of positions within Transalta that have given her exposure to every aspect of the business.
Farrell was also pushed out of the Transalta nest for a time — by her own initiative.
Recognizing the only way to have a shot at becoming CEO of a company — any company — she would have to gain front-line operations experience.
For women who are not engineers working in the energy sector, this is particularly challenging. The solution? Farrell went to BC Hydro from 2003-07, where she held positions as executive vice-president for generation and executive vice-president of engineering, aboriginal relations and generation. While at BC Hydro, Farrell was involved in the negotiation of a number of settlements with First Nations and was able to see the positive outcomes of her work.
“In 2003, there was 80 per cent unemployment, they were completely dependent on government, but what we negotiated with them made a meaningful change in their lives,” she said.
From that, Farrell is optimistic the unresolved issues with First Nations groups that are presenting challenges to other companies operating in B.C., can be overcome with the right approach and the structuring of agreements aimed at improving the quality of life for the peoples involved.
When another opportunity presented itself, one of Farrell’s first calls was to Snyder for counsel and guidance. His advice? To come back to Transalta, which she did as executive vice-president of commercial operations and development in 2007.
When asked about the issues facing Alberta’s electricity sector, the opposition to new coal-fired plants and the ongoing debate about transmission lines, Farrell turns into a version of television personality, Mr. Dressup — quickly sketching a map of the province and outlining what needs to happen to ensure Albertans continue to get the electricity they want — when they want it and at a reasonable price.
The map shows where the hot spots for demand are, and where opportunities exist.
Some hold the view that building transmission lines from north to south does not take the province forward — because it entrenches a century-old model of power generation and distribution — but Farrell is not there.
Pointing to her hastily — but accurately drawn — map, she makes the point that the economic growth in the province is putting greater demands on the existing power infrastructure; to ensure Albertans can access electricity they need, the transmission lines must be built.
Farrell also points to the fact it would take three natural gas-fired plants to generate the same amount of electricity as one coalfired facility, which is one of the reasons coal remains a primary choice for power around the world.
Still, she does see a bigger role for natural gas and envisions a time when there will be power companies signing up long-term contracts with natural gas producers as a way to lock in supply costs while giving the producers a measure of certainty over pricing.
And much like there is discussion about a national energy strategy, Farrell says Alberta needs to have a dialogue about what a good electricity market looks like.
Why can’t it be a model that moves away from transmission lines and distributed generation?
“Right now, an 800-megawatt plant is most efficient in terms of cost but the 240-kilovolt line is not enough to move the electricity generated by an 800 MGW facility. That’s why the 500 KV line is important,” she said.
A more efficient transmission system will also result in a more diverse the fuel mix. In other words, it will mean better utilization of other options beyond coal — such as wind, natural gas or hydro.
Solar isn’t on the list because, as Farrell points out, solar is only eight per cent efficient in this part of the world, making it an unreliable source of power. The other point in favour of the transmission option is simply that more lines mean access to other sources outside the province in times of emergency, as well as the ability to export.
According to 2009 numbers, Alberta generated a mere $8 million from electricity exports — fourth lowest in the country after the Maritimes and Saskatchewan.
Pull all this together and there is nothing that could be construed as straightforward, when it comes to Farrell’s “to do” list.
And, of course, infused with all this is the influence of politics, which, if not properly managed can ultimately distort markets.
But if Farrell’s resume is anything to go by, not to mention her unpretentious, forthright nature, there should be little doubt that Transalta’s future is well in hand, which is good news for all stakeholders — employees, investors and customers.