TransAlta to pay $56M for market manipulation, AUC orders
Alberta Utilities Commission says penalty the largest of its kind in Canadian history
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 investigation.
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The commission said in approving the settlement Thursday it believes the penalty is large enough that it can't be considered a cost of doing business.
'Deterrent and warning'
"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.
The company said previously it would pay the fine in two instalments — the first of $30 million will be paid a month from now and the remainder would be paid one year later. The money will go into Alberta's general revenue fund.
Last year, TransAlta paid a nearly $150-million US settlement after allegations were raised that it manipulated the electricity and natural gas markets during California's energy crisis 15 years ago.
In 2011, the company also admitted it had manipulated electricity imports, driving up prices so that consumers had to pay an extra $5.5 million for power.
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."