Media Statement – TransAlta settles California disputes
Calgary, AB (May 30, 2014) –TransAlta Corporation (TSX: TA; NYSE: TAC) announced that its settlement with California utilities, the California Attorney General and certain other parties (California Parties) to resolve claims related to the 2000 – 2001 power crisis in the State of California has been approved by the U.S. Federal Energy Regulatory Commission. Following the power crisis, a number of regulatory proceedings and legal claims were initiated by the California Parties demanding various refunds and penalties from sellers. To date, approximately 50 sellers have entered into settlement agreements with the California Parties to resolve these claims.
“We’re pleased to move forward and focus on positive commercial relationships in the State of California,” said Dawn Farrell, President and CEO. “It was in the best interests of our company to settle this matter and put it behind us. The settlement recognizes that TransAlta admits to no wrongdoing during the crisis.”
The settlement provides for the payment by TransAlta of U.S.$52 million in two equal payments over a 12-month period and a credit of approximately U.S.$97 million for monies owed to TransAlta from the accounts receivable held by the California Independent System Operator (ISO) and now-defunct California Power Exchange. The settlement will not have a material impact on the TransAlta’s earnings as TransAlta had already accrued for a potential settlement of the disputes for the year ended December 31, 2013 with a pre-tax charge to earnings of approximately U.S.$52 million.
For more information:
Manager, External Communications
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