Steve Snyder: TransAlta is taking steps to prevent future errors
This Letter to the Editor was published in the Calgary Herald and Edmonton Journal on November 12, 2011
Re: “TransAlta admits power price manipulation,” Nov. 8.
For more than 100 years, TransAlta has prided itself on providing low-cost, sustainable and reliable power to the people of Alberta.
We’re also proud to be a responsible generation and energy marketing provider, a good neighbour and a company that holds itself to the highest standard of integrity.
We operate in a complex real-time industry characterized by many levels of rules and regulations. Last fall, Alberta’s Market Surveillance Administrator notified us our power schedules may have breached one of those rules. Over the following months, TransAlta and the MSA conducted parallel investigations into the issue, and recently, we reached an agreement with the administrator.
First, I want to be clear we did not intentionally breach any rules or regulations. We misinterpreted rules around the competitive business of electricity trading in response to what we thought were similar scheduling practices by other companies. No specific guidelines on the timing of intertie imports and exports existed at the time. Once draft guidelines were released on Nov. 26 and clarified the issue, we stopped the scheduling practice immediately.
The settlement states that for 31 hours over eight days in November of 2010, we limited a competitive response by scheduling power toward the end of a 20-minute scheduling window. We complied with the scheduling rules, but in the opinion of the surveillance administrator, breached our general obligation to support the competitive operation of the market.
We realize we made a mistake and would like to apologize to Albertans for any loss of confidence it may have caused in TransAlta and in an electricity system and regulatory framework that showed itself to have worked.
TransAlta has been working with the surveillance administrator to reach a settlement that reflects the infraction. That agreement includes paying back all the economic benefit we saw – $245,073 – as well as a $125,000 administrative penalty. We’re also strengthening our compliance efforts to ensure similar errors don’t happen again.
The Alberta Utilities Commission will have to rule on the settlement, but for TransAlta, the agreement is a way to acknowledge our mistake and find a solution that meets regulators’ needs. It’s also an important step in rebuilding and strengthening the trust of our customers, our employees and all Albertans.
– Steve Snyder, President and CEO