Five minutes into lunch, Dawn Farrell makes a startling admission: She isn’t sure yet whether she enjoys her big new job atop Canada’s largest publicly traded power company.
It is rare for chief executive officers, even rookies, to express anything less than total satisfaction with their mandates. But after about two months running TransAlta Corp. of Calgary, Ms. Farrell concedes she is feeling her way into the staggeringly intricate job, having stepped up from the chief operating role in January.
“You feel a heavier weight – it all rests on you now,” says the daughter of a Calgary beekeeper and a self-professed “lousy leader” during the early years of her career.
Ms. Farrell is an island of disarming candour in an executive world rife with bombast and ego. In the serious business of global electricity, she refuses to take herself seriously – which might just be her biggest advantage.
She claims no hobbies – no gruelling triathlons, not even the odd golf outing – but focuses her energies on two consuming passions: her family and TransAlta, where she worked for more than two decades before replacing long-time CEO Steve Snyder on his retirement.
Both enterprises have a lot of moving parts. Married for 30 years to a carpenter, she is mother of two adult daughters and, at 52, recently became a grandmother for the third time. At century-old TransAlta, she oversees the country’s largest operator of coal-fired power plants, a player in natural-gas generation and hydro-electricity, and producer of a third of Canada’s wind power. And it is active in Canada, the western United States and Western Australia.
With that array of assets, TransAlta faces both market opportunities and operating risks.
Ms. Farrell was rudely welcomed to the CEO’s job by lower U.S. power prices and fallout from unplanned Alberta shutdowns, slashing profit 74 per cent in Mr. Snyder's last quarter as CEO.
But she says the mix of technologies and geographies reflects careful positioning by Mr. Snyder and his predecessors. “The table has been set and my job now is to take advantage of what’s been set,” she says. As the new CEO, she will be driving “a growth agenda,” she maintains.
That means pushing ahead aggressively with renewable energy. TransAlta is building a new wind farm in Quebec’s Gaspé region and sees potential for growth in Ontario. Thus, it is important for Ms. Farrell to make Eastern Canadian connections in her new capacity as CEO, which explains the working lunch of salads and sandwiches in a meeting room at the Fairmont Royal York in Toronto.
And while wind is the sexy clean technology, Ms. Farrell is not quite ready to abandon coal, the biggest and dirtiest weapon in TransAlta’s arsenal, providing 50 per cent of its power capacity, with the bulk of it generated in Alberta.
“Sometimes, when you are advocating for coal, you feel like you are advocating for tobacco,” Ms. Farrell says. “People make you feel that way.” But anyone who has watched her give a speech knows she can be forceful in making the case for coal as a continuing option in a power-hungry world.
Coal’s proportion of TransAlta’s power mix will decline, as coal-fired plants are shuttered at the end of their natural lives – as mandated under evolving government policy – and natural gas and renewables come on strong. But the option of updating and thus extending the lives of some coal plants – thus, reducing the massive capital cost outlay – should not be ruled out, she says, because economics and technology can change in a whisker.
She is pinning her hopes on carbon capture and storage, the still infant science of capturing emissions and storing them underground. Ms. Farrell argues it is good public policy to support carbon storage, because the world is awash in coal and somebody, somewhere, will burn it, whether in Canada, China or the developing world.
And it is particularly critical for Alberta, which will need a lot more power to meet demands from the oil sands and other future projects.
To those who dismiss carbon capture as uneconomic, she points to TransAlta’s experience with wind. In 1999, when the company bought its first wind farms, producing power from wind was two to three times more expensive than today. As a result of subsidies and larger-scale production, the cost has plummeted to the extent that “wind has just entered the realm of being economic. It no longer needs to be subsidized – and it shouldn’t be.”