TransAlta reaches tentative deal to settle power price-fixing charges

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TransAlta Corp. has reached a tentative deal with Alberta's electricity market watchdog to pay a $56-million fine to settle charges it manipulated Alberta power prices during the winter of 2010 and 2011.

The $56-million penalty for one of Canada's largest publicly traded wholesale power generators and marketers includes a $27-million "economic benefit" repayment, a $25-million administrative penalty, and $4-million to cover the Market Surveillance Administrator's legal costs.

In 2014, the province's Market Surveillance Administrator alleged that TransAlta engaged in "anti-competitive conduct" in 2010 and 2011 by taking three coal-fired power plants off line on four cold days, during high-demand hours and in periods when other players in Alberta's competitive power market were the least likely to be able to pick up the slack. This, the administrator said, drove up electricity prices and allowed TransAlta to reap millions in additional profits.

Earlier this year, the Alberta Utilities Commission (AUC) – the province's utilities regulator – found TransAlta contravened Alberta legislation by restricting or preventing competition, manipulating market prices and allowing insider trading, AUC spokesman Jim Law said.

The fine is still subject to approval by the AUC later this year. If the penalty is approved, TransAlta will pay in two separate instalments. The first payment of $30-million will be due 30 days after the commission approves the settlement. The remaining amount will be paid one year later.

Alberta electricity consumers will not reap any direct benefits from the fine. Mr. Law said the province's laws don't give the commission any discretion to return the money to consumers – it goes into the province's general revenue fund. But it doesn't preclude a civil court action.