EDMONTON – TransAlta Corporation is offering to pay a $56 million settlement after Alberta’s regulator found it deliberately timed outages at power plants at peak times to drive up electricity prices.
TransAlta (TSX:TA) said the proposal includes the repayment of money it made by the activity, legal costs and an administrative penalty.
The offer is subject to approval by the Alberta Utilities Commission and is to be reviewed at a hearing later this year.
READ MORE: TransAlta plans review after Alberta ruling it shut down plants to raise prices
Jim Law, a commission spokesman, said TransAlta’s proposal is not a done deal.
“It is the AUC’s job to review the settlement, to look at the aggravating, the mitigating circumstances and determine if the settlement is in fact in the public interest,” he said Wednesday.
If the commission approves the settlement, legislation requires that the money go to the government’s general revenue fund, not to ratepayers, he said.
The commission held hearings after Alberta’s market surveillance administrator alleged that TransAlta manipulated the electricity market by shutting down coal-fired power plants in late 2010 and early 2011 to drive up power costs during periods when demand was high.
READ MORE: Allegations TransAlta manipulated electricity market disappoint Redford
In July it ruled that clear, cogent and convincing evidence showed that TransAlta timed the outages to maximize the benefit to its own portfolio.
The commission also found that TransAlta breached a regulation by allowing one of its energy traders to use privileged information related to plant shutdowns so that the company could benefit in the market.
Calgary-based TransAlta said Thursday that if its proposal is approved it would pay the settlement in two separate instalments, with the first payment of $30 million due 30 days after the commission makes its decision.
It said the remaining amount would be paid one year later.
READ MORE: Utility watchdog welcomes commission’s findings against TransAlta
Alberta Energy Minister Marg McCuaig-Boyd said the government will wait to comment until after the commission rules.
“This proposed settlement still needs to be approved by the Alberta Utilities Commission,” she said in an email.
“It is important that government allows the AUC to evaluate the proposed settlement independently, so we won’t be commenting further at this time.”
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