TransAlta Corp. (TSX:TA)(NYSE:TAC) reported Nov. 23 that an independent arbitration panel granted it force majeure relief for derates and outages in 2010 and 2011 related to mechanical failure of critical generator components on the coal-fired Sundance Unit 3.
This decision validates that the mechanical failure was beyond TransAlta’s reasonable control, the company said.
“This decision further validates our good operating practices,” said Dawn Farrell, TransAlta President and CEO. “The circumstances of the failure were unforeseen; we did what was necessary and prudent to return the unit to service, maintain safe operations, and support the reliability of the Alberta system.”
TransAlta took Unit 3 of the Sundance facility out of service in May 2010 due to the mechanical failure of critical generator components. TransAlta then notified the Power Purchase Arrangement (PPA) buyer and claimed force majeure relief under the PPA. The PPA buyer rejected this claim, which was then referred to binding arbitration under the dispute resolution process set out in the PPA and in accordance with the Alberta Arbitration Act.
Sundance Unit 3 has a capacity of 353 MW out of the 2,126 MW of total capacity at the Sundance power plant, which has six individual units and serves as a baseload facility for the Alberta electricity system. TransAlta commissioned Unit 3 in 1976. Located about 70 kilometers west of Edmonton, Sundance is the largest power plant in Alberta and the largest coal plant in Western Canada.