TransAlta contests price-fixing allegations related to Alberta coal plants

TransAlta Corp. said in a Feb. 19 financial report that it is working through at the Alberta Utilities Commission (AUC) price fixing allegations related to its coal-fired power plants in the Canadian province.

“On March 21, 2014, the Alberta Market Surveillance Administrator (the ‘MSA’) filed an application with the AUC alleging, among other things, that TransAlta manipulated the price of electricity in the Province of Alberta when it took outages at certain of its coal-fired generating units in late 2010 and early 2011,” the company reported. “TransAlta has denied the MSA’s allegations in their entirety.”

The company added: “An oral hearing before the AUC took place in December 2014. The next phase of the hearing, consisting of a written argument, is currently under way and will be completed by the end of February 2015. The AUC’s decision on this matter is expected within 90 days after the written argument has completed. Presently, the outcome is not determinable.”

Said TransAlta in its Feb. 10 final written arguments in this case: “In this Argument, TransAlta shows that the allegations against it do not hold water, factually or legally. Unlike the MSA, which has shifted and recast the emphasis of its case when the evidence did not measure up, TransAlta’s response to the allegations has remained constant.”

At another point in the final arguments, TransAlta wrote: “The MSA makes much of certain TransAlta internal memoranda providing preliminary profit estimates from the Portfolio Bidding Strategy and of TransAlta’s decisions being part of a ‘quest for profits’. The objective of the MSA is to use profits as a proxy for harm caused by the impugned conduct. In short, the MSA uses preliminary estimates of profit to attempt to prove harm, but profits are not, without more, demonstrative of harm. The MSA must present clear, cogent and convincing evidence of anti-competitive effect. The MSA cannot simply use estimated profits as a proxy for harm and in so doing avoid its clear evidentiary burden.”

The name of defunct U.S. power trader Enron, a company notorious for questionable trading practices, has also come up in this case. “This case has nothing to do with the Enron scandal in US power markets that occurred over a decade ago, and yet the MSA goes out of its way to dredge up the spectre of Enron in a transparent attempt to suggest the conduct under review in this Proceeding is on par with the events in California many years ago,” said TransAlta. “But, repeatedly uttering the word ‘Enron’ should be understood as nothing more than what it is: a publicity maneuver, a scare tactic and an effort to smear the Respondents. Raising the spectre of the Enron scandal does not elevate the MSA’s case.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.