The Alberta Utilities Commission (AUC) announced the approval of a $56 million administrative penalty/costs payment agreed to between Alberta's electricity watchdog and TransAlta Corp believed to be the largest of its kind in Canadian history. TransAlta is required to pay a $52-million administrative penalty, plus $4.3 million to cover the cost of the Market Surveillance Administrator's (MSA) investigation and hearing costs. This was the second (penalty) phase of a lengthy enforcement hearing, following a July 2015 decision by the AUC that TransAlta had committed contraventions of the Electric Utilities Act and related legislation. Borden Ladner Gervais (BLG) acted for the MSA throughout.
The administrative penalty includes $27 million to repay economic benefit realized by TransAlta, plus a monetary penalty of $25 million. The commission ruled that clear, cogent and convincing evidence presented by BLG lawyers proved that TransAlta timed outages at its coal-fired power plants in late 2010 and early 2011 to drive up power prices when demand was high. It also found the company used non-public information while trading in the electricity market.
In the July decision, the AUC concluded that TransAlta had breached the applicable legislative provisions pertaining to anticompetitive conduct, electricity market manipulation, trading on non-public outage records and failing to support a fair, efficient and openly competitive market. The regulatory body further concluded that one of the other respondents, an individual trader employed by TransAlta, had breached the trading provisions in the FEOC Regulation but had established a defence of due diligence on the basis he received trading approval from a superior.
The MSA engaged BLG to prepare and conduct the prosecution of this complex proceeding because of BLG's extensive enforcement and other experience before the AUC and other regulatory tribunals, and its electricity industry expertise. The BLG team was comprised of Randall Block, Q.C., John Blair, Q.C., Sandi Shannon and assistance from BLG associates Leanne Desbarats, Laura Poppel and Leah Mangano.
Combining industry and market knowledge with national reach, BLG is seasoned in dealing with complex proceedings before courts and regulators across Canada, having conducted numerous significant securities cases and regulatory proceedings in all jurisdictions. Among the firm's many recognitions, BLG's Commercial Litigation Group has been top-ranked by Lexpert for several consecutive years and Mr. Block and Mr. Blair are both recognized by Chambers Canada in the dispute resolution field. In addition, Mr. Block has been recognized by Benchmark Canada as the Energy/Resources Litigator of the Year.
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