The pattern continues

On November 9th TransAlta Corp. admitted it manipulated electricity prices in Alberta forcing consumers to pay an extra $5.5 million for electricity. TransAlta negotiated its own penalty [settlement] for its transgressions and paid a fine of $370,000. Additionally, TransAlta gets to keep the details of its illegal actions confidential and out of the public eye.

On November 12th TransAlta’s CEO, Steve Snyder, wrote in the Calgary Herald, “We did not intentionally breach any rules or regulations. We misinterpreted rules around the competitive business of electricity trading”.

How does a company commit a $5.5 million dollar offense against the rate paying public and then negotiate a $370,000 penalty? What’s to prevent TransAlta from committing the same offense again and again if the penalty amounts to no more than a 7% fee, otherwise known as a cost of doing business?

The Alberta Electric System Operator (AESO) and the Market Surveillance Administrator (MSA) are the two government created corporations responsible for overseeing Alberta’s electricity market. Both claim to be independent, and yet both have consistently sided with industry to the detriment of the rate paying public. The AESO is currently seeking a court judgment to limit the public’s right to attend rate increase hearings. AESO and the MSA are the very same organizations that couldn’t find any wrong doing when electricity prices spiked from $14.50 to $223.80 per megawatt in 2000. The comedic investigation was made all the more ridiculous after irrefutable evidence surfaced in 2005 [tape-recorded conversations] between TransAlta and Enron Employees. The tape recordings recorded employees engaged in the manipulation of market prices.

TransAlta’s market manipulation behavior has not been limited to Alberta. On June 25, 2003 the U.S. Federal Energy Regulatory Commission (FERC) issued a "Show Cause" order to TransAlta alleging that TransAlta manipulated electricity prices, along with Enron, leading to wide spread power outages in California. In a subsequent lawsuit, California’s Attorney General claimed that TransAlta charged rates in the California electricity markets that were unjust, unreasonable, and therefore illegal, and did so on thousands of occasions.

The FERC chose not to prosecute TransAlta because TransAlta claimed it profited less than $10,000. What has never been reconciled or explained to the public is how TransAlta, a multi-billion dollar company, was able to report nefarious profits of 89% in one quarter and 133% in one six-month time frame while it was manipulating market prices, and yet only make less than $10,000 in illegal profits.

Can Albertans trust what TransAlta or AESO executives tell us? These are the very same people that still claim the Bill-50 transmission lines are not being built to subsidize export. They tell Albertans this even after TransAlta received approval, on July 12, 2010, to export on average 48,000 megawatt hours each day ~ for the next ten years. [Alberta’s daily demand averages between 6,000 to 8000 megawatts hours.]

Alberta’s deregulated electricity system has been a disaster from the beginning. From one scandal to another including offenses of spying on citizens and market price manipulation, the system has fallen into disrepute. The organizations responsible for overseeing the system are ineffective and at times incompetent.

Albertans need an independent public inquiry into the abuses that plague Alberta’s electricity system. The public should be refunded for what they have been overcharged!

Joe Anglin
Rimbey, AB
(403) 963-0521