Governance

Building trust by taking action

Jul 29, 2015

A letter to Albertans from Dawn Farrell

Our first priority today is to acknowledge the concerns of Albertans.

Although we are surprised by the Alberta Utilities Commission ruling, we recognize our responsibility to ensure confidence in Alberta’s electricity system. We do not take trust for granted, and we apologize for the concerns that have arisen.

Almost five years ago, when this case began and we became aware that the market rules governing forced outages were in dispute, we immediately changed our compliance procedures. The actions that led to this case have not been repeated.

Today we are going further toward rebuilding trust. TransAlta will undertake an independent, third-party review of our current compliance procedures around forced outages — the timing of when generating plants are taken down for repairs or maintenance — including recommendations for improvement. The findings will be made public. We will ensure that this kind of event cannot happen with the highest standards in our industry.

We are reviewing a possible request for leave to appeal the decision to the Alberta Court of Appeal on some aspects of the ruling. We stand by the need for full and fair competition, and we also look forward to working with the province and the AUC to address these questions squarely and openly.

We argued this case based on our belief in open competition, fairness and a level playing field. We expect it in the electricity market, and Albertans expect it of TransAlta. This is my personal responsibility, and my commitment to our customers, shareholders and stakeholders.

We ask you to remember TransAlta’s long history in Alberta. A century is a long time to have operated a business. We will continue to fulfill our unique responsibilities to be good neighbours and respected corporate citizens in our communities.

We will live up to your expectations.

Dawn Farrell
President and CEO

Update: April 8, 2016

Summary Findings of Independent Reviews

McCarthy Tétrault, a national law firm with expertise in electricity markets, has completed an independent, third-party review of TransAlta’s forced outage practices. PwC Canada (PWC), a member firm of PricewaterhouseCoopers International Limited, has also completed an independent evaluation of TransAlta’s Energy Trading Compliance Program.

McCarthy Tétrault’s outage assessment concluded that:

  • Outage practices are consistent with the law in Alberta
  • Senior management has demonstrated a strong commitment to Compliance
  • Recommendations were provided to formalize the outage practices and procedures and related document management, and to incorporate the procedures into the existing TransAlta Compliance programs in terms of training, investigation procedures and annual reviews.

TransAlta has agreed to all of the recommendations.

Using a 10-point compliance effectiveness review framework, PWC’s assessment of TransAlta’s Energy Trading Compliance Program concluded that:

  • From a program design perspective, TransAlta’s program contains each of the 10 components of an effective compliance program, and includes the key elements required and normally seen at industry peers.
  • In terms of operational effectiveness, TransAlta’s program meets or exceeds current industry practice in each of the 10 components.
  • Recommendations were provided in 5 of the 10 areas, for increasing cross functional communications, cross-training of compliance staff, scheduling of training components more frequently throughout a year, formalizing documentation of monitoring tools and performance review assessments for compliance.

Summaries of both reports can be found below:

Review of TransAlta outage practices (letter)

 

 

Review of TransAlta outage practices (report)

 

PWC Energy trading compliance report

 

 

TransAlta has accepted all of the recommendations in both reports. The independent reviews were conducted in 2015 following an Alberta Utilities Commission ruling which found that TransAlta contravened Alberta’s Fair, Efficient and Open Competition Regulation and Electric Utilities Act.

TransAlta engaged these firms to ensure that our current practices meet the company’s legal and ethical obligations and the high expectations of our customers and stakeholders. We recognize the importance of providing an impartial review to underscore and reiterate our commitment to thorough and complete compliance practices.