If somebody took your car, then later phoned, confessed and offered to pay you $100, but insisted on keeping the car, how would you react?
Outrage, right?
That analogy is actually pretty close to TransAlta’s recent admission that it broke the law by manipulating electricity imports last fall, bilking customers through inflated rates for at least $4 million. The take could be as high as $5.5 million.
In return, TransAlta is expected to pay a $370,000 penalty, but still wants to keep the millions it received from consumers.
Should customers feel outraged? Of course. So outraged that they should demand a full-scale, public inquiry that examines how this happened and whether it has happened before.
Further, TransAlta breached a public trust, therefore, its future role as a power provider must be addressed.
At the very least, a fine equal to the ill-gotten profits is in order. And restitution in the same amount must be reimbursed to customers.
What’s frightening is that TransAlta may get away with it. The company confessed to its illegal dealings in a settlement agreement reached with the Market Surveillance Administration, the province’s power watchdog.
“Based upon the agreed statement of facts, the Market Surveillance Administration is satisfied, and TransAlta does not contest, that by its conduct TransAlta contravened Section 6 of the Alberta Electric Utilities Act during 31 separate hours during eight days in the month of November 2010.”
The administration is asking the Alberta Utilities Commission to accept the agreement. But the commission says it must first review the case to decide if TransAlta broke the rules, and if the corporation’s offer to pay $370,000 in penalties is adequate. A decision won’t be made until February.
TransAlta admits it broke the rules. What really needs to be reviewed is TransAlta’s future in Alberta.
The corporation admits it blocked imports of cheaper electricity from other jurisdictions, artificially driving prices up.
With the Market Surveillance Administration wanting the books closed by a gentle slap on the wrist, Premier Alison Redford is juggling a real hot potato here. Opposition parties are rightfully demanding a review of the province’s deregulated power market.
“When someone breaks the rules, the seriousness of punishment should be appropriate to the seriousness of the offence,” said Liberal energy critic Kent Hehr. “The responsibility of ensuring this never happens again falls squarely on the shoulders of government.”
Wildrose Leader Danielle Smith said this proves how unfair the power market system is to Albertans and why it needs to be changed.
Sheldon Fulton, of the Industrial Power Consumers Association of Alberta said, “This is the tip of the iceberg,” arguing that the power market must be revamped to protect the consumer — and a short-term response such as a fine is unacceptable.
Fulton further argues that the agreed fine between TransAlta and the Market Surveillance Administration is far from adequate. “We believe the fine should be at least commensurate with the impact on ratepayers and it needs to be a strong enough signal to the rest of the market that these practices are not tolerated.”
Is the administration effective in its role of monitoring the power grid and protecting consumers? Government spokesperson Bart Johnson says Trans-Alta’s case proves the power watchdog has some bite.
But the administration didn’t act until a complaint was filed by another power provider, suggesting that policing is lax.
And isn’t it time that every rate hike proposal be open to public scrutiny?
TransAlta power customers don’t want a tiny share in the puny fine. They want their car back.
Rick Zemanek is an Advocate editor.