Electricity – Markets
The Market Surveillance Administrator (“MSA”) applied for approval of a settlement agreement (the “Settlement”) between the MSA, Canadian Hydro Developers Inc. (“Canadian Hydro”), and TransAlta Corporation (“TransAlta”), under s 44(2) and s 51(1)(b) of the Alberta Utilities Commission Act (“AUC Act”).
The AUC approved the Settlement between the MSA, Canadian Hydro and TransAlta, as filed.
After a referral by the AESO, the MSA began an investigation regarding conduct that occurred between October 26, 2020, and June 1, 2021, that related to the Summerview 1 battery storage asset (“SUM1”). The investigation found that TransAlta and Canadian Hydro had failed to ensure that SUM1 was equipped with a governor that had control settings providing an immediate, automatic and sustained response to frequency deviations on the Alberta Interconnected Electric System (“AIES”) (the “Governor Requirement”). This resulted in failure to meet the response requirement set out in ISO Rule 205.5. from the date of commissioning to June 1, 2021, and failure to comply with ss 6 and 20.8 of the Electric Utilities Act and s 2(d) of the Fair, Efficient and Open Competition Regulation (the “Contravention”).
In accordance with the Settlement, the MSA requested approval of an administrative penalty for Canadian Hydro and TransAlta in the amount of $2,470,204.68, and MSA’s costs of the investigation and this application in the amount of $65,000.00. TransAlta also undertook and agreed to undertake additional corrective actions, including meeting with the MSA to share and discuss the progress of implementing the corrective actions.
The AUC held that it has jurisdiction under s 56(4)(b) of the AUC Act to provide direction or make any order it considers appropriate in respect of a matter brought before it by the MSA under s 51(1)(b) of the AUC Act. Furthermore, the AUC held that it has jurisdiction under s 63 of the AUC Act to impose an administrative monetary penalty, including any terms or conditions it considers appropriate.
In approving the Settlement, the AUC noted that the parties to the settlement considered factors listed in s 4 of Rule 013: Criteria Relating to the Imposition of Administrative Penalties (“Rule 013”). Furthermore, based on s 3 of Rule 013, the AUC placed significant weight on the fact that TransAlta and Canadian Hydro fully and completely cooperated with the MSA in the course of its investigation, including TransAlta’s efforts to implement a program of corrective actions to prevent the recurrence of the same or similar contraventions.
As a result, the AUC found that the proposed settlement agreement was fair, reasonable and within a range of acceptable outcomes, and that, because the resulting settlement adequately addressed the contraventions, approval of the Settlement was in the public interest.