Electricity – Markets
Application
TransAlta Corporation (“TransAlta”) submitted to the AUC that the interim order issued in Decision 27168-D01-2023, regarding an operations and maintenance agreement (the “O&M Agreement”) reached between TransAlta and AltaLink Management Ltd. (“AML”) was no longer needed. TransAlta and AML entered into the O&M Agreement regarding services provided by AML in connection with the assets sold by TransAlta to AML in 2001.
Decision
The AUC rescinded the interim order in Decision 27168-D01-2022 directing AML to continue to perform its obligations set out in the O&M Agreement.
Pertinent Issues
In 2001, TransAlta sold the entirety of its transmission business and assets to AML, apart from certain assets located on 13 First Nations lands in areas south of Edmonton (the “Withheld Assets”). The Withheld Assets are still owned by TransAlta. TransAlta and AML entered into the O&M Agreement, wherein AML has performed services in connection with TransAlta’s operation of the Withheld Assets.
In 2020, AML provided a notice of termination to TransAlta, indicating it would cease providing the services at the end of the initial term of the O&M Agreement. Following a dispute concerning the termination, TransAlta commenced arbitration. In Decision 27168-D01-2022, the AUC granted TransAlta an interim order directing AlML to continue to perform its obligations set out in the O&M Agreement until the outcome of arbitration was determined.
The arbitration tribunal concluded that the O&M Agreement is perpetual and that it does not contain an implied term allowing for termination on reasonable notice by AML at the end of the initial term or any renewal term thereof. Accordingly, the O&M Agreement remained in effect. With the arbitration panel’s determination, the AUC’s interim order was no longer required.
