One of the roles of the Alberta Utilities Commission is to
regulate the conduct of Alberta electricity market participants so
as to promote a fair, efficient and openly competitive electricity
market in that province. As part of that mandate, the Alberta
Utilities CommissionAct (AUCA) established the
office of the Market Surveillance Administrator (MSA), a position
which has been described as serving a "watchdog" function
in respect of traders, generators and other market participants. In
order to provide a check and balance, the AUCA also contains a
formal complaint procedure available to market participants if they
object to the manner in which the MSA carries out its mandate.
Following a lengthy investigation that commenced in 2011, the
MSA concluded in late 2013 that in its view TransAlta Corp. and two
of its employees had contravened relevant legislation (the
Electric Utilities Act and the Fair, Efficient and
Open Competition Regulation) in relation to a corporate
strategy that entailed scheduling repair outages at certain plants
during periods of peak electricity demand (generally, weekday
evenings), thereby allegedly manipulating electricity prices to the
benefit of TransAlta's trading portfolio.
In late 2013, TransAlta and the two employees were informed that
the MSA believed they had contravened the legislation and, as a
matter of fairness, were invited to respond to the allegations.
Shortly after responding (but prior to the MSA formally referring
an enforcement proceeding to the Commission) TransAlta and the
employees filed written complaints under s. 58 of the AUCA with the
Commission about the MSA's conduct during both the
investigation and a consultation period which pre-dated the
Pursuant to s. 51 of the AUCA, the MSA requested that the
Commission initiate a hearing into the allegations. The MSA also
asked the Commission to dismiss the three complaints under s.
58(2)(a) of the AUCA, which provides for mandatory dismissal of any
complaints that are related to a matter the substance of which
"is before [... ] the Commission".
That provision of the AUCA had not previously been interpreted,
so the issue attracted considerable industry interest. TransAlta
and the employees argued that their complaints should not be
dismissed, first on the basis that since the complaints
preceded the enforcement matter having come before
the Commission they could not be related to a matter that
"is" before the Commission; secondly,
that complaints about the MSA should be dismissed only if they are
clearly unmeritorious; and thirdly that their complaints were not
related to the MSA's enforcement matter.
On May 14, 2014 (AUC Decision 2014-135) the Commission issued a
decision agreeing with the MSA that the complaints were related to
a matter before the Commission at the time of the dismissal
application, and were required to be dismissed. It did not
matter that the complaints had been filed before the enforcement
matter was actually brought before the Commission by the MSA. The
Panel also agreed with the MSA that the concerns expressed by
TransAlta and the employees about the MSA should be addressed in
the context of the MSA's enforcement hearing as possible
defences or mitigating factors, but not as statutory complaints. In
its reasons, the Commission ruled on the proper statutory
interpretation of s. 58(2)(a) and concluded that the purpose of the
provision "is to address the conflicts that could arise where
a complaint and a matter brought forward by the MSA are premised on
common issues". Here, the Commission concluded the complaints
and the MSA matter were related in that both concerned the
timing of TransAlta's discretionary outages and its forward
trading in the electricity market. It also concluded that an overly
technical or literal interpretation, namely that the MSA matter
would already have to be before the Commission at the time of the
complaint, could "produce an absurd result" and therefore
that no such interpretation should be adopted.
In the result, the Panel dismissed all three complaints and
ordered that a hearing of the MSA's allegations commence
in August 2014. The decision will make it more difficult for a
party under investigation to delay or change the character of
enforcement proceedings by filing a complaint about the MSA.
Decisions under s. 58 are not subject to appeal, so the complaint
dismissal ruling is final and binding.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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