Decision 20836-D01-2015
Suncor Energy Inc. Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership December 14, 2015
Alberta Utilities Commission
Decision 20836-D01-2015
Suncor Energy Inc.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation
Partnership
Application 20836-A001
Proceeding 20836
December 14, 2015
Published by the:
Alberta Utilities Commission
Fifth Avenue Place, Fourth Floor, 425 First Street S.W.
Calgary, Alberta
T2P 3L8
Telephone: 403-592-8845
Fax: 403-592-4406
Website: www.auc.ab.ca
Decision 20836-D01-2015 (December 14, 2015) • i
Contents
1 Introduction and background .............................................................................................. 1
2 Relevant statutory and regulatory provisions .................................................................... 2
3 Discussion and findings ........................................................................................................ 4 3.1 Asset ID reconfiguration ................................................................................................ 4 3.2 Fair, efficient and openly competitive operation of the market ..................................... 4
3.2.1 Offer control...................................................................................................... 4 3.2.2 Compliance programs at Suncor and TransAlta ............................................... 4
3.3 Reasonably necessary..................................................................................................... 6
3.4 Terms and conditions ..................................................................................................... 7
4 Order ...................................................................................................................................... 8
Appendix 1 – Proceeding participants ........................................................................................ 9
Decision 20836-D01-2015 (December 14, 2015) • 1
Alberta Utilities Commission
Calgary, Alberta
1 Introduction and background
1. On September 15, 2015, Suncor Energy Inc. (Suncor) filed an application1 with the
Commission pursuant to Section 3 of the Fair, Efficient and Open Competition Regulation
seeking an order from the Commission permitting the sharing of records not available to the public
between Suncor and TransAlta Generation Partnership (TransAlta). The records in question relate to
six generating assets formerly operated by TransAlta that made up asset ID SCR12 (TG3, TG4, GT5,
GT6, HRSG5, HRSG6).
2. Suncor and TransAlta previously obtained an order to share records regarding SCR1 in
Decision 2014-075. On July 13, 2015, Suncor and TransAlta notified the Commission of a
material transaction between the parties effectively transferring control of all TransAlta-owned
cogeneration and supporting assets to Suncor. On September 8, 2015, Suncor and TransAlta
notified the Commission that the transaction closed effective September 1, 2015 and that the
information sharing permitted under Decision 2014-075 was no longer necessary.3 On September
23, 2015, the Commission terminated the order contained in Decision 2014-075 with the release
of Decision 3031-D02-2015.
3. The September 15, 2015 application currently before the Commission outlined the
transaction, stating that Suncor has purchased, outright, two TransAlta steam turbine generators
and supporting assets that, at the time of the application, made up SCR1. Suncor also advised the
Commission that it has entered into a long term lease agreement, until December 31, 2030, with
an affiliate of TransAlta, for the remaining TransAlta generators and supporting assets. The
application stated that during the term of the lease, Suncor has the exclusive use, benefit, and
operation control of the leased assets and sole offer control of the TransAlta units. The
application further stated that ownership of the leased units will be transferred to Suncor
following the expiry of the lease on December 31, 2030.4
4. The application stated that Suncor and TransAlta entered into an agreement for the
provision of maintenance and Operations Diagnostic Centre (ODC) services by TransAlta to
Suncor in relation to the six assets formerly operated by TransAlta. Under the agreement, Suncor
stated it will share certain mechanical and technical performance information related to those
assets for the purpose of ensuring reliability.5
1 Application 20836-A001.
2 Asset ID SCR1 was split into three units as of December 1, 2015. The generating assets the order pertains to now
entitrely make up new unit ID SCR5. More detail is included in paragraph 6 of this decision. 3 Exhibit 20836-X0002, FEOC ODC Application, September 15, 2015, page 6.
4 Ibid., pages 6-7.
5 Ibid., page 7.
Suncor Energy Inc.
Preferential Sharing of Records between Suncor
Energy Inc. and TransAlta Generation Partnership
Decision 20836-D01-2015
Application 20836-A001
Proceeding 20836
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
2 • Decision 20836-D01-2015 (December 14, 2015)
5. On September 28, 2015, the Commission issued a notice of application regarding the
application made by Suncor.6 In the notice of application, the Commission advised that the
parties granted standing in the proceeding were limited to Suncor and the Market Surveillance
Administrator (MSA) in accordance with Section 3(5) of the Fair, Efficient and Open
Competition Regulation. The notice of application established a process and schedule for the
MSA to determine whether it would intervene in the proceeding and a requirement for the MSA
to advise the Commission about whether or not it required an evidentiary process. The MSA
filed its statement of intent to participate in this proceeding on September 29, 2015, advising the
Commission that it supports the application based on the information received.7 The MSA stated
that it did not require an evidentiary process involving information requests and the filing of
evidence. It noted, however, that the application did not include the desired duration of the
order.8
6. On November 5, 2015, Suncor submitted an additional letter indicating a change to its
initial application.9 The letter indicated that Suncor had requested the Alberta Electric System
Operator (AESO) divide asset ID SCR1 into three asset IDs. Suncor stated that, effective
December 1, 2015, the eleven generation units that previously made up SCR1 were divided
among three asset IDs: SCR1, SCR5, and SCR6. The generating units pertaining to this
application, TG3, TG4, GT5, GT6, HRSG5, HRSG6, make up the entirety of new asset ID
SCR5.10 Suncor further indicated that the term of the requested order was until December 31,
2030.11
7. In reaching the determinations contained within this decision, the Commission has
considered all relevant materials comprising the record of this proceeding. Accordingly,
references in this decision to specific parts of the record are intended to assist the reader in
understanding the Commission’s reasoning relating to a particular matter and should not be taken
as an indication that the Commission did not consider all relevant portions of the record with
respect to that matter.
2 Relevant statutory and regulatory provisions
8. The relevant statutory provisions respecting the sharing of records not available to the
public by market participants are found in the Fair, Efficient and Open Competition Regulation,
and its enabling statutes, the Alberta Utilities Commission Act, SA 2007, C. A-37.2 and the
Electric Utilities Act, SA 2003, c. E-5.1.
9. Section 5 of the Electric Utilities Act lists some of its purposes as follows:
…
(b) to provide for a competitive power pool so that an efficient market for electricity
based on fair and open competition can develop, where all persons wishing to
exchange electric energy through the power pool may do so on non-discriminatory
terms …;
6 Exhibit 20836-X0005, Notice of Proceeding, September 28, 2015.
7 Exhibit 20028-X0007, MSA SIP Proceeding 20836, September 29, 2015.
8 Ibid.
9 Exhibit 20836-X0008, Suncor Information Update Letter, November 5, 2015.
10 Ibid., page 2.
11 Ibid.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
Decision 20836-D01-2015 (December 14, 2015) • 3
(c) to provide for rules so that an efficient market for electricity based on fair and open
competition can develop in which neither the market nor the structure of the Alberta
electric industry is distorted by unfair advantages of government-owned participants
or any other participant;
…
(e) to enable customers to choose from a range of services in the Alberta electric
industry, including a flow-through of pool price and other options developed by a
competitive market, and to receive satisfactory service;
…
(h) to provide for a framework so that the Alberta electric industry can, where necessary,
be effectively regulated in a manner that minimizes the cost of regulation and
provides incentives for efficiency.
10. The Electric Utilities Act further states in Section 6 that “[m]arket participants are to
conduct themselves in a manner that supports the fair, efficient and openly competitive operation
of the market.”
11. Section 3(1) of the Fair, Efficient and Open Competition Regulation establishes that a
market participant shall not share records that are not available to the public relating to any past,
current or future price and quantity offer made to the power pool or for the provision of ancillary
services. Section 3(2) of the Fair, Efficient and Open Competition Regulation establishes
instances where records that are not available to the public may be shared. Section 3(3) of the
Fair, Efficient and Open Competition Regulation allows the Commission to issue an order
permitting the sharing of records, stating:
(3) The Commission may, on application by a market participant that is otherwise
prohibited from sharing records referred to under subsection (1), issue an order
permitting the sharing of those records on any terms and conditions the Commission
considers appropriate where the market participant establishes that
(a) the records will not be used for any purpose that does not support the fair, efficient
and openly competitive operation of the electricity market, including the conduct
referred to in section 2, and
(b) the sharing of the records is reasonably necessary for the market participant to carry
out its business.
12. Section 2 of the Fair, Efficient and Open Competition Regulation identifies conduct by a
market participant that does not support the fair, efficient and openly competitive operation of
the market. Relevant to the sharing of records, prohibited conduct would include:
…
(h) restricting or preventing competition, a competitive response or market entry by
another person, including
(i) a market participant directly or indirectly colluding, conspiring, combining,
agreeing or arranging with another market participant to restrict or prevent
competition, …
…
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
4 • Decision 20836-D01-2015 (December 14, 2015)
(j) manipulating market prices, including any price index, away from a competitive
market outcome;
3 Discussion and findings
3.1 Asset ID reconfiguration
13. Suncor notified the Commission that, as of December 1, 2015, SCR1 was divided into
three asset IDs; SCR1, SCR5, and SCR6. Suncor submitted that there was no substantive change
to its application and respectfully requested that the Commission render its decision with the
understanding that SCR1, as referenced in the initial application, was reconfigured to include
SCR1, SCR5 and SCR6 and that the relief requested by Suncor would be applied specifically to
SCR5. Suncor clarified that non-public information from SCR1 and SCR6 will not be shared
with TransAlta in respect of the maintenance and Operations Diagnostic Centre arrangements.12
Commission findings
14. The Commission is satisfied that the division of SCR1 into three separate asset IDs does
not materially change the initial application and will rely on the submission from Suncor that the
information sharing contemplated by its application will only apply to asset ID SCR5.
3.2 Fair, efficient and openly competitive operation of the market
3.2.1 Offer control
15. The applicant stated that the offer control held by each of Suncor and TransAlta is within
the amount permitted by Section 5(5) of the Fair, Efficient and Open Competition Regulation.
The application indicated that after the transaction closing date, Suncor will have its offer control
increase from 3.7 per cent to 6.05 per cent of the installed generation capacity of the Alberta
system and TransAlta will have its offer control decrease from 12.8 per cent to 11.9 per cent of
the installed generation capacity of the Alberta system.13
3.2.2 Compliance programs at Suncor and TransAlta
16. The application indicated that Suncor has assumed complete and sole operational and
market control of all generation units within SCR5.14 Suncor stated that it has sole responsibility
for the determinations and submissions of price, quantity, availability and dispatch information
to the AESO and Watt-Ex.15 Suncor further clarified that TransAlta, in providing the ODC
services:
(a) Will not have price or quantity control, and will have no trading authority,
(b) Will ensure that all TransAlta employees providing the services to Suncor will receive
compliance training to ensure that non-public information in regards to SCR5 will not be
12
Exhibit 20836-X0002, FEOC ODC Application, September 15, 2015, page 4. 13
Ibid. Suncor noted that as per Section 5(2) of the Fair, Efficient and Open Competition Regulation, Suncor and
TransAlta estimated their revised market share offer control volumes based on their revised interests after the
transaction closing date and the MSA’s June 30, 2015 Market Share Offer Control report. Suncor noted that the
methodology has since changed to include wind in the calculation; as such, the numbers are not directly
comparable and were presented for information purposes only. 14
Exhibit 20836-X0002, FEOC ODC Application, September 15, 2015, page 7. 15
Ibid., page 9.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
Decision 20836-D01-2015 (December 14, 2015) • 5
used for any purpose that does not support the fair, efficient and openly competitive
operation of the electricity market,
(c) Will ensure that the ODC is physically separated from other TransAlta groups, including
the TransAlta trading group. Trading employees are prohibited access to the ODC,
(d) Will ensure that all data regarding SCR5 will be stored on a secure server. Access to the
secure server will be restricted to only those personnel performing the services referenced
in the application. Firewalls exist to prevent access by any unauthorized person,
(e) Understands that Suncor will ultimately decided on outage dates and times of outages,
derates, and capability changes as needed; and
(f) Has a compliance team that has the authority to audit the ODC processes and performs
regular audits of existing processes to ensure compliance with the Suncor application.16
17. A senior officer of TransAlta provided a written representation that confirmed that any
non-public information received from Suncor, as described in the application, will not be used
for any purpose that does not support the fair, efficient and openly competitive operation of the
electricity market, including the conduct referred to in Section 2 of the Fair, Efficient and Open
Competition Regulation.17 In its representation, TransAlta stated that TransAlta Corporation
maintains a corporate code of conduct that is endorsed by senior management and is applicable
to all directors, officers and employees. It also stated that TransAlta Corporation maintains a
formal program for internal compliance, which includes both an operations compliance program
and an energy trading compliance program. TransAlta stated that elements of the compliance
program include, among other things:
(a) Independent active monitoring of transactions and communications.
(b) Resources and mechanisms through which TransAlta employees may seek compliance
guidance and are required to self-report potential compliance violations.
(c) Internal records management policies, which include requirements that specify how
records are to be retained, secured and destroyed.
(d) A compliance training program that is supplemented with internal guidance and
interpretation to clarify the requirements of applicable laws and regulations including the
Fair, Efficient and Open Competition Regulation, market rules, reliability standards and
policies within the corporate code, the energy trading code and the internal compliance
program.18
18. A senior officer of Suncor also provided a written representation that confirmed that
sharing of non-public records described in the application will not be used for any purpose
designed not to support the fair, efficient and openly competitive operation of the electricity
market, including the conduct referred to in Section 2 of the Fair, Efficient and Open
Competition Regulation.19 The representation also stated that Suncor maintains a formal program
16
Exhibit 20836-X0002, FEOC ODC Application, September 15, 2015, pages 10-11. 17
Ibid., page 12 and Appendix 5, PDF pages 48-49. 18
Ibid., PDF pages 48-49. 19
Ibid., page 12 and Appendix 4, PDF pages 46-47.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
6 • Decision 20836-D01-2015 (December 14, 2015)
for internal compliance intended to ensure compliance with the Fair, Efficient and Open
Competition Regulation.20
Commission findings
19. Based on the information contained in the application, the Commission finds that the
offer control held by Suncor or TransAlta does not exceed the threshold of 30 per cent of the
total maximum capability of the generating units in Alberta as set out in the Fair, Efficient and
Open Competition Regulation.
20. The Commission accepts and will rely on the representations of Suncor and TransAlta
contained in the application regarding the compliance policies, programs and existing plans for
internal compliance to manage confidential information associated with SCR5 in the manner
contemplated by the Fair, Efficient and Open Competition Regulation. The Commission accepts
such representations as sufficient assurances that no confidential information will be shared
between the parties for the purposes of price-fixing, price-manipulation or any other conduct
prohibited by the Fair, Efficient and Open Competition Regulation.
21. Based on the statements and representations of the parties, the Commission finds that the
applicant has established a reasonable likelihood that the non-public records proposed to be
shared between Suncor and TransAlta will not be used for any purpose that does not support the
fair, efficient and openly competitive operation of the Alberta electricity market.
3.3 Reasonably necessary
22. Suncor submitted that under the maintenance and ODC agreements, it will provide non-
public, real-time operational information to TransAlta that will be used by TransAlta to monitor
generator performance, to notify Suncor of equipment conditions, to provide guidance to Suncor
for planned and unplanned outages, and to schedule maintenance. Suncor submitted that
TransAlta will, therefore, be privy to non-public information related to the quantity or potential
quantity of electricity available.21
23. Suncor provided a representation from a senior officer that the sharing of non-public
records described in the application is reasonably necessary for Suncor to carry out its business
in respect of asset ID SCR5.22
24. TransAlta also provided a representation from a senior officer that the sharing of records
that are not available to the public described in this application is reasonably necessary for
TransAlta Corporation to carry out its business in respect of the maintenance and Operations
Diagnostic Centre services with Suncor.23
20
Exhibit 20836-X0002, FEOC ODC Application, September 15, 2015, PDF page 46. 21
Ibid., PDF pages 10-11. 22
Ibid., PDF page 46. 23
Ibid., PDF page 48.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
Decision 20836-D01-2015 (December 14, 2015) • 7
Commission findings
25. The Commission accepts the statements of Suncor regarding the nature of the records that
will be shared and the purpose in sharing the records. The Commission accepts and will rely on
the representations provided by senior officers of Suncor and TransAlta that the proposed
sharing of information is reasonably necessary for Suncor and TransAlta to operate their
businesses.
26. For the above reasons, the Commission finds that Suncor has established that the sharing
of non-public records as described in the application, is reasonably necessary for Suncor to carry
out its business.
3.4 Terms and conditions
27. Section 3(3) of the Fair, Efficient and Open Competition Regulation authorizes the
Commission to issue an order permitting the sharing of records on any terms and conditions that
the Commission considers appropriate.
28. Suncor requested that the order terminate December 31, 2030, pursuant to its agreement
for the provision of maintenance and ODC services by TransAlta to Suncor.24 Article 2.1 of the
“Poplar Creek Maintenance Services and ODC Services Agreement” outlines various
termination options available to the parties. Suncor stated that it will notify the Commission in a
timely manner should any of the options be exercised.25
Commission findings
29. Section 7 of the Fair, Efficient and Open Competition Regulation states that the
regulation expires on June 1, 2029, and as such, the Commission’s authority to grant an order
related to that regulation will also expire on that date.26
30. The Commission approves Suncor’s application to share records referred to in Section
3(1) of the Fair, Efficient and Open Competition Regulation with TransAlta as described in the
application and the “Poplar Creek Maintenance Services and ODC Services Agreement”
regarding asset ID SCR5 from December XX, 2015 until the earlier of June 1, 2029 or, the
written notice to the Commission of the termination of the commercial agreement between
Suncor and TransAlta in accordance with the terms of the requested order.
24
Exhibit 20836-X0008, Suncor Information Update Letter, November 5, 2015, page 2. 25
Ibid., 26
AUC Decision 2010-258, June 7, 2010, page 10, paragraph 41.
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
8 • Decision 20836-D01-2015 (December 14, 2015)
4 Order
31. It is ordered, pursuant to the provisions of Section 3 of the Fair, Efficient and Open
Competition Regulation, that the records referred to in Section 3(1) of the Fair, Efficient and
Open Competition Regulation be permitted to be shared between Suncor Energy Inc. and
TransAlta Generation Partnership from December 14, 2015 until June 1, 2029 subject to the
following terms and conditions:
a) The order only applies to the sharing of information between Suncor Energy Inc. and
TransAlta Generation Partnership relating to realtime mechanical and technical
performance information, operational information, and outage information in relation to
asset ID SCR5;
b) Suncor Energy Inc. must notify the Commission of the termination of the commercial
arrangements between Suncor Energy Inc. and TransAlta Generation Partnership within
30 days of the termination of commercial arrangements;
c) Suncor Energy Inc. must notify the Commission of any material changes to the
information and continued applicability of any representations contained within its
application that may affect the compliance of Suncor Energy Inc. or TransAlta
Generation Partnership with the Fair, Efficient and Open Competition Regulation within
30 days of the material changes; and
d) Suncor Energy Inc. must apply for a new order from the Commission permitting the
sharing of records not available to the public pursuant to Section 3 of the Fair, Efficient
and Open Competition Regulation for any agreements relating to other assets.
Dated on December 14, 2015.
Alberta Utilities Commission
(original signed by)
Tudor Beattie, QC
Panel Chair
(original signed by)
Anne Michaud
Commission Member
(original signed by)
Henry van Egteren
Commission Member
Preferential Sharing of Records between Suncor Energy Inc. and TransAlta Generation Partnership Suncor Energy Inc.
Decision 20836-D01-2015 (December 14, 2015) • 9
APPENDIX 1 – PROCEEDING PARTICIPANTS
Name of organization (abbreviation) counsel or representative
Suncor Energy Inc.
John Maher Laura Estep, Dentons Canada LLP (counsel)
Market Surveillance Administrator (MSA) Mark Nesbitt Andrew Wilkins
Alberta Utilities Commission Commission Panel Tudor Beattie, QC, Panel Chair Anne Michaud, Commission Member Henry van Egteren, Commission Member Commission Staff
Elizabeth von Engelbrechten (Commission Counsel) Kevin Thompson (Market Analyst, Market Oversight and Enforcement)