By Cameron French
TORONTO (Reuters) - TransAlta Corp.
TransAlta, Canada's top investor-owned power generator, said it submitted the erroneous bid to the New York Independent System Operator for May 2003 transmission congestion contracts. The ISO manages the state's power transmission system and the contracts hedge the cost of transmission.
But the company's computer spreadsheet contained mismatched bids for the contracts, it said.
"It was literally a cut-and-paste error in an Excel spreadsheet that we did not detect when we did our final sorting and ranking bids prior to submission," TransAlta chief executive Steve Snyder said in a conference call.
"I am clearly disappointed over this event. The important thing is to learn from it, which we've done."
As New York ISO rules did not allow for a reversal of the bids, the contracts went ahead.
The pretax charge, to be taken in the second quarter, translates into 11 Canadian cents a share. The average earnings estimate for TransAlta among analysts polled by Thomson First Call was 18 Canadian cents a share for the period.
Company officials were quick to stress the hedge contract bid process, which is a blind auction using sealed bids, was far different from its gas and electricity trading business, in which contracts are negotiated in person.
TransAlta said it immediately suspended TCC auction bidding as soon as it became aware of the problem and started an extensive review to identify how the problem happened.
"(We'll) continue that process now, and then deal with the individuals in the appropriate fashion if there is anything found," Snyder said. "At the end of the day it's a simple clerical error."
TransAlta first entered New York's transmission congestion contract market in March 2002.
The hedge contracts give a glimpse into transmission constraints and how they might affect the value of power it generates at its plants in Ontario and New York, it said.
Shares in TransAlta, which runs power plants in Canada, the United States and Mexico, closed up 1 Canadian cent at C$18.75 in Toronto. It made the announcement after the market closed.
($1=$1.38 Canadian) (Additional reporting by Jeffrey Jones in Calgary)
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Only GlobeinvestorGOLD combines the strength of powerful investing tools with the insight of The Globe and Mail.
Discover a wealth of investment information and and exclusive features.