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TransAlta’s $56-million penalty for manipulating power prices and allowing an employee to engage in insider trading five years ago has been approved by the province’s electricity regulator.

The settlement approved Thursday by the Alberta Utilities Commission (AUC) is believed to be the largest of its kind in Canada and approaches the maximum penalty allowed under provincial law, said AUC spokesman Jim Law.

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“This amount is protective and preventative,” said Law. “This is the first time this has happened. Albertans need to have confidence it won’t happen again.”

The magnitude of the penalty “is such that it cannot be considered by TransAlta or any future transgressors as the cost of doing business or a licensing fee for transgressions,” the AUC said in its decision.

It said the contraventions by TransAlta in 2010-11 “resulted in significant, widespread harm by negatively impacting pool price, the forward market, and consumer confidence.”