By: Nigel Bankes

PDF Version: Clean-up Liability for Wells in the Mackenzie Delta

Case Commented On: ConocoPhillips Canada Resources Corp and Shell Canada Limited, 2019 ABQB 727 (CanLII)

Gulf, Conoco’s predecessor, undertook exploratory drilling in the Mackenzie Delta in the 1970s including the seven wells referenced in this case, most particularly the I-37 well. The wells had sump pits for the disposal of drilling waste and fluids. In 1973 Gulf obtained approval to suspend the I-37 well and fill the top two thousand feet of casing with diesel fuel. Gulf subsequently abandoned the I-37 well in the mid-1980s, installing a cement plug, but by then the diesel oil (at para 29) “was no longer in place”. “All of the well sites received final clearance under the Territorial Lands Use Regulation, CRC, Vol XVIII, c 1524, p 13645, ss 18, 33(5), 37 in September, 1986. This approval meant that the site had been satisfactorily reclaimed and the regulator was satisfied that the conditions of the land use permit had been met.” (at para 29) Prior to abandonment Gulf had used the data from these wells to procure significant discovery licences (SDL) under the terms of the Canada Petroleum Resources Act, RSC, 1985, c. 36 (2^nd Supp) for some of its properties. Continue reading →

By: Nigel Bankes

PDF Version: The Canadian Energy Regulator Shuts Down the Open Season for Enbridge’s Mainline

Decision Commented On: Canadian Energy Regulator, Letter Decision re Suncor Energy Inc. (Suncor), Shell Canada Limited (Shell), The Explorers and Producers Association of Canada (EPAC), and Canadian Natural Resources Limited (CNRL), Complaints regarding Enbridge Pipelines Inc. (Enbridge) Mainline Open Season, 27 September 2019

In what must be one of its first formal decisions, the Commission of the Canadian Energy Regulator (CER) (which replaced the National Energy Board (NEB) as of August 28, 2019) has required Enbridge to shut down the open-season that it was conducting for its mainline. The decision is brief (4 pages) and while it contains many references to the decisions and practice of its predecessor, the decision contains not a single reference to any statutory provision that it may be relying upon as authority to make this order. While I think that the conclusion is sound, I hope that the failure to reference statutory authority does not become common practice for the new regulator. Any decision maker claiming to exercise a statutory authority must satisfy itself that it has the authority to act and it should do so in a transparent and reasoned manner. There was perhaps a particular need to do so in this case since the application was filed under the terms of the National Energy Board Act, RSC 1985, c N-7 (NEBA),but resolved by the CER. Continue reading →

By: Nigel Bankes

PDF Version: The Rate Treatment of the Costs of Acquisition of a Utility Distribution System

Decision Commented On: AUC Decision 24405-D01-2019, Generic Proceeding to Review Rate Treatment of Distribution System Acquisition Costs Under Performance-Based Regulation, September 6, 2019

From time to time utility distribution systems change hands. In particular, in recent years we have seen investor owned distribution utilities purchasing municipally owned distribution systems and distribution systems owned by rural electrification associations (REAs) and gas co-operatives. The AUC convened this Generic Proceeding through Bulletin 2019-03 of March 12, 2019 to consider the rate treatment of the acquisition costs of a utility within the context of performance based regulation (PBR).

This post begins with brief summaries of PBR and the regulation of distribution systems. It then turns to examine the list of issues identified by the AUC in this proceeding. Continue reading →

By: Nigel Bankes

PDF Version: The AUC Invites Submissions on the Self-Supply Provisions of Alberta’s Electricity Legislation

Matter Commented On: Consultation on the issue of power plant self-supply and export, AUC Bulletin 2019-16, September 13, 2019

The Electric Utilities Act, SA 2003, c E-5.1, (EUA; and regulations) and the Hydro and Electric Energy Act, RSA 2000, c H-16, (HEEA) oblige generators in Alberta to offer their generation to the power pool and to exchange energy through the pool. There are number of exceptions to these requirements but in a series of recent decisions the AUC has observed that these exceptions are narrowly framed. These decisions are EPCOR Water Services Inc., EL Smith Solar Power Plant, February 20, 2019, Decision 23418-D01-2019; AUC Decision 23756-DOI-2019, Advantage Oil and Gas Ltd. Glacier Power Plant Alteration, April 26, 2019; AUC Decision 24393-D01-2019, International Paper Canada Pulp Holdings ULC Request for Permanent Connection for 48-Megawatt Power Plant, June 6, 2019; and AUC Decision 24126-D01-2019, Keyera Energy Ltd, Cynthia Gas Plant Power Plant Application, June 25, 2019. I commented on those decisions in Opening a Can of Worms and here and here. Continue reading →