Author: Nigel Bankes Page 29 of 89

Nigel Bankes is emeritus professor of law at the University of Calgary. Prior to his retirement in June 2021 Nigel held the chair in natural resources law in the Faculty of Law.

Matter commented on: Bill C-55, An Act to amend the Oceans Act and the Canada Petroleum Resources Act, as passed by the House of Commons, April 20. 2018.

There is a lot of attention focused on the Senate these days, principally in relation to Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, (and the subject of numerous ABlawg posts); but, there are other Bills standing in a long and slowly moving line in that Chamber as well. These Bills include Romeo Saguenash’s private member’s Bill C-262 (also endorsed by the Liberals) to give application to the United Nations Declaration on the Rights of Indigenous Peoples in Canadian law (and the subject of an ABlawg post here), but also proposed amendments to the Oceans Act, SC 1996, c 31 to create an expedited process for establishing marine protected areas (MPAs). This blog post focuses on the latter.

How Should We Assess Transmission Upgrades When They are Requested by the DFO?

By Nigel Bankes

On March 21, 2019

In Administrative Law, Utility Regulation

By: Nigel Bankes

PDF Version: How Should We Assess Transmission Upgrades When They are Requested by the DFO?

Decisions Commented On: (1) AUC Decision 23339-D01-2019, Alberta Electric System Operator Needs Identification Document Application AltaLink Management Ltd. Facility Applications Provost Reliability Upgrade Project, and January 22, 2019; and (2) AUC Decision 23393-D01-2019, Alberta Electric System Operator Needs Identification Document Application AltaLink Management Ltd. Facility Application Fincastle 336S Substation Upgrade, February 14, 2019.

These two decisions deal with the Alberta Utilities Commission’s (AUC) assessment of a needs identification document (NID) to build new transmission in a situation where the NID was prepared on the basis of a system access service request (SASR) originating from the incumbent distribution facility owner (DFO) – in this case, FortisAlberta. Both cases triggered a dissenting opinion from AUC Vice Chair Anne Michaud. In each case the principal difference between the dissent and the majority turned on the Alberta Electric System Operator’s (AESO) responsibility to assess the reasonableness of the need for system access where the impetus to prepare the NID came from the DFO. In both cases, Vice Chair Michaud takes the view that if the AESO fails to properly scrutinize the need for the DFO’s SASR request then there is no public interest assessment of such a request. In both cases Vice Chair Michaud would have sent the NID back to the AESO with the suggestion “that the NID application incorporates an analysis of the need for the project that includes a weighing of the expected increase in reliability against the potential impacts of the project, having regard for the fact that the AESO is not required in all circumstances to respond to a SASR with a proposed transmission solution.” (Provost Decision at para 313).

The argument that greater scrutiny may be required in the case of a NID prepared in response to a SASR request from a DFO draws on the understanding that a DFO (unlike the AESO) does not have a public interest mandate and may therefore have an incentive to overbuild to increase its rate base – unless dis-incented from doing so by the new approach to capital investment in Phase II of performance based regulation – a doubtful proposition at best. New transmission is expensive and the cumulative effects on consumer bills significant. An important element of assessing the need to upgrade existing transmission facilities is the applicable reliability standard: the higher the reliability standard the greater the capital expense. What is that standard? Who gets to set that standard and should it be the same for all that are connected to the transmission system?

English Court of Appeal Confirms that an Operator Entitled to be “held neutral”

By Nigel Bankes

On March 19, 2019

In Energy, International Law, Oil & Gas

By: Nigel Bankes

PDF Version: English Court of Appeal Confirms that an Operator Entitled to be “held neutral”

Case Commented On: Spirit Energy Resources et al Marathon Oil UK LLC, [2019] EWCA Civ 11.

In a decision that will be of interest to the energy bar in all oil and gas jurisdictions in the common law world, the English Court of Appeal, in a unanimous decision, has confirmed the principle that operations conducted by an operator under the terms of a joint operating agreement are conducted for the joint account and for the shared risk of all working interest owners and that an operator is not an insurer for those other working interest owners. The Court did so in the somewhat unusual context of a liability for unfunded defined pension benefits.

Opening a Can of Worms: What are the Applicable Market Rules for Generation Where the Generator Fails to Use the Entire Output?

By Nigel Bankes

On March 5, 2019

In Administrative Law, Utility Regulation

By: Nigel Bankes

PDF Version: Opening a Can of Worms: What are the Applicable Market Rules for Generation Where the Generator Fails to Use the Entire Output?

Decision Commented On: EPCOR Water Services Inc., EL Smith Solar Power Plant, February 20, 2019, Decision 23418-D01-2019

This decision raises important questions as to the applicable rules for self-generation where the generator seeks to export any surplus to the grid. The decision deserves to be read by all those engaged in self-generation beyond the micro and small levels, including self-generation that benefits from designation as an industrial system.

Leave to Appeal Denied on the AUC’s Jurisdiction to Create an Effective Remedy in the Line-Loss Saga

By Nigel Bankes

On February 11, 2019

In Utility Regulation

By: Nigel Bankes

PDF Version: Leave to Appeal Denied on the AUC’s Jurisdiction to Create an Effective Remedy in the Line-Loss Saga

Case Commented On: Capital Power Corporation v Alberta Utilities Commission, 2018 ABCA 437 (CanLII)

There are previous posts on ABlawg dealing with the line-loss issue including a post on the Alberta Utilities Commission’s (AUC) 2015 decision at issue in this case. In that decision, the AUC concluded that it had jurisdiction to order an effective remedy to deal with the fact that the Alberta Electric System Operator’s (AESO) line-loss rule in effect between 2005 and 2012 was unlawful and invalid, and that it could do so even though the result would be retrospective rate making. Some generators would receive rebates and some would receive invoices for past transmission losses.

Author: Nigel Bankes Page 29 of 89

The Senate, the Oceans Act and Marine Protected Areas

How Should We Assess Transmission Upgrades When They are Requested by the DFO?

English Court of Appeal Confirms that an Operator Entitled to be “held neutral”

Opening a Can of Worms: What are the Applicable Market Rules for Generation Where the Generator Fails to Use the Entire Output?

Leave to Appeal Denied on the AUC’s Jurisdiction to Create an Effective Remedy in the Line-Loss Saga