Author: Nigel Bankes Page 47 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.

Court Confirms that the AUC Can Take the Lead in Examining the Scope of the ISO’s Reporting Obligations

By Nigel Bankes

On March 11, 2016

In Energy

By: Nigel Bankes

PDF Version: Court Confirms that the AUC Can Take the Lead in Examining the Scope of the ISO’s Reporting Obligations

Case Commented On: Independent Power Producers’ Society of Alberta v Independent System Operator (Alberta Electric System Operator), 2016 ABQB 133

Alberta has a competitive electricity market which functions through the power pool coordinated by the Independent System Operator (ISO) known in Alberta as the Alberta Electric System Operator (AESO) (see the Electric Utilities Act, SA 2003, c E-5.1 ss 17 – 18 (EUA)). In simple terms power producers bid blocks of power (price/quantity pairs) into the pool at the price at which they are prepared to be dispatched (e.g. GenCo bids 10 MW at $40/MWh) on an hourly basis for the following seven days. Generators may change their offer prices closer to real time as the market unfolds: see MSA, Alberta Wholesale Electricity Market, 2010. The ISO ranks all bids in merit order (i.e. starting with the lowest bids) and moves up the ladder of bids until supply meets the load (demand). The last unit dispatched sets the system marginal price which is received by all generators which are dispatched. Thus, if the price settles at $80/MWh that is the price that GenCo will receive. If the price settles at $30/MWh GenCo will not be dispatched. See AESO, “Determining the Wholesale Market Price for Electricity”.

The Regulation of the Construction and Operation of Electric Distribution Systems in Alberta

By Nigel Bankes

On February 9, 2016

In Energy

By: Nigel Bankes

PDF Version: The Regulation of the Construction and Operation of Electric Distribution Systems in Alberta

Decision Commented On: AUC Decision 20799-D01-2016, Finlay Group, Complaint Regarding FortisAlberta Inc, Distribution Line Rebuild Project, February 3, 2016

This decision of the Alberta Utilities Commission (AUC) involves the rebuild of a short 25 kV distribution by FortisAlberta Inc. Other than from the perspective of the landowners who owned property adjacent to the distribution line this could hardly be a matter of great moment, but the decision deserves a post because of what it tells us about what seems to be a gap in the regulatory rules governing the construction and operation of distribution lines in the province. The Commission does its best to fill that gap but it does seem odd that while a homeowner needs to “pull a permit” from the relevant municipal authority before doing electrical work in their home, there is no AUC permitting requirement that a distribution utility must satisfy prior to constructing new distribution lines or changes thereto. The absence of such a permitting requirement may make sense for a sophisticated entity operating a “behind the fence” generation and distribution system for a designated industrial system under s. 4 of the Hydro and Electric Energy Act (HEEA), RSA 2000, c H-16 (see generally, Nigel Bankes, Giorilyn Bruno and Cairns Price, “The Regulation of Cogeneration in Alberta” (2015) 53 Alberta Law Review 383) but it makes less sense when the distribution utility is providing an essential public service. On the other hand, the absence of a history of high profile complaints or adverse publicity for electric distribution utilities for their construction operations suggests that, in general, they have been doing a good job – and “if it ain’t broke don’t fix it.”

Unpaid AFE Amounts Constitute Liquidated Demands With No Right of Set-Off Under the 1990 CAPL Operating Procedure

By Nigel Bankes

On December 21, 2015

In Contracts, Oil & Gas

By: Nigel Bankes

PDF Version: Unpaid AFE Amounts Constitute Liquidated Demands With No Right of Set-Off Under the 1990 CAPL Operating Procedure

Case Commented On: Talisman Energy Inc v Questerre Energy Corporation, 2015 ABQB 775 (MC)

This decision of Master Prowse offers an interesting example of careful parsing of the pleadings, and the agreed and contested facts, with a view to identifying possible issues for which summary judgment may be granted – while leaving the factually contested issues for a later trial. As in SemCAMS ULC v Blaze Energy Ltd. 2015 ABQB 218, (and see my post on that decision here) contractual language deeming billings to be liquidated demands and the “no set-off” provisions commonly found in oil and gas and other commercial agreements were important elements in the decision.

BC Court Confirms That a Municipality Has No Authority With Respect to the Routing of an Interprovincial Pipeline

By Nigel Bankes

On December 17, 2015

In Constitutional, Energy, Natural Resources, Oil & Gas

By: Nigel Bankes

PDF Version: BC Court Confirms That a Municipality Has No Authority With Respect to the Routing of an Interprovincial Pipeline

Case Commented On: Burnaby (City) v Trans Mountain Pipeline ULC, 2015 BCSC 2140

The Trans Mountain Expansion Project is still before the National Energy Board (NEB) (see the comment by Kirk Lambrecht QC here) and all the while spawning lots of litigation, some in the Federal Court of Appeal and some in the provincial superior courts. I have commented on most of that litigation in “Pipelines, the National Energy Board and the Federal Court” (2015), 3 Energy Regulation Quarterly 59 – 73.

In this most recent case the City of Burnaby was trying to get the support of the Supreme Court of British Columbia for an issue that it had already lost before the NEB and which, to put it in neutral terms, had failed to attract the interest of the Federal Court of Appeal. To review the facts briefly, TM as part of its expansion proposals, was considering alternative routing for its pipeline through Burnaby Mountain. In order to assess that route it required access to the relevant lands to carry out geotechnical and other studies. The City of Burnaby actively opposed the expansion project and served notices on TM’s contractors alleging violation of various Burnaby by-laws. That led TM to seek a ruling from the NEB confirming that the Board had the jurisdiction to authorize TM’s activities, and, to the extent that Burnaby’s by-laws were making it impossible for TM to carry out the necessary tests, a ruling that the by-laws were constitutionally inapplicable, or if not inapplicable, were in conflict with the provisions of the National Energy Board Act and therefore inoperative on the basis of the paramountcy doctrine. The Board provided that ruling in its well-reasoned Ruling No. 40. The Federal Court of Appeal denied leave without giving reasons, a practice that I have criticized in earlier posts here and here.

Court of Appeal Assesses Damages for Production on a Dead Oil and Gas Lease: An Important but Ultimately Disappointing Decision

By Nigel Bankes

On December 3, 2015

In Contracts, Oil & Gas

By: Nigel Bankes

PDF Version: Court of Appeal Assesses Damages for Production on a Dead Oil and Gas Lease: An Important but Ultimately Disappointing Decision

Case Commented On: Stewart Estate v TAQA North Ltd, 2015 ABCA 357

Courts of Appeal have at least two important functions. The first is a corrective function – the power and the authority to take a second look at a problem and to reach a decision which more properly accords with the law. For a recent example which demonstrates the crucial importance of this role see the Court of Appeal’s review of Judge Camp’s infamous decision in R v Wagar, 2015 ABCA 327, which was the subject of important commentary by my colleagues, Professors Koshan and Woolley here and here. In many cases, the scope of that corrective function turns on the applicable standard of review: correctness, unreasonableness or overriding and palpable error. One of the important issues in Stewart Estate v TAQA North Ltd was the application of the Supreme Court of Canada’s decision in Creston Moly Corp v Sattva Capital Corp, 2014 SCC 53 (CanLII), [2014] 2 SCR 633 (Sattva) to the interpretation of oil and gas leases. Sattva is generally cited as authority for the proposition that unless there is an “extricable question of law”, a trial judge’s interpretation of a contract should generally be accorded deference. Thus, an appellate court should only intervene if it is of the view that the trial judge has made an overriding and palpable error – the traditional test for an appellate court’s assessment of a trial judge’s findings of fact. The principal rationale for applying the same test to contract interpretation issues as well as to findings of fact is that the rules on contractual interpretation allow a trial judge to take into account the factual and commercial matrix when assessing the intentions of the parties as revealed in the language used in the contract.