Category Archives: Energy

Renewed Interest in Potential Carbon Capture and Storage Projects in Alberta

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Matter Commented On: Alberta Energy, Information Letter 2021-19, Carbon Sequestration Tenure Management, May 12, 2021

In a recent Information Letter, Alberta’s Department of Energy noted that it “has received a very large number of inquiries related to carbon sequestration tenure (i.e. projects that will undertake dedicated geologic storage [of carbon dioxide captured at industrial facilities within the province], without associated oil or gas recovery)” (at 1). This renewed interest is consistent with developments in the rest of the world, spurred on by the growing commitment to reach net zero carbon dioxide (CO₂) emissions by 2050. See, for example, International Energy Agency, Net Zero by 2050: A Roadmap for the Global Energy Sector (2021). Continue reading →

The Curious Demise of Alberta’s Turn Off the Taps Legislation

By: Nigel Bankes, Andrew Leach and Martin Olszynski

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Matters Commented On: Alberta (Attorney General) v British Columbia (Attorney General), 2021 FCA 84 (CanLII) reversing British Columbia (Attorney General) v Alberta (Attorney General), 2019 FC 1195 (CanLII), and Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5

The Turn Off the Taps legislation ((or, more properly, Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5) (PCEPA)) was passed under the Notley government in 2018. There have always been serious doubts as to the constitutional validity of the legislation (for discussion of the principal objections to the legislation, see ABlawg here) and it is hardly surprising that the Attorney General of British Columbia (AGBC) commenced actions first in the Alberta Court of Queen’s Bench and later in the Federal Court seeking to test the validity of the Act. As described by a majority of the Federal Court of Appeal in Alberta (Attorney General) v British Columbia (Attorney General), 2021 FCA 84 (CanLII) [Turn off the Taps IV], the AGBC had two main arguments. The first was that PCEPA is inconsistent with s 121 of the Constitution Act, 1867 (UK), 30 & 31 Vict, c 3; the second was that the PCEPA is a law in relation to interprovincial trade that falls outside the protection offered by s 92A(2) of the Constitution Act, 1867, the so-called ‘resource amendment’ to the Constitution. In particular, the AGBC noted that s 92A only protects laws pertaining to “primary production” as defined in the Sixth Schedule, and yet the PCEPA purported to apply to refined fuels which fell outside that definition. The Sixth Schedule provides as follows: Continue reading →

Important AUC Decision on the Treatment of Customer Contributions: Getting the Price Signals Right

By: Nigel Bankes

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Decision Commented On: AUC Decision 26061-D01-2021, Commission-Directed Examination of Distribution Facility Owner Payments under the Independent System Operator Tariff Customer Contribution Policy (23 April, 2021)

This decision has a long and complicated history arising most immediately out of Decision 22942-D02-2019 dealing with the Alberta Electric System Operator’s (AESO) 2018 tariff (for ABlawg comment on some aspects of that decision see here) as well as the AUC’s subsequent variance decision: Decision 24932-D01-2020.

This decision by the Alberta Utilities Commission (the Commission or the AUC) grapples with what are known in utility parlance as contributions in aid of construction (CIAC). Here is a straightforward example of a CIAC. Suppose that you live on an ordinary city block where the costs to tie in your house for utility service will be approximately the same for your house as would be for any other house on the block. You would not expect to pay extra to be tied in, and that this cost would simply be part of the utility’s general rate base. But suppose that you live on an acreage and some distance from the main distribution lines (gas, electricity, or water). In that case, it is entirely possible that you may be asked for a CIAC representing the actual incremental cost of the tie-in (or perhaps that amount above the cost of a standard tie-in). This is fair to other utility customers since your tie-in costs are more than the average and might not make economic sense to the utility, and it avoids inappropriate cross- subsidization. Since you have covered the capital costs of the tie-in, these costs do not form part of the utility’s rate base on which it is entitled to earn a return even if the utility owns that tie-in. Continue reading →

The Regulation of District Energy Systems in Alberta: Part 2

By: Nigel Bankes

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Decision Commented On: AUC Decision 26163-D01-2021, ENMAX Corporation and Calgary District Heating Inc., Applications for Disposition of the Downtown District Energy Centre and Transfer of the Combined Heat and Power Generating Unit (19 April, 2021)

This is a short but useful decision by the Alberta Utilities Commission (AUC or Commission) dealing with a district energy system as a public utility, the relevant considerations for granting exemptions and approving dispositions, and the regulatory consequences of moving from an exempt status to a regulated status.

The decision deals with a proposed sale by ENMAX of its Downtown District Energy Centre (DDEC) to Calgary District Heating Inc (CDHI) – a newcomer to Alberta’s electricity sector. ENMAX describes the DDEC in a 2016 application to the AUC as follows: Continue reading →

Coal Development Consultation Terms of Reference Revisited

By: Arlene Kwasniak

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Matter Commented on: Terms of Reference for the Coal Policy Consultation Committee, dated March 29, 2021

This is the seventh instalment in the ABlawg series on coal law. See Part One: the Coal Policy and Its Legal Status, the special edition: What Are the Implications of Reinstating the 1976 Coal Development Policy?, Part Two: The Rules for Acquiring Coal Rights and the Royalty Regime, Part Three: Was the Public Rationale for Rescinding the Coal Policy Ever Convincing?, Part Four: The Regulation of Coal Exploration, Part Five: What is the Role of the Federal Government in Relation to Alberta Coal Mines?, and Part Six: Coal Consultation Terms of Reference.

Nigel Bankes’ post “Part Six: Coal Consultation Terms of Reference” concerns the Terms of Reference (ToR) for the Coal Policy Consultation Committee (CPCC). The CPCC is responsible for consulting with Albertans as part of the process leading to the provincial government’s development of a “modern coal development policy” to replace the 1976 A Coal Development Policy for Alberta (the 1976 Coal Policy). In his post on the ToR, Professor Bankes, like most commentators, construed the ToR as being very narrow and precluding meaningful discussion of coal development, environmental and water matters, and land-use planning. Professor Bankes observes:

Continue reading →