Category: Energy Page 48 of 57

By: Nigel Bankes

PDF Version: Providing an Effective Remedy for the ISO’s Unlawful Line Loss Rule

Decision Commented On: AUC Decision 790-D02-2015, Milner Power Inc. and ATCO Power Ltd, Complaints re the ISO Transmission Loss Factor Rule and Loss Factor Methodology, Phase 2 Module A, January 20, 2015

In this decision the Alberta Utilities Commission (AUC) has decided that it has the jurisdiction to grant tariff-based relief in a case where a rule of the Independent System Operator (ISO) is found to be unlawful on the basis that it was unjust, unreasonable, unduly preferential, arbitrarily and unjustly discriminatory and inconsistent with various provisions of the Electric Utilities Act (EUA) (now SA 2003, c. E-5.1) and the Transmission Regulation (now Alta Reg 86/2007). Such relief may involve retrospective or retroactive adjustments to the ISO tariff going back to the date when the Rule first entered into force (January 1, 2006, Milner Power having originally filed its objection to the ISO Line Loss Rule in August 2005 before the rule came into force).

How much discretion does a regulator have to limit the recovery of a utility’s legal costs?

By Nigel Bankes

On December 10, 2014

In Administrative Law, Energy, Utility Regulation

By: Nigel Bankes

PDF Version: How much discretion does a regulator have to limit the recovery of a utility’s legal costs?

Case Commented On: ATCO Gas and Pipelines Ltd v Alberta (Utilities Commission), 2014 ABCA 397

In this case the Court of Appeal confirmed that the Alberta Utilities Commission (AUC) has some level of discretion as to the extent to which it allows a regulated utility to recover its prudently incurred legal costs from its customers when that utility participates in hearings called by the AUC to consider generic issues of interest to all regulated utilities and their customers and shareholders. One member of the Court (Justice Peter Martin) thought that the Commission went too far in denying recovery in relation to one set of costs and would have sent that matter back to the Commission.

The decision is interesting because it involves the intersection between an adjudicator’s discretion to allow for the recovery of legal costs and the general principle that a utility ought to have the opportunity to recover all of its prudently incurred operating costs (including the legal costs associated with rate setting) through the tariff approved by the regulator. A decision that recognizes that a utility has prudently incurred certain costs but which then denies the utility even the opportunity to recover those costs will generally be unsupportable: BC Electric Railway Company v Public Utilities Commission, [1960] SCR 837. In this case however there were special considerations and thus while the majority found the Commission’s decision both reasonable and correct, the decision is not likely of broad application – a point that Chief Justice Fraser herself seems to acknowledge at paras 70 – 73. In particular, and notwithstanding other and rather more sweeping statements from the Chief Justice (see, for example para 106, quoted below, and paras 110 – 111), it is not likely that the decision can be applied in the more routine situation in which a utility incurs legal costs as part of preparing and presenting its general rate application (GRA) to the AUC for it to set just and reasonable rates. The AUC may still scrutinize those legal costs on prudence grounds (and see here in particular Justice Martin at para 171) to ensure that the utility is not gold-plating its costs (e.g. where it chooses to retain expensive outside counsel to undertake a task that could be more economically dealt with in-house) but it likely cannot say (even on a reasonableness standard of review) that the legal costs associated with preparing and presenting a GRA are not recoverable.

A Revised Aboriginal Consultation Direction issued to the Alberta Energy Regulator

By Nigel Bankes

On December 8, 2014

In Aboriginal, Energy, Responsible Energy Development Act

By: Giorilyn Bruno and Nigel Bankes

PDF Version: A Revised Aboriginal Consultation Direction issued to the Alberta Energy Regulator

Direction and Decision Commented On: Energy Ministerial Order 105/2014 / Environment and Sustainable Resource Development Ministerial Order 53/2014; Prosper Petroleum Ltd., 2014 ABAER 013

On October 31, 2014, the Minister of Energy and the Minister of Environment and Sustainable Resource Development (ESRD) by Order issued a revised Aboriginal Consultation Direction to the Alberta Energy Regulator (AER). The main purpose of this Direction is “to ensure that the AER considers and makes decisions in respect of energy applications in a manner that is consistent with the work of the Government of Alberta” in meeting its consultation obligations associated with the existing rights of Aboriginal people (Direction at 2). This is the second Ministerial Order issued under s. 67 of the Responsible Energy Development Act, SA 2012, c R-17.3 (REDA) and it repeals the previous one. In April we posted a blog commenting on the first Order (available here). This post provides an overview of the changes introduced by the new Direction, comments on its scope, and identifies some of the issues that have yet to be addressed.

Alberta Utilities Commission Approves the Proposed Sale of AltaLink’s Transmission Assets to the Berkshire Hathaway Group

By Nigel Bankes

On December 1, 2014

In Energy, Utility Regulation

By: Nigel Bankes

PDF Version: Alberta Utilities Commission Approves the Proposed Sale of AltaLink’s Transmission Assets to the Berkshire Hathaway Group

Decision Commented On: AUC Decision 2014-326, AltaLink Investment Management Ltd. and SNC Lavalin Transmission Ltd et al, November 28, 2014

AltaLink owns significant transmission assets in Alberta. AltaLink in turn is owned by SNC Lavalin. SNC Lavalin wanted to divest itself of these assets and found a wiling purchaser in the form of the US based Berkshire Hathaway Group. The transaction however requires the approval of federal foreign investment and competition authorities (already in place) and of the Alberta Utilities Commission (AUC).

The AUC ‘s approval is required under the terms of s.102 of the Public Utilities Act, RSA 2000, c. P-45 (PUA) which provides as follows:

Unless authorized to do so by an order of the Commission, the owner of a public utility designated under section 101(1) shall not sell or make or permit to be made on its books a transfer of any share of its capital stock to a corporation, however incorporated, if the sale or transfer, in itself or in connection with previous sales or transfers, would result in the vesting in that corporation of more than 50% of the outstanding capital stock of the owner of the public utility.

Judicial Supervision of the National Energy Board (NEB): The Federal Court of Appeal Defers to the NEB on Key Decisions

By Nigel Bankes

On November 11, 2014

In Administrative Law, Energy

By: Nigel Bankes

PDF Version: Judicial Supervision of the National Energy Board (NEB): The Federal Court of Appeal Defers to the NEB on Key Decisions

Cases Commented On: Forest Ethics Advocacy Association and Donna Sinclair v National Energy Board, 2014 FCA 245; City of Vancouver v National Energy Board, and TransMountain Pipeline ULC, Order of the Federal Court of Appeal, Docket 14-A-55, per Justice Marc Nadon, October 16, 2014, denying leave to appeal the NEB’s scoping decision, Hearing Order OH-001-2014, 23 July 2014.

The National Energy Board (NEB) has its plate full; so too does the Federal Court of Appeal which has been hearing both judicial review applications and leave to appeal applications in relation to a number of projects including the Northern Gateway Project (Enbridge), the Line B Reversal and Line 9 Capacity Expansion Project (Enbridge), and the TransMountain expansion Project (Kinder Morgan). Interested readers can obtain details of these projects as well as Board decisions on the NEB’s website. I provided an assessment of the state of play in the Northern Gateway applications in a comment published in the Energy Regulation Quarterly.

The term “judicial supervision” in this post is designed to encompass both the idea of judicial review and appellate review of NEB decisions by way of appeal to the Federal Court of Appeal (FCA) (with leave). The normal route for obtaining judicial supervision of the NEB is by way of appeal (with leave) but one of the most significant recent decisions we have seen in this area, the Forest Ethics and Sinclair case, came before the Court on an application for judicial review. The case is important because it establishes, at least in the circumstances of that case, that the Board did not err in ruling that it did not have to consider the larger environmental effects of a pipeline project including the contribution to climate change made by the Alberta oil sands and facilities and activities upstream and downstream from the pipeline project.

This post aims to do three things. First it explains the different ways in which a party may seek judicial supervision of an NEB decision. Second, it examines the Forest Ethics and Sinclair decision and finally it offers some brief commentary on one important practical and philosophical difference between the way in which the Federal Court of Appeal treats leave applications and the way in which it treats judicial review applications – reasons.