The Regulatory Treatment of Stranded Assets in Alberta

By: Nigel Bankes

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Case Commented On: Fortis Alberta Inc v Alberta (Utilities Commission), 2015 ABCA 295

The Court of Appeal has now handed down its unanimous decision on the appeal of the Alberta Utilities Commission’s (AUC) decision known as the Utility Asset Disposition (UAD) Decision in which the AUC endeavoured to provide guidance to both electric and natural gas utilities as to the implications of the Supreme Court of Canada’s majority decision in Stores Block, ATCO Gas and Pipeline Ltd v Alberta (Energy and Utilities Board), 2006 SCC 4. I posted on the AUC’s decision here. The Court, in a reserved judgment written by Justice Myra Paperny (Justices Rowbotham and Watson concurring), declined to interfere with the AUC’s decision. In its judgment, the Court of Appeal emphasized that Stores Block and its progeny (see below) were still good law in Alberta. Furthermore, even though other jurisdictions had been able to distinguish Stores Block based upon the language of their utility statutes, or to confine it to its particular facts and circumstances, that was not possible in Alberta. Indeed, the jurisprudential record suggested (Fortis at para 74) that the Court of Appeal in Alberta had not taken a narrow and restrictive approach to Stores Block but had instead “applied the principles set out in that case more broadly”. As a result (Fortis at para 76):

The Commission, and this Court, are bound by Stores Block and the subsequent decisions from this Court. Only legislative amendment, reconsideration, or a reversal of Stores Block by the Supreme Court of Canada can change that.

For ease of reference the Stores Block progeny are as follows: ATCO Gas & Pipelines Ltd v Alberta (Energy & Utilities Board), 2008 ABCA 200 (CanLII), 433 AR 183 (Carbon), ATCO Gas & Pipelines Ltd v Alberta (Energy & Utilities Board), 2009 ABCA 171 (CanLII), 454 AR 176 (Harvest Hills), ATCO Gas & Pipelines Ltd v Alberta (Utilities Commission), 2009 ABCA 246 (CanLII), 464 AR 275 (Salt Caverns I), ATCO Gas & Pipelines Ltd v Alberta (Utilities Commission), 2014 ABCA 28 (CanLII), 566 AR 323 (Salt Caverns II).

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The Fundamentals of Tribunal Standing and Bootstrapping in Judicial Review

By: Shaun Fluker

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Case Commented On: Ontario (Energy Board) v Ontario Power Generation Inc., 2015 SCC 44

In Ontario (Energy Board) v Ontario Power Generation Inc. the Supreme Court of Canada revisits the fundamentals of standing for a tribunal in a judicial review or statutory appeal of its impugned decision. The substance of this case involves utility regulation in Ontario, and my colleague Nigel Bankes has written on that substance here. The relevant facts for this comment are simply that the Ontario Energy Board disallowed certain labour costs submitted by Ontario Power Generation in its rate application to the Board. The Ontario Divisional Court dismissed an appeal by Ontario Power, but the Ontario Court of Appeal reversed this finding, set aside the Board’s decision, and remitted the case back to the Board for reconsideration. The Board appealed to the Supreme Court of Canada. No doubt in response to what then appears to be the Board attempting to defend its impugned decision before the Supreme Court, the proper role of the Ontario Energy Board in these proceedings was raised and my comment here focuses on what the Supreme Court of Canada decides in this regard.

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Methodological Pluralism: Canadian Utility Law Does Not Prescribe any Particular Prudent Expenditure or Prudent Investment Test that a Regulator Must Apply

By: Nigel Bankes

PDF Version: Methodological Pluralism: Canadian Utility Law Does Not Prescribe any Particular Prudent Expenditure or Prudent Investment Test that a Regulator Must Apply

Case Commented On: Ontario (Energy Board) v Ontario Power Generation Inc., 2015 SCC 44, (OPG) and ATCO Gas and Pipelines Ltd v Alberta (Utilities Commission), 2015 SCC 45 (ATCO)

The last two weeks of September 2015 saw the release of three important court decisions dealing with utility regulation, two from the Supreme Court of Canada, the OPG case and the ATCO case, and one from Alberta’s Court of Appeal, the Utility Asset Disposition case (UAD): Fortis Alberta Inc v Alberta (Utilities Commission), 2015 ABCA 295. The two Supreme Court cases (which were heard together) deal with a utility’s opportunity to recover operating costs and the application of prudency tests to those costs. Justice Rothstein is the principal author of both judgments. The ATCO case is unanimous while Justice Abella offers a dissent in the OPG Case. The UAD case deals with what I have previously referred to as the continuing fall-out from the majority decision of the Supreme Court in Stores Block (ATCO Gas and Pipelines Ltd. v Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140).

This post summarizes the holdings in the ATCO and OPG decisions and then offers some preliminary comments on their implications. The post begins with some general observations on utility regulation statutes. I will aim to do a separate post on the UAD case.

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Legal or Social Responsibility? What are the Responsibilities of Internet Companies for Free Speech?

By: Emily Laidlaw

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The current controversy concerning the new Calgary-based app Peeple which will allow users to rate anybody they know – from their colleagues, to their friends, to their exes and neighbours – raises many questions familiar to internet lawyers. What are the rights of the subject matters of these ratings? To privacy? To dignity? What rights of free speech exist for anyone using these apps? And what are the responsibilities of the app developer, legally or ethically? For more on this controversy, see here, here, and here. There are some that question whether the app is a hoax, and I question it myself. Regardless, the Peeple controversy serves as a useful platform for discussions of wider issues in Internet governance. While there is much to be analysed concerning the privacy and harassment implications of this app, with this post I am going to focus on a different aspect of the controversy and that is the social responsibility of technology companies for human rights. By shedding light on the discussions happening in the international community I hope it contextualizes why things like Peeple are so controversial; they strike at the core of larger problems concerning the roles and responsibilities of businesses for human rights and the line between law and voluntary commitments. My recent research on this topic has been focused on free speech, so I will discuss the issue here in that context.

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Risk Allocation in Operating Agreements for Unconventional Resources

By: Fenner Stewart and Tony Cioni

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Model contracts play a principal role in reducing transaction costs. They offer parties a series of rules, which allocates risk so that delays, disagreements, over-expenditures, and under-capitalizations can be managed (or avoided altogether). The best model contracts are highly responsive, quickly adapting to new realities. Accordingly, top drafters are pressed to doggedly re-evaluate whether or not their model rules are optimal in light of the ever-changing nature of law and technology.

Modern hydraulic fracturing is a disruptive technology that shifts the incentives within oil and gas joint venture projects. Drafters are adjusting their contracts to adapt. Experimentation with model rules is presently occurring in jurisdictions such as the United States, Canada and Australia, where unconventional resources abound.

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