On September 10, 2012, the Divisional Court released its decision dismissing SkyPower group of
companies' (Skypower) application for judicial review of
Ontario's new Feed-In-Tariff (FIT) rules.
Skypower sought a number of declarations concerning the Ontario
Power Authority's (OPA) and Ministry of
Energy's (MoE) decision not to process FIT applications
submitted before April 5, 2012 (FIT 1 Applications) in accordance
with FIT rules version 1.5.1 (FIT 1). Skypower had 66 applications
submitted under FIT 1 awaiting review and a further 52 applications
that had been screened by the OPA and not offered a contract. On
April 6, 2012, upon a MoE directive, the OPA released new draft
rules for FIT applications that were finalized on August 10, 2012
(FIT 2). The new FIT 2 rules applied to Skypower's 118
applications (Existing Applications) that were submitted under FIT
1. Skypower argued that as a consequence of these changes,
virtually all of its Existing Applications would be ineligible for
a FIT contract. It contended this result was unfair and
On July 12, 2012, Skypower applied to the Divisional Court for a
judicial review to declare that the OPA had a duty to process in
good faith Existing Applications in accordance with the FIT 1
rules. A three judge panel of the Divisional Court heard oral
arguments on August 24, 2012. A unanimous decision of the Court
dismissed Skypower's application.
The Court found the standard of review to be reasonableness. It
opined the MoE is given very broad discretion under the Electricity Act to direct the OPA in the
development of a FIT program. Therefore, the Court found it
necessary to be deferential to the MoE in exercising its discretion
in connection with directing the OPA to implement FIT. The Court
found no foundation Skypower's assertion that FIT 2 is
ultra vires of the Electricity Act. The
Court was of the view that Skypower must have been aware of two
basic facts. First, there was no guarantee that they would be
offered a FIT contract. Second, there exists no right to connect to
the electricity grid in Ontario. In support of this, the Court
found FIT 1 rules sections 10.01(a), 12.2(d), 12.2(c), and 12.2(g)
provided the OPA near unlimited discretion to run FIT.
The Court then considered the individual issues raised by
Skypower. First, it rejected the premise that FIT is a tender
process. Instead, the Court found FIT to be more than a strictly
commercial arrangement. It had a public policy aspect: the
provision of renewable energy to Ontario.
The Court then considered whether OPA representations and
timelines had given rise to a legitimate expectation. It found that
Skypower had no such legitimate expectation. The OPA
representations were not clear, unambiguous or unqualified.
Further, a time-of-the-essence provision in the rules did not give
substantive rights to Skypower. Even if Skypower did have a
legitimate expectation, it would have waived any entitlements it
had for relief because it did not seek a judicial review when it
became apparent that the OPA would not run an Economic Connection
Test within six months of September 24, 2009, as originally
represented by the OPA.
The Court found Skypower did not acquire any vested rights from
their participation in FIT. The Court found it difficult to see how
someone could gain vested rights from an unreviewed and unapproved
application. Essentially, Skypower did not have rights arising
under the application other than for the OPA to consider the
application. Consequently, the changes to FIT 1 were not
retroactive because they did not affect any rights. In summary, the
Court found that the MoE direction to the OPA to make changes to
FIT 1 was a reasonable use of its discretion.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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