Article by Paul Jeffrey, ©2006, Blake, Cassels & Graydon LLP
This article was originally published in Blakes Bulletin on Energy - March 2006
On November 28, 2005, the Alberta Department of Energy (DOE) circulated a document to Alberta stakeholders entitled Role and Mandate Refinements for Alberta Electric Industry Implementing Agencies (the Paper). The Paper describes changes the DOE intends to make to the mandates of implementing agencies, including the Independent System Operator (ISO), the Market Surveillance Administrator, the Balancing Pool and the Alberta Energy and Utilities Board (EUB). The proposed refinements are to be implemented in future regulations.
Early in 2006, the EUB issued a severe reproof of the DOE regarding the Paper, expressing "deep disappointment" the EUB was not afforded an opportunity to provide input before the Paper was circulated to stakeholders. The DOE’s consultation process engaged some parties prior to the Paper’s release, but evidently not its own agencies charged with implementing the legislative regime. It appears the DOE’s consultation fell short of the "high standard of effective consultation" the DOE itself expects from its various implementing agencies.
At the heart of the EUB’s concern are the Paper’s criticism of EUB rate of return determinations, its criticism of EUB processing timelines for GTA applications and its expectation that the EUB will accord a "rebuttable presumption" in favour of the ISO on ISO needs applications.
The EUB replied that if the DOE does not like the rate of return awards it can prescribe an enhancement. It does not go on to say, but would have been correct if it did, that under the current statutory regime the DOE cannot tell the EUB what the awards should be. The province’s utilities would echo the DOE’s position on the inadequacy of regulated equity returns given the risks they face and their challenges in attracting new capital, but the DOE cannot deliver higher returns to utilities by improperly influencing the EUB. If anything, the DOE’s pronouncements may cause the EUB to lean towards lower returns to avoid appearance of marching to the DOE’s dictates, in the event its generic return ruling is re-opened.
The EUB believes the DOE’s application processing timelines and rebuttable presumption will unduly fetter its ability to conduct meaningful reviews. If the DOE insists on these changes, the EUB stated, then the DOE should just eliminate the EUB’s role. And the principles of natural justice that are foundational to the Canadian laws governing tribunal practice would support the EUB’s stance. The EUB must accord a meaningful opportunity to affected interests to learn of applications affecting them, a meaningful opportunity to be heard in respect of those applications, and an audience by a decision maker that is not subject to external influence. Any such attempt to emasculate by regulation the EUB’s independence or processing discretion is ripe for challenge.
The Paper was circulated for information. The DOE did not invite comments on the grounds that the content would be included in forthcoming regulations and stakeholders would be invited then to comment. It remains to be seen whether the DOE will accede to any of the EUB’s cautions in the regulations being developed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
