In three recent rate proceedings, the Ontario Energy Board (OEB)
has declined to approve Settlement Proposals. This is notable
because, ordinarily, the OEB has approved jointly-filed Settlement
Proposals that are endorsed by all parties to a proceeding.
In two instances, the OEB's reason for declining to approve
the Settlement Proposal related to a practice and procedure matter,
rather than to the substance of the settlement. In each of these
Decisions (Waterloo North Hydro and
Guelph Hydro ), the OEB was not prepared to accept the
parties' statement of the rules of privilege that applied to
the Settlement Conference. The OEB was concerned that the proposed
wording was potentially different from the confidentiality
requirements that are imposed on Settlement Conference participants
by the OEB's Practice Direction on Settlement Conferences.
The OEB indicated in each case that different wording would be
acceptable, so long as that different wording addressed the concept
of "confidentiality," which the OEB noted has a broader
meaning than "privilege." In response to the Board's
decisions, the Settlement Proposals in each case were amended,
refiled and accepted (see here and here).
In the third instance (Hydro Ottawa's Custom Incentive
Regulation Rate (IR) Application), the OEB's main reason for
declining to approve the Settlement Proposal was because of
concerns around a substantive item of agreement. In that case, the
parties had filed a Settlement Proposal that included a complete
settlement of all items in the proceeding. Board Staff filed a
submission in support of the Settlement Proposal. In its
Decision, the OEB indicated that it was not prepared to accept
the settlement in relation to Hydro Ottawa's forecast costs to
acquire new land and construct new administrations and operations
buildings. The OEB indicated that there was insufficient evidence
to support the entire amount of the agreed-upon costs. The OEB
stated that it would accept a settlement that included a lower cost
for the land and buildings, indicating that the maximum recoverable
amount during the IR term would be around 72% of the amount
agreed-upon in the Settlement Proposal. In response to the
Board's Decision, the parties have filed an updated Settlement Proposal which aims to address the
While the recent OEB decisions declining to approve as-filed
Settlement Proposals are anomalous, these decisions might be a
signal that OEB approval of Settlement Proposals is less assured
than in the past. These types of decisions could be a response to
the concerns raised in the Auditor General's 2014 Annual Report
(on the topic of Natural Gas Regulation) about
whether the Board is adequately reviewing Settlement Proposals from
a public interest perspective. To the extent that any pattern
emerges in respect of items that the Board is reluctant to approve
in Settlement Proposals, it will be incumbent on parties to ensure
that later Settlement Proposals contain sufficient detail and
justification to allow the OEB to overcome that reluctance.
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.
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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