The Ontario Divisional Court recently ruled in Advocacy
Centre for Tenants-Ontario v. Ontario Energy Board that
the Ontario Energy Board (OEB) has the authority to implement a
low-income affordability plan as part of its rate-setting
The issue arose in an application to the OEB for approval a
utility's gas distribution rates on a cost of service
basis. One of the intervenors, the Low Income Energy Network
("LIEN"), requested that OEB include on the issues
list whether the utility's residential rates should
include a rate affordability assistance program for low-income
consumers. A majority of the OEB rejected the issue on the
basis that it was outside of the OEB's
LIEN appealed and the Divisional Court set aside the
OEB's decision. Two of the three judges on the panel,
Justices Kiteley and Cumming, held the OEB could consider
income levels in pricing to achieve the delivery of affordable
energy to low-income consumers. The majority grounded its
decision in the OEB's broad authority under section 36
of Ontario Energy Board Act to fix "just and
reasonable rates" by adopting "any method or
technique it considers appropriate". In their view, as
long as the global amount of return to the utility is
achievable, then the setting of rates to generate the required
return is matter within the OEB's discretion. They went
on to note that taking into consideration the ability to pay in
rate-setting could also be used by the OEB to further its
statutory objective of protecting "the interests of
consumers with respect to prices". That said, Justices
Kiteley and Cumming were careful to add that their decision was
limited to the jurisdictional issue and they were not implying
any preferred course of action in rate-setting by the OEB.
The third member of the panel, Justice Swinton, dissented.
In her opinion, section 36 could not be viewed as conferring
unlimited discretion on OEB; rather that authority was confined
by the statutory regime and the longstanding principle that
customers receiving the same service must be treated equally.
Further, Justice Swinton noted the ability to order a rate
affordability plan would be a fundamental departure from the
OEB's traditional role and require it to assume a
significant new role as a regulator of social policy. In
support of this proposition, Justice Swinton cited cases from a
number of other jurisdictions in which regulators were denied
the authority to consider ability to pay in rate-setting. On
these grounds, she concluded that the Legislature could not
have intended to authorize the OEB to discriminate among
customers unless it used specific words to express that
While the decision leaves the OEB with the authority to
decide how far to go in exercising this "unwanted"
power, it could open up rate proceedings to a range of issues
that fall outside of the traditional rate case. The OEB may
feel restrained when determining whether to exclude issues
raised by intervenors from the issues list. This in turn could
result in longer proceedings to hear evidence on all of the
issues included on the issues list.
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