Power Perspectives 2022 - Energy Litigation

• Published date: 24 March 2022
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity, Utilities
• Law Firm: McCarthy Tétrault LLP
• Author: Canadian Energy Perspectives, Kyle McMillan, Reena Goyal, Samuel Lepage and Sam Rogers

ALBERTA

AltaLink Management Ltd. v. Alberta (Utilities Commission), 2021 ABCA 342

As discussed in more detail in our Aboriginal Law article, the Alberta Court of Appeal further clarified the nature of the public interest as it relates to decisions affecting First Nations in AltaLink Management Ltd. v. Alberta (Utilities Commission). In November 2018, the Alberta Utilities Commission (AUC) conditionally approved transfers of electrical transmission assets between AltaLink Management Ltd. and limited partnerships controlled by two Alberta First Nations. The AUC applied a "no harm" test and determined that transfers were in the public interest, though it did not accept arguments to justify passing on the anticipated increased costs (about C$60,000 annually) to ratepayers. The appellants had argued before the AUC that savings arose from the lines having been optimally routed through First Nations lands (i.e. when they were initially constructed) and that intangible benefits arising from the partnership with the First Nations provided further justification.

The Court varied the decision of the AUC, and allowed the incremental costs to be recovered from ratepayers. The majority declined to address the constitutional questions presented, but Feehan, JA in his concurring opinion gave guidance to the Commission that "the Commission must take all relevant factors into account in determining the public interest" (para 126), including the honour of the Crown and the objective of reconciliation.

The Office of the Utilities Consumer Advocate v. Alberta Utilities Commission, 2021 ABCA 336

COVID-19 has changed the nature of proceedings in many ways, most commonly by necessitating remote hearings, but in also in less obvious (and perhaps more important) ways, one of which was at issue in The Office of the Utilities Consumer Advocate v. Alberta Utilities Commission. In March of 2020, an intensive proceeding to set the fair return for electrical rates for 2021 was underway when it was temporarily suspended because of the rapidly evolving market conditions at that time, brought about by COVID-19. That proceeding was intensive, involving extensive evidence, including expert evidence. The intensive process was not resumed, and in October 2020, the AUC extended the status quo for a fair return into 2021. In December 2020, the AUC initiated the proceeding to determine the fair return for 2022, and invited comments on substantive and procedural issues for that proceeding from interested parties, including the Office of the Utilities Consumer Advocate (Applicant). Ultimately, in March 2021, the AUC decided to set the fair return for 2022 at the same level as for 2021 because of the unusually high flux and uncertainty in the markets.

The applicant requested the AUC review and vary the March 2021 decision, but that application was dismissed. The applicant then sought leave to appeal from the Court of Appeal on the questions of: (i) whether the AUC erred in law or jurisdiction by failing to undertake its statutory obligation to set a fair return for 2022; and (ii) whether the AUC erred in law by breaching its duty of procedural fairness in setting a fair return for 2022. The Court considered the test for permission to appeal, and concluded that although the points on appeal were significant to the practice and the proceeding itself, they could ultimately not succeed. On the first question, the Court concluded that "[t]he Commission had discretion to employ an appropriate method and procedure given the COVID-19 pandemic. It was not required to utilize the intensive process it had used at times past; it could adopt an alternative approach, particularly in light of the COVID-19 pandemic" (at para 17), and that using that alternative approach could not amount to an error of law. On the procedural fairness question, the Court likewise noted the unprecedented conditions presented by COVID-19, and held that "the [Applicant] was not denied any procedural rights nor was it treated any differently than other parties in the proceedings" (at para 31). Leave to appeal was thus denied.

Alberta (Attorney General) v. British Columbia (Attorney General), 2021 FCA 84

Alberta (Attorney General) v. British Columbia (Attorney General) is another chapter in the years-long dispute between the governments of Alberta and British Columbia (BC)...