Request for Reconsideration – REDA Section 42
In this decision, the AER considered George and Barba Percys’ (the “Percys”) request under section 42 of the Responsible Energy Development Act (“REDA”) for reconsideration of Alberta Energy and Utilities Board (“EUB” or “Board”) Decision 2005-079 and of Commercial Scheme Approval No. 10030A issued to Value Creation Inc. (“VCI”) for the Heartland Upgrader project (the “Heartland Upgrader Approval”).
The AER concluded that the Percys did not demonstrate extraordinary circumstances that gave rise to exceptional and compelling grounds for the AER to reconsider Decision 2005-079 or the subsequent approvals. The AER therefore denied the request for reconsideration.
As further summarized below, the AER denied the Percys request for reconsideration of EUB Decision 2005-079 based on its findings that:
(a) VCI’s predecessor did not make a commitment to purchase the Percys’ property;
(b) VCI’s predecessor had not breached any commitments made under the Voluntary Purchase and Resident Relocation Proposal (“VPRRP”), and
(c) the Percys would be afforded an opportunity to have their concerns considered by the AER hearing panel, given that the Percys would be participating in the upcoming hearing regarding the Heartland Upgrader.
Background
The AER explained that:
• The EUB issued Decision 2005-079 in which it approved BA Energy Inc.’s (“BA Energy”) application for approval to construct and operate the Heartland Upgrader in Strathcona County, near Fort Saskatchewan.
• The application had been scheduled for a hearing to consider the project’s impacts on residents and landowners’ in the area. Most of the landowners and residents participating in the proceeding were members of one of two intervener groups: The Northeast Strathcona County Residents and the Astotin Creek Residents’ Coalition (“ACRC”).
• The Percys owned and resided on a 30-acre land parcel located about 2 km from the project and they participated in the 2005 proceeding as a member of the ACRC.
• The Board cancelled the hearing after the two residents’ associations withdrew their objections based on the resolution set out in the VPRRP. The VPRRP documents were included in EUB Decision 2005-079 as Appendix 2.
• Following VCI’s acquisition of BA Energy, in 2014, VCI applied to the AER for an amendment to the Heartland Upgrader Approval.
• On March 6, 2015, the AER issued the Heartland Upgrader Approval, which designated VCI as the operator of the Heartland Upgrader. The amendment also approved changes to the project within the approved project area, which were expected to significantly reduce overall emissions.
• In June 2016, VCI applied for a further amendment of its approval. It proposed to remove one of the three approved development phases, and in its place to add a clean oil refining unit to further process product into high quality diesel, hydrotreated naphtha and a premium synthetic crude oil.
• The Percys filed a statement of concern in relation to this application. The AER directed the application to a hearing by AER hearing commissioners (Proceeding ID 356).
Test under Section 42 of the REDA
REDA section 42 provides the AER’s authority to reconsider a decision. It states:
42 The Regulator may, in its sole discretion, reconsider a decision made by it and may confirm, vary, suspend or revoke the decision.
With respect to the AER’s consideration of a request to reconsider a decision pursuant to REDA section 42, the AER found that:
(a) as indicated in the words of REDA section 42, it is at the AER’s sole discretion whether to reconsider one of its decisions;
(b) REDA section 42 does not provide an appeal mechanism, whereas other provisions of REDA are available for that purpose; and
(c) given the other specific appeal processes available under the REDA, and the need for finality and certainty in its decisions, the AER will only exercise its discretion to reconsider a decision in extraordinary circumstances and where it is satisfied that there are exceptional and compelling grounds to do so.
In this case, the AER found that the Percys did not demonstrate that extraordinary circumstances existed that provided exceptional and compelling reasons for the AER to reconsider Decision 2005-079 and the subsequent history of approvals issued in relation to the Heartland Upgrader.
Nature of Commitments under VPRRP
In their request for reconsideration, the Percys asserted that:
(a) BA Energy made a commitment, as part of the VPRRP, to ensure the Percys’ property would be purchased so that they could relocate outside the Industrial Heartland;
(b) they relied on this commitment when they withdrew their objection to the Heartland Upgrader application in 2005; and
(c) BA Energy (and by extension its successor, VCI) did not honour this commitment, and therefore the Board’s original decision to approve the Heartland Upgrader should be reconsidered, allegedly contemplated in the text of Appendix 2 of the decision report.
The AER concluded that these claims were not made out, based on its findings that:
(a) the VPRRP was a proposal for a framework/program that would facilitate the purchase of lands from area residents who wished to leave the Industrial Heartland and a mutual pledge to establish a process that treated departing landowners fairly and equitably;
(b) nothing in the VPRRP committed BA Energy (or anyone else) to buyout specific landowners (including the Percys) or to guarantee they were bought out; and
(c) BA Energy committed support for the initiative (which involved operators from several industries and the local municipality) to relocate residents. It did not make a commitment that all or any of the residents would be assured of that outcome.
The AER concluded that the Percys were mistaken in their characterization of both the intent of the VPRRP and of the commitment made by BA Energy to the ACRC.
BA Energy Complied with Commitments
The Percys also asserted that BA Energy failed to honour its commitment to support financially the VPRRP.
However, based on contradictory evidence submitted by VCI, the AER found that:
(a) between 2005 and 2007, BA Energy paid $300,000 to the Land Trust Society, which was established to administer the relocation program; and
(b) therefore, based on the AER’s interpretation of the commitment made by BA Energy as evidenced in Decision 2005-079, BA Energy complied with its commitment under the VPRRP.
Conclusion
For the reasons summarized above, the AER decided not to reconsider Decision 2005-079.
