Rescinding of Affiliate Designation
In this decision, the AUC considered whether to approve an application brought by AltaGas Utilities Inc. to rescind a deemed affiliate designation between AltaGas Utilities Inc. and AltaGas Ltd. and its subsidiaries. This would involve minor changes to AltaGas Utilities Inc.’s Inter-Affiliate Code of Conduct and associated Inter-Affiliate Code of Conduct Compliance Plan. The AUC found that AltaGas Utilities Inc. had demonstrated that AltaGas Ltd. and its subsidiaries no longer had any ownership interest or significant influence over AltaGas Utilities Inc. For this reason, the AUC approved AltaGas Utilities Inc.’s application as filed.
Application Background
On January 5, 2005, when AltaGas Utilities Inc’s. Inter-Affiliate Code of Conduct was approved by the Alberta Energy and Utilities Board, AltaGas Ltd., and AltaGas Utilities Inc. were subsidiaries under a common parent, AltaGas Income Trust (“AIT”). Between 2005 and 2020, AltaGas Ltd. and AltaGas Utilities Inc. were parties to multiple corporate restructuring transactions, including the latest divestiture of AltaGas Utilities Inc. and its parent company, AltaGas Canada Inc. (“ACI”), to PSPIB Cycle Investments Inc. Following PSPIB Cycle Investments Inc.’s acquisition of ACI, neither AltaGas Ltd. nor its subsidiaries had any ownership interest in AltaGas Utilities Inc. or its parent companies, and all transactions between AltaGas Utilities Inc. and AltaGas Ltd. were completed at arm’s length. AltaGas Utilities Inc. stated that the deemed affiliate designation between itself and AltaGas Ltd. and its subsidiaries was no longer necessary and requested that it be rescinded.
AUC Findings
The AUC determined that AltaGas Utilities Inc. and AltaGas Ltd. and its subsidiaries did not meet the definition of “affiliates” as defined in section 2 of the Business Corporations Act. The AUC also agreed with AltaGas Utilities Inc.’s assertion that AltaGas Ltd. and AltaGas Utilities Inc. no longer met the definition of an affiliate as described in section 2.1b)i) to iv) of AltaGas Utilities Inc.’s Inter-Affiliate Code of Conduct.
Further, the AUC found that, since AltaGas Ltd. reassigned its administrative agreement with AltaGas Utilities Inc.to ACI during a 2018 restructuring transaction, AltaGas Ltd. was no longer acting as an agent of AltaGas Utilities Inc. Therefore, the AUC confirmed that section 2.1(b)(v) of AltaGas Utilities Inc.’s Inter-Affiliate Code of Conduct would not apply.
Based on the above, the AUC agreed with AltaGas Utilities Inc. that the deemed affiliate designation between AltaGas Utilities Inc. and AltaGas Ltd. and its subsidiaries was no longer applicable.
