Review and Variance, Legal Costs
In this decision, an AUC review panel considered whether to grant an application (the “Application”) filed by ATCO Electric Ltd. (“ATCO”) requesting a review and variance (“R & V”) of specific findings in AUC Decision 22393-D02-2019 (the “Decision”). The Decision addressed an application from ATCO requesting approval of 18 transmission capital projects that collectively comprise the Hanna Region Transmission Development (“HRTD”) program, which was considered in Proceeding 22393. The review application requested reconsideration of the AUC’s determination to reduce ATCO’s legal costs related to the HRTD program.
The review panel denied the review Application.
In the Decision, the hearing panel held that ATCO had failed to meet its burden to establish that certain of the legal costs invoiced by Bennett Jones LLP to ATCO and charged to the HRTD program were just and reasonable.
The hearing panel made a number of findings which were the subject of the R & V application. It noted that ATCO chose to outsource legal services rather than use internal legal resources. It also appeared to the hearing panel that ATCO used external legal counsel to perform tasks that could and should have been performed by a project manager. The hearing panel also noted instances of external counsel giving advice on issues that should have been managed by ATCO human resources personnel.
Further, the hearing panel found that legal fees charged at the partner level by Bennet Jones in relation to the HRTD program exceeded peer rates by approximately 10 per cent. Given ATCO’s admitted long-standing relationship with Bennett Jones and the volume of work that ATCO directed to Bennett Jones, the hearing panel expected that ATCO demand and receive an overall percentage reduction to all of its fees during the entire period during which work was being performed on this project.
Ultimately, the hearing panel directed ATCO to remove certain charges and decrease overall invoices.
The AUC review process and ATCO grounds for review
The AUC review panel briefly outlined the basis of its authority to review AUC decisions as set out in section 10 of the Alberta Utilities Commission Act, and noted that AUC Rule 016 sets out the process for considering an application for review.
ATCO’s grounds for review under Rule 016 were set out, and the review panel examined each of these grounds in turn.
Review Panel findings
The review panel found that ATCO was provided with reasonable notice of the concerns regarding the legal costs that ATCO sought to have charged to the HRTD program. Through the process, ATCO was also given a reasonable opportunity to address the prudence of those legal costs and to respond to the evidence and argument of the other party to the proceeding with respect to those costs. The review panel found no error of fact, law or jurisdiction, and denied the request for a review on this ground.
Previously unavailable facts
The review panel noted that under the section of Rule 016 that deals with previously unavailable facts, the applicant must satisfy the review panel of the existence of previously unavailable facts material to the decision that existed prior to the issuance of the decision, but that could not have been discovered at the time by exercising reasonable diligence.
The review panel found that ATCO’s assertion that the concerns raised by the AUC and the Consumers’ Coalition of Alberta (“CCA”) in the original proceeding did not relate to specific legal entries and was not supported by the record of that proceeding.The request for review on this ground was denied.
The review panel was not persuaded that there was an “increased standard of proof” or that the AUC’s concerns were not known to ATCO. The review panel further noted that the fact that ATCO was unsuccessful meeting its onus to demonstrate the prudence of certain legal costs related to the HRTD program is not a changed circumstance material to the Decision warranting review. ATCO’s request for a review on this ground was therefore denied.
The 10 per cent reduction to associate level fees
The review panel found ATCO failed to demonstrate that the hearing panel disregarded ATCO’s evidence or arguments related to the 10 per cent reduction to fees. The hearing panel was aware of ATCO’s evidence and arguments. It weighed the evidence, considered the arguments and ultimately reached a decision directing the general 10 per cent reduction as a result of the long-standing relationship between the two parties, and the volume of work being conducted. That ATCO was dissatisfied with the weight accorded to the evidence by the hearing panel and with the outcome more generally was not grounds for review.
The Application was dismissed.