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Request for Regulatory Appeal by TransAlta Corporation Alberta Energy Regulator Subsurface Order No. 6 Panel Subsurface Order No. 6 (Request for Regulatory Appeal No. 1922192)

Link to Decision Summarized

Regulatory Appeal – Eligible Person – Appealable Decision

In this decision, the AER considered the TransAlta Corporation (“TransAlta”) request under section 38 of the Responsible Energy Development Act (“REDA”) for a regulatory appeal of the AER’s issuance of Subsurface Order No. 6 (“SSO6”) on May 27, 2019. The AER found that TransAlta was not an “eligible person”, and dismissed the request.

Statutory framework

The applicable provision of REDA regarding regulatory appeals states:

38(1) An eligible person may request a regulatory appeal of an appealable decision by filing a request for regulatory appeal with the Regulator in accordance with the rules. [emphasis added]

The term “eligible person” is defined in section 36(b)(ii) of REDA to include:

a person who is directly and adversely affected by a decision [made under an energy resource enactment]…[emphasis added].

The applicable definition for “appealable decision” is set out in section 36(a)(iv) of REDA:

(a) “appealable decision” means

(iv) a decision of the Regulator that was made under an energy resource enactment, if that decision was made without a hearing.


TransAlta is the owner and operator of the Brazeau Hydroelectric Dam, and the related infrastructure, which includes earthen power canal dykes, a main dam, a spillway, and a powerhouse (the “Brazeau Infrastructure”).

The Brazeau Infrastructure is located within approximately 0 km to 7 km of the surface and/or bottom hole locations of proposed wells that form the subject of applications for horizontal wells filed in 2013 and updated in 2019 (the “Applications”).

TransAlta submitted Statements of Concern about each of the Applications. On January 4, 2014, it was recommended that the Applications proceed to a hearing (Proceeding ID 379) (the “Hearing”). After a lengthy hearing-commissioner-led alternative dispute resolution, a hearing panel was assigned in January 2016 to conduct the Hearing into the Applications.

On May 27, 2019, SSO6 was issued by the AER, which established new monitoring, reporting and setback requirements in an effort to manage the potential hazard of induced seismicity from hydraulic fracturing near the Brazeau Reservoir. SSO6 allows hydraulic fracturing in formations above the Duvernay Formation to within 3 km of the Brazeau Infrastructure.

TransAlta filed a Request for Regulatory Appeal (the “Request”) on June 25, 2019, regarding SSO6.

Reasons for Decision

The AER found that TransAlta was not an “eligible person” under section 38 of REDA. As there was no direct connection between the issuance of SS06 and the potential impacts alleged, TransAlta was not directly affected by SS06. The AER also held that SS06 did not “adversely” affect TransAlta. SS06 was not specific to TransAlta, nor was TransAlta required to do anything concerning SS06. While SS06 used geographic boundaries in relation to the Brazeau Infrastructure, the order applied to anyone drilling and operating a well within the geographic areas outlined in Appendices A, B and C.

The AER noted that it issued SS06 in response to concerns raised by TransAlta. The AER further noted that placing minimum requirements regarding hydraulic fracturing operations near the Brazeau Infrastructure appeared to be a positive measure imposed by the AER in response to TransAlta’s concerns.

The AER noted that TransAlta filed Statements of Concern (“SOCs”) regarding the Applications. A hearing was granted regarding those SOCs. Rule 31(3) of the AER Rules of Practice states that a “regulatory appeal shall not include any matters already adequately dealt with through another hearing, regulatory appeal or review under any enactment.” As a Notice of Hearing had been issued in Proceeding ID 379, allowing a regulatory appeal to proceed on the issues outlined in TransAlta’s request would result in a breach of this rule.

The AER dismissed the request for a regulatory appeal.

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