Code of Conduct – Utility Definition
In this decision, the AUC considered whether to grant an application (the “Review Application”) filed by Alberta PowerLine Limited Partnership (“Alberta PowerLine”), requesting a review and variance of specific findings and a direction in AUC Decision 24277-D01-2019: Alberta PowerLine Limited Partnership, ATCO Group Inter-Affiliate Code of Conduct Compliance Plan (the “Decision”). The AUC granted the Review Application.
The AUC panel that authored the Decision will be referred to as the “Hearing Panel” and the AUC panel that considered the Review Application will be referred to as the “Review Panel.”
In the Review Application, Alberta PowerLine identified that energization of the Fort McMurray West 500 kV Transmission Line (the “FMACW Project”) occurred on March 28, 2019, and that three months prior to that date (on January 25, 2019), Alberta PowerLine filed an application requesting approval for its compliance plan in accordance with the ATCO Group Inter-Affiliate Code of Conduct (“ATCO Group Code”).
In the Decision, which was issued on March 26, 2019, the Hearing Panel approved the Alberta PowerLine Inter-Affiliate Code of Conduct Compliance Plan (the “APL Compliance Plan”) as filed, and directed Alberta PowerLine to prepare and file an annual compliance report for the 2018 calendar year (the “Direction”).
In the Review Application, Alberta PowerLine clarified that it did not seek a review of the AUC’s approval of the APL Compliance Plan or any aspect of the Decision other than “the Commission’s determination in paragraph 18 of the Decision apparently classifying APL [Alberta PowerLine] as a ‘utility’ in 2018, and the resulting direction that APL file an annual compliance report for the 2018 calendar year by virtue of such classification”.
Paragraph 18 of the Decision stated:
The Commission is of the view that a compliance plan should have been in place throughout the project, rather than just prior to the commencement of operations. Although there was no compliance plan in place, the Commission notes that the ATCO Electric inter-affiliate annual report for 2017, identified Alberta PowerLine as a utility affiliate and disclosed the information required by Section 7.6 of the ATCO Electric Inter-Affiliate Code of Conduct Compliance Plan. The Commission is of the view that the ATCO Group Inter-Affiliate Code of Conduct requires compliance for all affiliates regardless of whether a compliance plan is formally in place. The Commission expects that Alberta PowerLine has adhered to the principles and requirements outlined in the proposed Alberta PowerLine Inter-Affiliate Code of Conduct Compliance Plan throughout the construction and development of the project. To support its compliance, the Commission directs Alberta PowerLine to prepare and file an annual compliance report for the 2018 calendar year, in accordance with Section 7.6 of the proposed Alberta PowerLine Inter-Affiliate Code of Conduct Compliance Plan with the Commission no later than April 30, 2019.
AUC’s Review Process
The Review Panel outlined the AUC’s discretionary authority to review its own decisions, and the two-stage review process set out under AUC Rule 016. In the first stage, a review panel must decide whether there are grounds to review the original decision. If there are grounds to review the decision, it moves to the second stage of the review process where the AUC holds a hearing or other proceeding to decide whether to confirm, vary, or rescind the original decision.
The Review Panel determined that it would consider both steps of the Review Application in a single proceeding.
Grounds for Review
In the Review Application, Alberta PowerLine argued that the Hearing Panel erred in directing it to prepare and file an annual compliance report for 2018. Alberta PowerLine expressed its understanding that the Direction was based on the Hearing Panel’s determination that Alberta PowerLine should have had a compliance plan in place throughout the entire FMACW Project, including before construction was complete. This determination was, in turn, based on the Hearing Panel’s mistaken belief that Alberta PowerLine was identified as an “affiliate utility” in the ATCO Electric inter-affiliate annual report for 2017 (“ATCO Electric Compliance Report”).
Alberta PowerLine argued, in fact, ATCO Electric did not identify Alberta PowerLine as a “utility affiliate” in the ATCO Electric Compliance Report.
Alberta PowerLine further argued that the Hearing Panel’s characterization of Alberta PowerLine as a utility affiliate prior to the energization of the FMACW Project was inconsistent with the AUC’s express finding in Decision 20272-D01-2016. In that decision, the AUC considered how Alberta PowerLine should be characterized for the purposes of the ATCO Group Code and found:
The Commission considers that while Alberta PowerLine may become (or otherwise be deemed to become) a utility as defined in the ATCO Inter-Affiliate Code of Conduct upon completion of the WFMAC, it does not currently qualify as such because it does not fall under the definition of either a “public utility” as defined at Section 1(i) of the Public Utilities Act, or an “electric utility” as defined at Section 1(o) of the Electric Utilities Act. (emphasis by Alberta PowerLine)
Alberta PowerLine argued that it was clear from the AUC’s analysis of both the Public Utilities Act and the Electric Utilities Act leading to the above determination that Alberta PowerLine was a “non-utility affiliate” during the construction of the FMACW Project and became a “utility affiliate” on March 28, 2019, when the FMACW Project was complete, and the line was energized.
In its stage 2 submissions, Alberta PowerLine further outlined why it was not a “utility” prior to FMACW energization; its reliance on the AUC’s finding in Decision 20272-D01-2016; and its inability to comply with the Direction as a result of this reliance.
Review Panel Findings
In reviewing the record, the Review Panel made note of two aspects of the ATCO Group Code in particular. First, all ATCO utilities are required to comply with the code, as are all their affiliates to the extent they interact with the utilities, but it is the utility that is responsible for compliance by its affiliates.
Second, the Review Panel noted that it is the utility, not its affiliates, that is required to appoint a compliance officer, prepare a compliance plan, and file a compliance report. It is the utility’s compliance plan and compliance report that are required to address compliance by affiliates of the utility with respect to interactions with the utility.
The Review Panel found that given provisions of the ATCO Group Code, and most particularly the requirement for utilities, not affiliates, to prepare and file a compliance report, it was implicit in the Decision that the Hearing Panel concluded that Alberta PowerLine was a utility for the purpose of the ATCO Group Code in 2018: a period prior to the anticipated date of energization in March 2019.
The Review Panel found that Alberta PowerLine satisfied the first stage of review.
With regard to the second stage of review, the Review Panel was satisfied that a variance of paragraph 18 of the Decision was warranted. It accepted that it was reasonable for Alberta PowerLine to have relied on the statement in Decision 20272-D01-2016, which found that Alberta PowerLine would not be a utility until completion of the FMACW Project.
The Review Panel also accepted Alberta PowerLine’s assertion that as a consequence of its reasonable reliance on the AUC’s finding in Decision 20272-D01-2016, Alberta PowerLine was unable to fully comply with the Direction contained in paragraph 18 of the Decision and more specifically, the requirement to retroactively satisfy the informational requirements of the ATCO Group Code for the preparation of a 2018 compliance report.
The Review Panel was satisfied that the Decision ought to be varied by deleting the second bullet of paragraph 1 and deleting paragraph 18 of the Decision, which also had the effect of rescinding the Direction.