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Alberta Federation of Rural Electrification Associations – Decision on Preliminary Question -Application for Review of Decision 24762-D01-2019, AUC Decision 25375-D01-2020

Link to Decision Summarized

Cost Awards – Review and Variance

In this decision, the AUC considered an application filed by the Alberta Federation of Rural Electrification Associations (“AFREA”) requesting a review and variance of specific findings made in Decision 24762-D01-2019 (the “Decision”). The Decision addressed applications from seven parties for approval and payment of their respective costs to participate in Proceeding 23757, which was convened by the AUC to consider an application from the Alberta Electric System Operator (“AESO”) for approval of the first set of Independent System Operator rules to establish and operate a capacity market for electrical generation in Alberta. The AFREA review application concerned findings in the Decision disallowing costs claimed for the services provided by its legal counsel and consultants in Proceeding 23757. The AUC denied the review application.

In this decision, the member of the AUC panel who authored the Decision was referred to as the “Hearing Panel” and the member of the AUC panel considering the review application was referred to as the “Review Panel.”


The AUC commenced Proceeding 23757 by a Notice of Commission Initiated Proceeding dated July 23, 2018. In that notice, the AUC suspended the operation of the prohibition on costs recovery set out in AUC Bulletin 2008-17 with respect to Proceeding 23757. The notice further indicated that eligibility for costs recovery would be determined by the AUC and that the AUC would direct the AESO to pay approved costs.

On July 29, 2019, the AUC closed Proceeding 23757 following a request from the AESO to withdraw its application. On August 7, 2019, AFREA submitted its costs claim application for approval and payment of its costs of participating in Proceeding 23757, and the AUC assigned Proceeding 24762 to the costs proceeding.

The Hearing Panel issued the Decision on December 18, 2019. In the Decision, the Hearing Panel approved AFREA’s claim for recovery of costs in the total amount of $252,797.83, representing a disallowance of approximately 55 percent of its total claimed costs of $557,839.97.

In the Decision, the Hearing Panel determined that while AFREA generally acted responsibly and contributed to the AUC’s understanding of the relevant issues, it was unable to approve the full amount of the costs claimed in respect of the services performed by Main Street Law, Bema Enterprises Ltd. (“Bema”), and TENEO Consulting Inc. (“TENEO”), and for the disbursements claimed by AFREA.

AUC’s Review Process

The AUC’s authority to review its own decisions is discretionary and is found in Section 10 of the Alberta Utilities Commission Act. That act authorizes the AUC to make rules governing its review process and the AUC established Rule 016 under that authority. Rule 016 sets out the process for considering an application for review.

The review process has two stages. In the first stage, a review panel must decide whether there are grounds to review the original decision. This is sometimes referred to as the “preliminary question.” If the review panel decides that there are grounds to review the decision, the AUC 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. In this decision, the Review Panel decided the preliminary question.

AFREA’s Review and Variance Application

In its review application, AFREA advanced several general arguments. AFREA discussed the unique circumstances surrounding Proceeding 23757, including the complexity of the proceeding and its materiality to AFREA, the number of changes to the process schedule, and the fact that the AESO’s application was eventually withdrawn. The relief requested by AFREA was for the AUC to vary the Decision and approve 100 percent of the applied-for costs claimed by AFREA.

Review Panel Findings

Main Street Law

The Review Panel noted that in exercising its discretion to award costs, the AUC is guided by the factors set out in Section 11 of Rule 022. These factors include whether the costs claimed are reasonable and directly and necessarily related to the original proceeding, and whether the participant acted responsibly and contributed to a better understanding of the issues before the AUC.

The Hearing Panel reviewed Ms. Gibbons’ timesheets and made a determination that the amount of time allocated towards summarization and reporting was excessive and did not directly contribute to a better understanding of the issues before the AUC. The Review Panel found that this was a discretionary decision that, on its face or on a balance of probabilities, was not unreasonable.

The Hearing Panel determined that the total hours claimed by Main Street Law for argument was excessive given that AFREA’s argument and reply argument discussed a relatively limited number of technical issues, and AFREA’s position on these issues did not vary drastically over the course of the proceeding. The Review Panel found that the Hearing Panel’s assessment of Main Street Law’s time spent on argument, relative to the number and complexity of issues it addressed, is a reasonable exercise of discretion and is entitled to deference.

Bema Enterprises Ltd.

The Review Panel considered that the Hearing Panel’s assessment of Bema’s hours was a finding entitled to considerable deference. The review application is not an opportunity for AFREA to provide additional justification in support of its costs claim, including further explanation of its activities, that was not provided in the first instance.

The Hearing Panel applied a general 45 percent reduction to Bema’s remaining fees in respect of time allocated to several activities it identified as unreasonable, duplicative, or excessive.

The Hearing Panel observed that Bema consultants claimed a combined 70 hours of pre-hearing work to review materials from the AESO website, and an additional 75 hours to review the AESO’s application, notwithstanding that much of the content between these sources overlapped. The Hearing Panel further noted that other parties in Proceeding 23757 who retained three or more consultants and submitted evidence on a similar number of issues as Bema, billed far fewer hours for the same review.

AFREA submitted that this finding represents an improper benchmarking exercise and results in an arbitrary comparison between parties. The Review Panel considered that improper benchmarking arises where a Hearing Panel relies on a direct comparison of parties’ total hours as its primary tool for assessing costs, without exercising its discretion to consider relevant factors such as the nature of the interests represented by the claimant and the particular activities performed. The AUC has previously determined that where it is reviewing similar tasks on related issues, comparisons between parties can be made to assess the relative reasonableness of the costs claims.

In this case, the Hearing Panel arrived at a general reduction, in part, by determining that the time spent by Bema consultants reviewing the AESO application and website was unreasonable given the reproduction of content between these sources. In making this determination, the Hearing Panel referenced the time recorded on the same activities by other interveners whose scope and depth of intervention in Proceeding 23757 was similar to AFREA’s. The Review Panel did not consider that this constitutes a benchmarking exercise.

The Review Panel also disagreed that the Hearing Panel erred in determining that Bema consultants performed duplicative work on evidence and rebuttal evidence, or that that the Hearing Panel erroneously overestimated the time spent by Bema consultants on cross-examination.

TENEO Consulting Inc.

AFREA submitted that the Hearing Panel erred in disallowing the entirety of the costs claimed for TENEO Consulting.

The Review Panel disagreed with AFREA’s assertion that the AUC “indicated approval of cost recovery for TENEO Inc. as a general consultant to AFREA” or otherwise failed to convey the prospect that costs for TENEO might be disallowed. Rather, the Review Panel considered that the Hearing Panel properly followed the process established for eligible claimants in Proceeding 23757 and made an assessment of costs after the proceeding based on the criteria in Rule 022.

In the Decision, the Hearing Panel found that Ms. Monsma’s primary role was to ensure AFREA’s values were represented in Proceeding 23757 and that she was providing evidence from the perspective of her client, rather than serving as an independent expert. In arriving at its findings, the Hearing Panel referred to the evidence before it, including an information response in which AFREA confirmed that TENEO “does not have the expertise in economics or the technical engineering aspects of the electricity industry.” The Hearing Panel made a discretionary determination that AFREA had not demonstrated the need for the services provided by TENEO, or how those services contributed to a better understanding of the issues before the AUC.

The Review Panel noted that AFREA’s review application contained submissions in support of TENEO’s services, beyond what was provided in its costs application. It is not the role of a Review Panel to reassess discretionary findings of a Hearing Panel in light of new submissions that were not provided at the time of the original Decision.

Further Submissions in Support of the Review Application

AFREA advanced several general arguments in support of its review application, including that the Hearing Panel did not properly take into consideration the process changes approved by the AUC, the complexity of Proceeding 23757, the materiality of the issues to AFREA, and the eventual withdrawal of the AESO’s application.

The Review Panel did not consider that any of the above arguments were indicative of an error of fact, law or jurisdiction with respect to the Decision. There was no evidence to suggest that the Hearing Panel failed to appreciate the factors identified by AFREA.


The Review Panel found that AFREA did not meet the requirements for a review of Decision 24762-D01-2019 and the application for review was dismissed.

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