Error of Fact
In this decision, the AUC denied the application by Sage Water Services Corp. (“Sage Water”) for review and variance of findings in AUC Decision 24797-D01-2020 (the “Decision”). Sage Water had not met the requirements for a review of the Decision.
Background
In the Decision, the AUC established interim water service rates for Sage Water for the first time. The panel who authored the Decision was referred to as the “Hearing Panel”, and the members of the AUC panel considering the review application were referred to as the “Review Panel.”
The Review Panel addressed the first stage of the two-step review process in which it decided if there were grounds to review the Decision.
Issues
The grounds for Sage Water’s review application were errors of fact. Specifically, Sage Water submitted that the Hearing Panel erred:
(a) in finding that Sage Water supported setting existing rates as interim rates;
(b) in finding when certain ratepayers had knowledge that rates were subject to change; and
(c) in failing to consider the small size of the utility, quarterly billing cycles, and administrative burden resulting from a November 19, 2020, effective date.
Review Panel Findings
Section 4(d)(i) Grounds – Errors of Fact, Law or Jurisdiction (i) Whether the Hearing Panel Erred in Finding that Sage Water Supported Setting Existing Rates as Interim Rates
Sage Water submitted that, contrary to what the Hearing Panel had stated in the Decision, Sage Water did not support interim rates as existing rates. Rather, Sage Water supported the AUC approving its higher proposed rates as interim rates. It submitted that in this finding, the Hearing Panel had made an error of fact.
Sage Water submitted that setting existing rates as interim rates would mean that Sage Water would continue to operate at a loss, estimated at $22,170 for fiscal year 2020.
Although the Review Panel found that Sage Water had demonstrated on a balance of probabilities that the Hearing Panel had made a factual error, it found that Sage Water did not show that this mistake by the Hearing Panel could have led the AUC to materially vary or rescind the Decision. The Review Panel explained that this was because the interim application raised issues that required a full hearing before the AUC could set just and reasonable rates and because an interim rate order allowed all parties to preserve rates at an approved level while the AUC conducted the hearing. The interim rate order was subject to adjustment once final rates had been determined. Sage Water’s request for review on this ground was denied.
Section 4(d)(i) Grounds – Errors of Fact, Law or Jurisdiction (ii) Whether the Hearing Panel Erred in Finding when Certain Ratepayers Had Knowledge that Rates Were Subject to Change
In the Decision, the Hearing Panel approved interim rates effective the date the Decision was issued. The Hearing Panel reviewed the rule against retroactive ratemaking and noted that there are limited exceptions, one being the knowledge exception.
The Review Panel determined that, on its face or on a balance of probabilities, the Hearing Panel’s assessment of the effective date was not unreasonable. Sage Water failed to demonstrate that an error of fact existed on this ground that could lead the AUC to materially vary or rescind the Decision.
In the proceeding, the Hearing Panel had sought submissions on the effective date of interim rates. Sage Water had had an opportunity to provide its submissions regarding when notice was provided to the Prince of Peace Condominium Village (“Village”) at that time. The Review Panel noted that the review process was not intended to provide a second opportunity for parties to express concerns or views that they chose not to raise in the original proceeding.
The Review Panel found that if the Hearing Panel had made an error of fact in identifying the earliest date that the ratepayers residing in the Village had had knowledge, this error could not have led the Review Panel to materially change or rescind the Decision. The Review Panel explained that this was because it was not until October 16, 2020, that the Hearing Panel had confirmed that Sage Water was a public utility under the Public Utilities Act and therefore subject to the AUC’s jurisdiction. AUC-approved rates could not have become effective any earlier. Sage Water’s request for review on this ground was denied.
Section 4(d)(i) Grounds – Errors of Fact, Law or Jurisdiction (iii) Whether the Hearing Panel Failed to Consider the Small Size of the Utility, Quarterly Billing Cycles and Administrative Burden Resulting from a November 19, 2020 Effective Date.
The Review Panel determined that there was no evidence to suggest that the Hearing Panel had disregarded the size of Sage Water or its billing cycle. The Review Panel found that this argument was not disregarded but was not given the weight desired by Sage Water.
The Review Panel found that the balance of arguments advanced by Sage Water regarding the administrative burden, hardship and unfairness resulting from the November 19, 2020 effective date had not been brought in response to the Hearing Panel’s request for submissions on the effective date and did not show a reviewable error providing grounds for review. Sage Water’s request for review on this ground was denied.
Decision
In answering the preliminary question, as the first of the two-step review process, the Review Panel found that Sage Water had not met the requirements for a review of the Decision, and the application for review was dismissed.
