Jurisdiction – Electricity
Application
The Alberta Electric System Operator (“AESO”) requested guidance regarding the treatment of a refund associated with historical line losses as directed in AUC Decision 790-D06-2017 (the “Module C Decision”).
Decision
The AUC determined that the matter falls outside of its jurisdiction. The AUC consequently dismissed the AESO’s request for guidance on the refund treatment.
Applicable Legislation
Alberta Utilities Commission Act, SA 2007, c A-37.2 – s 8.
Business Corporations Act, RSA 2000, c B-9 – s 229.
Electric Utilities Act, SA 2003, c E-5.1 – ss 17(e), 20, 25, 26, 30(4), 119(4), and 122.
Transmission Regulation, Alta Reg 86/2007 – ss 31, 34.
Unclaimed Personal Property and Vested Property Act, SA 2007, c U-1.5 – s 15(a).
Pertinent Issues
The Calgary Energy Centre (“CEC”) is a natural-gas-fuelled generation facility on the northern boundary of the city of Calgary. Calpine Power, LP (“Calpine”) was the holder of the supply transmission service contracts for the CEC for the period in question in 2006. The AESO requested guidance on the treatment of a line loss refund owed to the CEC of $8,343,537.16 from February 1, 2006, to December 31, 2006.
The AESO requested AUC guidance on three questions (the “Reference Questions”) related to the refund to ENMAX Energy Corporation (“ENMAX”) as Calpine paid the original invoices:
(a) confirmation that the AESO’s approach, as outlined in the Module C Settlement Procedure is consistent with the AUC’s intent in the Module C Decision and applicable laws such that the refund vests with the Crown pursuant to Section 229 of the Business Corporations Act and Subsection 15(a) of the Unclaimed Personal Property and Vested Property Act (“UPPVPA”); or
(b) if the AESO’s approach, as described in the Module C Settlement Procedure, is not aligned with the AUC’s intent, should the refund be distributed through the Rider E process among all market participants paying charges or receiving refunds for the historical period through the Module C settlement process; or
(c) how should the refund otherwise be dealt with in accordance with the Module C Decision and applicable laws?
The AUC found that the AESO would have been aware of the assignment from Calpine to ENMAX, as permitted under the AESO tariff, concerning CEC generation assets. The AESO would have been aware because it was a signatory to the assumption assignment and novation agreement.
The AUC agreed with the findings in the Module C Decision that market participants can “contractually shift liabilities for past unlawful rates they were charged.” It also found that such transactions are outside the AUC’s purview.
The AUC found that the AESO’s settlement procedure describes how to deal with unclaimed refunds, including relying on the provisions of the UPPVPA. The AESO sought guidance on a refund that ENMAX claimed through an ongoing legal process outside of the AESO’s settlement procedure, in an application to the Court of Queen’s Bench of Alberta.
The AUC found that the Module C Decision clarified that individual contracts or agreements fall outside the statutory scheme and the AUC’s purview. The AUC further found that providing a comprehensive response to the Reference Questions would effectively require the AUC to modify or vary the Module C Decision, potentially leading to unintended consequences.
