Costs Awards – Review and Variance
In this decision, the AUC considered an application (the “Review Application”) filed by the Consumers’ Coalition of Alberta (“CCA”) requesting a review and variance of specific findings in AUC Decision 24475-D01-2019 (the “Costs Decision”). The Costs Decision addressed an application from the CCA for approval of its costs for participation in the ATCO Electric Hanna Regional Transmission Development (“HRTD”) Deferral Account application (Proceeding 22393). The CCA’s review application requested a reconsideration of the AUC’s determination to reduce the CCA’s consultant participation costs claim by 50 percent.
The AUC decided to allow the Review Application in part and varied the direction in the Costs Decision to reduce the CCA’s consultant participation costs by 50 percent to a cost reduction of 25 percent.
In this decision, the AUC member(s) who authored the Costs Decision are referred to as the “Hearing Panel” and the AUC member(s) who considered the review application are referred to as the “Review Panel.” The AUC members who authored Decision 22393-D02-2019 are referred to as the “HRTD AUC panel”.
Background
On June 6, 2019, the AUC issued Decision 22393-D02-20194. On April 5, 2019, the CCA submitted its costs claim application for approval and payment of its costs of participation in Proceeding 22393 and the AUC assigned Proceeding 24475 to the Costs Proceeding.
The Hearing Panel issued the Costs Decision on November 25, 2019. The total costs claimed by the CCA were $773,002.50, and the Hearing Panel approved cost recovery of $407,321.54. The approved costs represented a 50 percent reduction of the costs claimed by the CCA’s consultant, Bema Enterprises Ltd. (“Bema”), and a 15 percent reduction to the costs claimed by the CCA’s legal representative, Wachowich & Company. The costs claimed by the CCA’s consultant, Bema, were the subject of the review request.
The Hearing Panel’s findings pertaining to Bema’s cost claim were summarized as follows:
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Delay requests and the resultant costs to re-acquaint themselves with the record
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Limited assistance to the AUC in certain parts of the evidence filed
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Potential duplication of work performed by CCA
AUC’s Review Process
The AUC noted that its authority to review its own decisions is discretionary and is found in Section 10 of the Alberta Utilities Commission Act. The review process has two stages. In the first stage, a review panel must decide whether there are grounds to review the original decision, 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, given the nature of the error(s) alleged, the Review Panel decided both the preliminary question and the variance question.
Grounds for Review and Review Panel Findings
The CCA alleged that the Hearing Panel made an error of fact, law, or jurisdiction. The six grounds in support of its review application, and the Hearing Panel’s findings were as follows:
Grounds 1 and 2: Delays in Proceeding 22393 and Responsibility for Costs for Reacquainting With the Proceeding Record
The Review Panel noted that the Hearing Panel did not attribute all of the delays in the proceeding solely to the CCA. Rather, it stated that some of the delay was attributable to CCA requests that were, in part, driven by CCA resourcing issues. The Review Panel found that the Hearing Panel’s factual determinations on these issues were supported by the record. These grounds of review were denied.
Ground 3: Quality of the Evidence
The Hearing Panel did not make a finding dismissing parts of the Bema evidence in its entirety, as suggested by the CCA in its review application. Rather, the Hearing Panel made a factual determination that because portions of Bema’s evidence contained errors or were incomplete, that, when considering the assistance to the AUC of this evidence, all of the costs incurred by Bema in preparing its evidence were not warranted. The Review Panel noted that it is not its task to second guess the weight assigned by the Hearing Panel to various pieces of evidence. This ground of review was denied.
Ground 4: Duplication of Efforts and Review Work Performed
The CCA argued that only time spent reviewing and revising work was claimed, and therefore there was no duplication of costs. The Review Panel noted that it was clear on the face of the Costs Decision that the Hearing Panel was aware that work included revisions, not just reviewing. The Hearing Panel recognized that there was overlap, it was simply not persuaded that all of the time spent reviewing and revising the work of the multiple consultants was kept to a minimum or that it was reasonable to ask ratepayers to pay for those costs in the absence of sufficient detail. This ground of review was denied.
Ground 5: Procedural Fairness
The CCA argued that it was procedurally unfair of the Hearing Panel to seek clarification from ATCO Electric on its costs, but not to provide a similar opportunity to the CCA to provide further explanation of its costs application.
The Review Panel noted that the CCA filed a 201-page costs application, replete with each of the invoices it relied on to support its costs claim. The CCA was also provided with the opportunity to file whatever submissions it wished to make in support of the costs it was requesting. As such, the Hearing Panel had before it all of the underlying supporting documentation that was available to make its decision. This ground of review was denied.
Ground 6: Mathematical Error
The CCA provided analysis to demonstrate that even accepting each of the findings above would not substantiate a 50 percent cost disallowance.
The Review Panel noted that it was clear from the Costs Decision, that each of the findings: (1) refamiliarizing work due to delays; (2) quality of some portions of the evidence; and (3) duplication of work all supported a disallowance of the total costs claimed by Bema.
However, based on the analysis provided, and review of the costs record, the Review Panel found that, on its face, the combination of each of these findings would not substantiate 50 percent of the total Bema costs disallowed.
Decision
In answering the preliminary question, the Review Panel found that the CCA did not meet the requirements for a review of the findings in the Costs Decision based on grounds 1 through 5.
However, with regard to argument ground 6, regarding whether the totality of the reasons presented supports a 50 percent disallowance of Bema’s costs, the Review Panel found that the CCA demonstrated that an error existed on a balance of probabilities and that there is a reasonable possibility that this error could lead the AUC to materially vary or rescind the Decision.
The AUC considered that no additional information or submissions from parties was required and proceeded to the second stage of deciding whether to confirm, vary or rescind the 50 percent disallowance in the Costs Decision.
The Review Panel considered that a 25 percent reduction of hours claimed would reflect the findings. Accordingly, the Costs Decision was varied by deleting the words “50 percent reduction” and replacing them with the words “25 percent reduction.”
