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Enforcement Staff of the Alberta Utilities Commission Penalty for Contraventions 1-5, Decision 26379-D04-2023

Link to Decision Summarized

Enforcement – Penalties

Application

This was a penalty determination as part of the second phase of the AUC’s enforcement proceeding against Green Block Mining Corp. (“Green Block”), formerly known as Link Global Technologies Inc. (“Link Global”). In the phase one of the enforcement proceeding, the AUC found that Green Block committed five contraventions related to the unauthorized operation of its power plants contrary to the Hydro and Electric Energy Act (“HEEA”) and Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydro Developments and Gas Utility Pipelines (“Rule 007”). In this proceeding, the AUC considered the appropriate penalty for those contraventions.

Decision

The AUC ordered that Green Block must pay an administrative penalty in the amount of $298,250.00 in total for the five contraventions.

Pertinent Issues

Overview

In the first phase of this enforcement proceeding, the AUC determined that Green Block operated three power plants in Alberta between 2019 and 2021 without the required approvals. The AUC issued Decisions 26379-D01-2023, 26379-D02-2023 and 26379-D03-2023 regarding the contraventions. This decision follows the second phase of the enforcement proceeding, where typically, the penalty is determined.

In Decision 26379-D02-2021, the AUC approved the terms of a partial settlement between Green Block and the AUC’s enforcement staff that included agreement on three contraventions and the administrative penalty range. The AUC imposed a total administrative penalty of $60,000 for Contraventions 1-3.

In Decision 26379-D02-2021, the AUC found that Green Block failed to inform the AUC in a timely manner of its shutdown activities of the Sturgeon plant in breach of the AUC’s Enforcement Order 26379-D01-2021. The AUC ordered an administrative penalty of $17,000 for Contravention 4.

In Decision 26379-D03-2022, the AUC imposed an administrative penalty of $221,250 for Contravention 5, which was in relation to Green Block’s operation of the Westlock plant without approval.

As a result, the AUC ordered that Green Block must pay an administrative penalty in the amount of two hundred and ninety-eight thousand, two hundred and fifty dollars ($298,250.00) pursuant to sections 63(1)(a) and 63(2)(a) of the Alberta Utilities Commission Act. The payment may be made via wire transfer, certified cheque, or bank draft made out to the General Revenue Fund of Alberta and delivered to the AUC within 30 business days of the date of this order.

Related to the administrative penalty for Contraventions 1-5 was the issue of economic benefit, if any, gained by Green Block by its wrongdoing. The AUC decided to address the economic benefit issue separately, following an oral hearing scheduled for October 19-20, 2023.

Sanctioning Purposes and Principles

In determining the penalty amounts, the AUC considered that the purpose of its sanctioning authority is to achieve general and specific deterrence, encourage compliance and protect the public. In addition, administrative sanctions are intended to be protective and preventative, not punitive. Proportionality is important when assessing an administrative penalty, and each monetary penalty must be proportionate to the circumstances of the individual offender. The issue of proportionality plays a prominent role in the consideration of the administrative penalty for Contravention 5, for which there was no agreement between the parties. Law on sanctioning did not play a significant role for Contraventions 1-4, where the contravention and penalties were agreed upon by the parties or previously determined by the AUC.

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