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Enforcement Staff of the Alberta Utilities Commission Settlement Agreement with Avex Energy Inc., AUC Decision 28765-D01-2024

Link to Decision Summarized

Enforcement – Facilities

Application

Enforcement staff of the AUC Enforcement Division (“Enforcement Staff”) applied for approval of a negotiated settlement agreement (“NSA”) between Enforcement Staff and Avex Energy Inc. (“Avex”) in relation to the operation of the Red Willow Power Plant (the “Power Plant”) without the required approval.

Decision

The AUC approved the NSA reached between Enforcement Staff and Avex and imposed on Avex a total penalty of $241,477.

Pertinent Issues

In response to noise complaints received from residents near the Power Plant, Enforcement Staff investigated the operation of the Power Plant from December 2021 to September 2022. The investigation confirmed and Avex admitted that it operated the Power Plant without an approval, contrary to s 11 of 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”).

The penalty for the contravention was comprised of an administrative penalty of $10,496 and disgorgement in the amount of $230,981 to nullify, in part, the value of gains acquired from the sale of the electric energy produced from the unlawful operation of the Power Plant between April 2021, and December 2021.

The AUC noted that Avex was cooperative, engaging in discussions to resolve issues of fact and the penalty arising from the investigation. The imposed administrative penalty reflected a 30 percent reduction in recognition of Avex’s cooperation and admission of the contravention, which avoided a hearing and facilitated a timely resolution of the matter.

When assessing whether a negotiated settlement agreement should be approved, the AUC must first be satisfied that the alleged contravention occurred. Second, the AUC applies the public interest test, which requires the AUC not to depart from a negotiated settlement unless the proposed settlement would bring the administration of justice into disrepute or is otherwise contrary to the public interest.

Based on information provided by the parties in the application and the NSA, the AUC accepted that the contravention occurred and was satisfied that approval of the proposed settlement agreement was in the public interest.

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