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Kalina Distributed Power Limited v Alberta Utilities Commission, 2023 ABCA 173

Link to Decision Summarized

Electricity – DCG-Credits

Application

The distribution-connected generators (“DCG”) Campus Energy Partners LP, Kalina Distributed Power Ltd., Lionstooth Energy Inc., and Signalta Resources Ltd., collectively (“KLSC”) appealed the AUC’s decision 26090-D01-2021 phasing out over five years DCG credits that are part of the tariffs of ATCO Electric Ltd., ENMAX Power Corporation and FortisAlberta Inc.

The ABCA granted permission to appeal on the following grounds:

  1. The AUC erred in law in concluding that no party in this proceeding had to assume the onus of proof with respect to whether the Distribution Utilities’ DCG Credit tariff provisions were just and reasonable. Although the AUC suggested in Decision 26090 that it determined the facts at large without a burden on anyone, its reasons revealed that it placed a practical / evidential burden on the KLSC parties to prove a quantifiable benefit to ratepayers when KLSC was not in the position of such as Fortis to meet such a burden.
  2. The AUC erred in law when it considered larger policy issues such as a level playing field involving features of alleged market distortion and negatives for “efficient market outcomes” in its application of s 121(2)(a) of the EUA. Relatedly, the AUC erred in law when it directed the parties to provide submissions and evidence with respect to such larger policy considerations and when it extended itself into consideration of imported evidential materials from prior AUC proceedings and deployed them adversely to the position of KLSC.
  3. The AUC failed to give procedural and adjudicative fairness and comply with the principles of natural justice in various manners, including the foregoing. It will be open to KLSC to discuss the process from the Notice letter, dated November 17, 2020, up to and including the AUC decision as to remedy.

Decision

The ABCA dismissed the appeal.

Pertinent Issues

In this decision, the ABCA did not address the first two error of law grounds and only summarily addressed the third procedural fairness ground.

According to the ABCA, KLSC argued that the AUC’s process in Proceeding 26090 was unfair. The appellants argued that the AUC shifted the burden of proof from the respondent utilities ATCO Electric Ltd., ENMAX Power Corporation and FortisAlberta Inc. to KLSC. As a result, KLSC argued that they did not have adequate notice or access to the required information – that rested with the utilities – to provide the required evidence to support the proposition that the distribution-connected generation credits are just and reasonable. The ABCA stated that KLSC, in essence, argued that they were denied the opportunity to, and did not realize that they had to make their best argument.

The ABCA determined that a reasonable person familiar with the practice of the AUC would be put on notice that the AUC would engage in examining whether the three utilities collecting DCG credits from ratepayers could continue to do so, that this will affect the owners and operators of the DCG that benefit from these credits, and that interested parties can have a say. The ABCA decided that the AUC had put interested parties on notice of its concerns and its intentions, and clearly invited submissions.

The ABCA was not convinced by the arguments of the appellants and determined that, regardless of where the burden of proof did or was supposed to lie, the appellants had every opportunity to put their best arguments and submissions forward.

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