Court rules that deviation from standard procedure caused by applicant's act does not warrant appeal

Altering procedure due to refusal to provide information not a breach of procedural fairness

Court rules that deviation from standard procedure caused by applicant's act does not warrant appeal
Tariff applications must be based on calculations

The Court of Appeal for Alberta has ruled that the deviation of procedure due to an applicant’s refusal to provide information did not result in the breach of duty of procedural fairness warranting an appeal.

In ENMAX Power Corporation v Alberta Utilities Commission, 2021 ABCA 347, the applicant filed an application with the Alberta Utilities Commission for approval of its tariff for the year 2021 and 2022. The application contained a depreciation expense of approximately 27 per cent of its total forecasted revenue. The Commission requested calculations in support for the applicants forecast, but the applicant was “unable to provide the detailed calculations supporting its depreciation expense” because the depreciation expense was “generated by an automated system calculation.” During a negotiated settlement process to consider the tariff application, the Commission excluded the topic of depreciation expense since the applicant failed to provide the supporting calculations.

During a virtual hearing held by the Commission on the applicant’s depreciation expense, intervenors raised issues with the applicant’s evidence, claiming that its forecast’s reasonableness could not be tested. In response, the applicant submitted that the sample testing provides “adequate evidentiary foundation” that the depreciation expense was properly calculated.

The Commission approved the negotiated settlement agreement but denied ENMAX’s requested depreciation expense for 2021 and 2022 and directed that ENMAX use the previously approved lower 2020 depreciation expense.

The applicant filed an application for permission to appeal, asserting that the Commission failed to provide reasonable opportunity to recover the depreciation expense, approved the depreciation rates without evidentiary foundation, and breached its duty of procedural fairness.

The Court ruled that the Commission was correct in finding that the applicant bore the burden of proof to show that the proposed tariff was just and reasonable. The applicant alleges that the evidence was adequate, and the Commission ruled otherwise. “Allegations that evidence should be weighed differently do not raise questions of law or jurisdiction,” said the Court and thus, these grounds for appeal fail the threshold requirement.

The third ground of appeal is also neither of significance to the practice nor to the action, said the Court. The Court ruled that the applicant’s “legitimate expectations” argument that such calculations would not be required fails because legitimate expectations could not create substantive rights to a particular outcome. The Commission is required to assess each application based on the evidence presented, said the Court, and in this case, the Commission’s procedure was tailored to this unique situation where the applicant refused to provide information expressly requested by the Commission. Despite the applicant already having notice that its evidence lacked adequacy when the Commission requested the calculations, it continued to assert that its evidence was “adequate,” which the Commission disagreed.

“While the threshold of prima facie meritorious is low, … I am not convinced that the third proposed ground of appeal is a question that requires consideration by this court,” said the Court.

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