The beginnings of electricity and natural gas in our province started just a short time before the creation of the Board of Public Utility Commissioners.
Calgary was the first of Alberta’s urban centres to adopt electricity, installing street lights in 1887 with Edmonton following suit, installing street lights in 1891. As demand increased, so did the need for production and so Horseshoe Falls – the province’s first hydroelectric dam – opened in 1911.
Similarly, gas pipeline construction began to boom in the early 1900s and natural gas service began in Alberta in 1912. By 1914, wet natural gas had been discovered in Turner Valley, sparking an industry that Albertans continue to rely on in their daily lives today.
Photo: The Dingman No. 1 Discovery Well in Turner Valley marked the discovery of oil and gas in Alberta.
Provincial Archives of Alberta, P1883
The Board of Public Utility Commissioners was created on April 17, 1915, and began its operations in October of that same year. Former lieutenant-governor, George Bulyea, was appointed as the first chair of the board.
At this time in Alberta’s history, utility services were limited and demand was much lower than it is today. As a result, the provincial government extended the board’s jurisdiction far beyond utility-related matters. This included the supervision of all debentures issued by municipalities and school districts, the regulation of the sale of shares and securities of companies within Alberta, the approval of tariffs for provincial railways, the approval of highway crossings by railway branch lines and finally the approval of Alberta Government Telephones’ rates.
Photo: The Board of Public Utility Commissioners’ first Chair, George Bulyea, pictured with cane.
Glenbow Archives NA-1328-64874
Alberta Government Telephones filed its first application with the Board of Public Utility Commissioners seeking a reclassification and increase to toll rates. The primary issue under review was the relationship between toll and exchange rates. On June 8, 1921, the board approved the applied for increase and reclassification of rates.
Photo: The paper application filed with the board in April 25, 1921 by Alberta Government Telephones.
In 1923, the Public Utilities Act of 1915 was repealed and replaced with a new Public Utilities Act that changed the scope of the board’s work to include the regulation of a wider range of services. While the board no longer had jurisdiction over the sale of shares, its new responsibilities included supervising municipal expenditures, investigating and assessing methods of taxing lands, cancelling subdivisions and directing the repayment of a municipality's debt. Tramway, street railway and steam railway transportation companies were also brought under the regulation of the board.
It was also in 1923 that the board was granted the right to investigate any public utility and make changes where it believed appropriate to protect public interest. These increased investigatory powers gave much greater legitimacy to the young regulatory board and allowed for the utility industry to be managed more efficiently.
Photo: A railroad crew lays tracks for a railway line from Edmonton to British Columbia.
Provincial Archives of Alberta A4019
In 1933, the Board of Public Utility Commissioners was given additional responsibilities when milk was declared a public utility. The board was granted the power to regulate all aspects of milk production, handling and distribution in the province.
Cuts to the price of milk in Calgary and Edmonton had a harmful impact on the viability and profitability of milk production. To mitigate the situation, the board quickly issued interim pricing orders to increase the wholesale price paid to milk producers.
Milk regulation quickly became a major focus of the board’s activities due to its importance in the everyday lives of Albertans.
Photo: Milk producers in the 1930s, pictured, relied on the board to regulate the price of milk and ensure their viability.
Provincial Archives of Alberta, A16576
As the utility industry continued to develop, the work of the board continued to grow. As a result, in 1937, the provincial government formed new boards to oversee things such as fuel licensing and transportation to allow the Board of Public Utility Commissioners to focus on its core responsibilities related to electricity, natural gas, telephones and milk.
The board was also given the power to prescribe measures of safety for the protection of life and property relating to natural gas and oil pipelines. The board now had a visible and important role in protecting the people of Alberta, which helped validate its role within the burgeoning utility industry.
Photo: Telephone linemen, pictured, were busy in the 1930s as the industry began to boom.
Provincial Archives of Alberta A11684
A threat to the normal operation of the Board of Public Utility Commissioners came in 1948 when Albertans were asked, by means of a provincial plebiscite, to decide whether they thought electric utilities should be publicly or privately owned and operated. As rural communities were becoming frustrated with the slow pace of electric infrastructure development, many people in those areas felt that a publicly owned utility would increase productivity, while urban-dwellers seemed to favour privately owned utilities as they were afraid that a publicly owned utility would charge higher rates to subsidize the cost of rural electrification.
The official total was 139,840 Albertans in favour of a publicly owned utility and 139,991 Albertans in favour of keeping the current system of privately owned utilities – a margin of only 151 votes. As a result, the board was able to maintain its status as a necessary regulator for the utility industry in Alberta.
Photo: A clip from the Edmonton Journal on August 17, 1948 shows voters going to the polls to vote on the provincial plebiscite.
In 1960, the Board of Public Utility Commissioners changed its name to the Public Utilities Board to be more concise. The Gas Utilities Act was introduced that same year which increased the jurisdiction of the Public Utilities Board. The act detailed the governance of distribution of natural gas in Alberta by investor-owned utilities and it gave the board authority over nearly all aspects of the natural gas industry in Alberta. The Gas Utilities Act has had a lasting impact, as it continues to be a major part of the governing and jurisdiction of the Alberta Utilities Commission today.
Photo: The Gas Utilities Act brought natural gas distribution, pictured, under the jurisdiction of the Public Utilities Board.
Glenbow Archives IP-14a-2577
This was a time of immense development throughout the province, especially in the utilities industry, and so the Public Utilities Board shed many of the responsibilities that were non-utility related in order to focus on its main priority: ensuring efficient utility service for Albertans at fair rates.
The board’s authority over expropriations by companies was transferred to the Board of Arbitration and the duties over determining compensation for lands taken in municipal expropriations was transferred to the Land Compensation Board. The year prior, the board's jurisdiction was reduced under the Milk Control Act leaving the board with jurisdiction over the minimum price of milk.
Photo: Linemen work on a distribution line in Calgary as demand for utility connection in Alberta continues to rise.
The City of Calgary, Corporate Records, Archives CalA 910722006
The provincial government introduced the Natural Gas Prices Protection Plan. The board’s role in the plan, which was aimed at sheltering Alberta consumers from increasing prices of natural gas, was set out in the Natural Gas Rebate Act. Under the act, the board was required to issue certificates qualifying utilities to receive provincial rebates.
Public complaints and inquiries regarding utilities services increased along with the utility rates. This growth in workload prompted the Public Utilities Board to publish guidelines on the conduct of public hearings. By 1977, the board had become increasingly concerned with the rising costs associated with public hearings. This prompted the board to adopt guidelines that allowed intervener costs to be recovered by customers through rates only if the interventions at hearings had been reasonable and beneficial to the proceeding. As a result the board saw an overall more responsible attitude towards rate hearing costs taken by interveners and applicants that still exists today.
Photo: Public hearings have been an integral part of the board’s process since its inception in 1915.
City of Edmonton Archives EA-600-553b
In 1986 the price of natural gas was deregulated by a federal-provincial agreement called the Natural Gas Markets and Pricing Agreement, which was signed by Alberta, British Columbia, Saskatchewan and the government of Canada. This agreement began the process of natural gas price deregulation throughout Canada and meant that natural gas prices would be determined by competitive market forces.
The Natural Gas Prices Protection Plan fully expired in 1988 as a result of the decline in natural gas prices that followed deregulation.
Photo: The invention of plastic pipe in the 1960s made it feasible for companies like ATCO Gas to distribute natural gas to rural areas, leading to widespread utility connection by the 1980s.
Photo courtesy of ATCO Gas
The board became even more focused on the utility industry in 1989, when the Supreme Court of Canada ruled that Alberta Government Telephones, the only telecommunications company that the Public Utilities Board regulated, was an interprovincial enterprise and was therefore considered outside of the board’s jurisdiction.
Photo: After 1989, the board no longer had jurisdiction over Alberta Government Telephones and their operations, pictured.
Glenbow Archives ND-3-3361b
The Public Utilities Board and the Energy Resources and Conservation Board merged to create the Alberta Energy and Utilities Board in order to provide a more streamlined and efficient regulatory process. The newly formed board assumed the jurisdiction of each of the boards and continued to exist as separate legal entities operating under their respective legislations.
In 1996, the Energy and Utilities Board held a hearing to restructure electric tariffs to implement changes to the electric utility industry that were introduced in the Electric Utilities Act. Each major utility applied to separate its generation, transmission and distribution costs. The framework for further restructuring of the industry was established through the Electric Utilities Amendment Act that was passed the following year.
Photo: The City of Calgary Electric System, crews pictured, was one of the many companies required to separate its costs as a result of the changes to the Electric Utilities Act.
The City of Calgary, Corporate Records, Archives CalA980302007
Alberta’s electric utility industry was overhauled once again in 2001 when the legislative changes that were brought about by the Electric Utilities Amendment Act were put into place. The deregulation of wholesale energy prices allowed non-utility companies to compete as retailers to serve eligible customers’ energy needs. A rate regulated by the Energy and Utilities Board called the regulated rate option was offered to customers by investor-owned utilities.
Photo: While companies like ATCO Electric continued to maintain electric infrastructure like the substation, pictured, retailers were now allowed to enter the market to sell electricity.
Photo courtesy of ATCO Electric Ltd
The Alberta Transmission Regulation was enacted in 2004 and supplemented the Electric Utilities Amendment Act. The regulation provided detail about the board's responsibilites related to transmission system planning, reliability standards, facility projects, costs, losses, and credits.
The provincial government was consistently making policy changes to ensure that Alberta’s newly restructured electricity industry was moving as smoothly and efficiently as possible. As a result, the Energy and Utilities Board was actively involved in all policy change processes, watching out for the best interests of Albertans and making sure that necessary regulation was in place to protect consumers.
Photo: Changes to the Electric Utilities Amendment Act in 2004 effected transmission and distribution planning, pictured.
Photo courtesy of Alberta Electric System Operator
The Alberta Utilities Commission Act was passed in 2008, dissolving the Energy and Utilities Board into two separate regulatory agencies – the Alberta Utilities Commission, which had a much expanded mandate in regulating the province’s utility sector and the Energy Resources Conservation Board, which had jurisdiction over the development of Alberta’s oil and gas resources. The newly formed Alberta Utilities Commission came under the leadership of its current chair, Willie Grieve.
It was also in 2008 that the Micro-Generation Regulation was passed. The regulation allowed Albertans to generate their own electricity from renewable resources such as wind and solar power, and receive credit for any power they may provide to the provincial electricity grid.
Photo: Alberta Utilities Commission members in 2008.
In 2012 the Alberta Utilities Commission introduced performance-based regulation, a new framework for distribution-utility rate setting that provides incentives for utility companies to operate more efficiently.
Changes were also made to streamline the application process for power plant exemptions and alterations, and minor transmission facilities to improve regulatory efficiency.
In 2013, revisions were made to the Hydro and Electric Regulation to provide a wider range of exemption options that were available to the Commission when considering small power plant applications and minor facility alterations.
Photo: TransAlta’s Cowley Ridge wind farm is one of many generating stations in the province that would be effected by the application process changes.
Photo courtesy of TransAlta
Today, the Alberta Utilities Commission is proud to continue its tradition of public service as it celebrates its centennial.
The Commission has increased its emphasis on understanding and applying sound economic principles to optimize regulatory outcomes for companies and their customers. As a result, a unique position, the Dr. Alfred E. Kahn Visiting Scholar in Regulatory Economics, was created to give the Commission a solid perspective of current economic principles and analytical techniques as it explores more innovative and efficient regulatory solutions.
“There is no higher calling than public service. It is an honour and a privilege to serve Alberta and to serve with the talented and dedicated group of Commission members and staff, all of whom are enlivened by the challenges ahead and dedicated to serving the public interest.” – AUC Chair, Willie Grieve
Photo: The AUC has highly skilled staff in both Edmonton and Calgary that work together to serve Albertans.