recent enforcement decisions

Compliance and enforcement

Ensuring regulated utilities comply with AUC decisions, orders, rules and relevant legislation

The Alberta Utilities Commission has recently resolved the following compliance and enforcement matters.

The Commission’s enforcement staff conduct a preliminary examination of all complaints that appear to involve a contravention of Alberta’s utility laws, and Commission orders, decisions and rules. Many of those complaints are resolved without the need for further investigation or enforcement action.

If it appears that a violation of law or rule can be proven and the information is sufficient to warrant further action, then a designated enforcement Commission member (a member of the regulatory tribunal) is assigned to the file and decides whether further investigation is warranted.

The following matters were resolved as a result of Commission investigations.


Environment, wildlife and noise

The Commission closed its investigation into complaints by Alberta Environment and Parks that Oldman 2 had (1) failed to meet its environmental commitments of hiring an environmental monitor during construction, (2) failed to prevent disturbances to the ferruginous hawk and prairie falcon nest locations, and (3) failed to implement its post-construction mitigation plan during the three-month fall migration period in 2016.

Oldman 2 and the Ikea Group co-operated fully with the AUC’s investigation by providing information and exploring solutions to address its non-compliance. To address the identified non-compliance, Oldman 2, on behalf of its new owner, proposed to add the following conditions to its approval, which were approved by the Commission on January 26, 2018:

  1. Implementation of the Construction Mitigation Plan, including establishment of nest platforms (ferruginous hawks) and nest site and habitat conservation (prairie falcon and grassland birds).
  2. Oldman 2 will donate $280,275 for habitat conservation in southern Alberta. A portion of this amount will be used as described for ferruginous hawk nesting habitat, and the remainder will be donated to a habitat protection organisation in southern Alberta (e.g., Southern Alberta Land Trust Society) to provide direct benefit to the species affected during construction of the Oldman 2 Project.
  3. Maintenance of a project-wide corporate compliance plan to maintain adherence to regulatory commitments and conditions, including the Operational Bat Mitigation Implementation Plan, and to report on the progress of each of the actions described in the letter of enquiry and Construction Mitigation Plan.
  4. The approved application amendments that address the Oldman 2 wind farm’s environmental compliance are found in Decision 23241-D01-2018

The Commission has concluded its investigation into 20 landowner complaints regarding allegations of insufficient reclamation along the Eastern Alberta Transmission Line and the Hanna Region Transmission Development lines. Landowner complaints included rutting, compaction, uncollected construction debris and damage to crops.

Commission enforcement staff conducted multiple rounds of interviews with each of the 20 complainants and determined that ATCO Electric had likely contravened the Commission’s directions made in Decision 2012-303 Eastern Alberta Transmission Line and Decision 2012-120 Hanna Region Transmission Development lines. Enforcement staff met with senior officers of ATCO Electric, and pursed a resolution to address outstanding reclamation issues. Since that time ATCO Electric has cooperated fully and resolved the majority of landowner complaints. The Commission has closed its investigation on the understanding that ATCO Electric will continue to resolve the remaining concerns and will provide the Commission with an update once those matters are resolved.

The Commission has confirmed the resolution of a landowner’s concern that they were not adequately consulted regarding the access and use of their property as part of the Fort McMurray West 500-Kilovolt Transmission Project. The landowner had alleged that Alberta PowerLine General Partner Ltd. (Alberta PowerLine) had consulted them on the transmission line location, but not on the use of an access road on their property. Alberta PowerLine cooperated fully with the Commission’s preliminary examination of the complaint, and both parties were subsequently able to reach a resolution to the landowner’s concerns.

Under the Micro-Generation Regulation, a customer is to receive compensation from its retailer for the excess generation provided to the distribution grid at a rate equal to the rate that the retailer charges the customer for consuming electricity. A customer complained that its retailer was charging for the consumption at one rate, but providing compensation at a lower rate. AUC staff investigated the matter and determined the retailer did not interpret the regulation properly. The retailer made the necessary adjustment to ensure the customer received the proper compensation and confirmed that all of its other micro-generation customers were receiving the proper compensation.

In a complaint, Burnco Rock Products Ltd. (Burnco) asked the Commission for (1) relief from certain provisions in the FortisAlberta Inc. (Fortis) Customer Terms and Conditions of Electric Distribution Service (T&Cs), including a declaration that Burnco is not obligated to pay the Distribution Customer Exit Charge, and (2) an order requiring Fortis to immediately repay the overcharges made by Burnco. In its complaint, Burnco stated it had requested that Fortis terminate electric services and commence salvage of power facilities at two of its sites, and that Fortis had declined to proceed with the salvage unless Burnco either paid a distribution customer exit charge or provided a notice period for termination.

On April 23, 2018, the Commission issued Decision 22872-D01-2018. In that decision the Commission determined that Fortis’ T&Cs, and more specifically, those requiring the provision of notice or the payment of charges for permanent disconnection, apply to Burnco and that those provisions were applied in a manner consistent with previous Commission decisions. However, the Commission also determined that Burnco had achieved substantive compliance with those provisions and their associated objectives of revenue certainty and rate stability had been satisfied. The Commission directed Fortis to refund any overcharges that occurred after the expiration of the notice period for both sites.

Dalziel Enterprises Ltd. registered a complaint which asked the Commission for relief from the payment in lieu of notice provisions in Fortis’ customer terms and conditions of electric distribution service (T&Cs), along with certain other forms of relief.

In June 2016, the Commission’s consumer relations group contacted Mr. Gil Dalziel regarding a complaint that he had filed on behalf of Dalziel Enterprises Ltd. with the Alberta Minister of Energy concerning fees charged to Dalziel Enterprises Ltd. by Fortis. From that point on Commission consumer relations staff communicated regularly with Mr. Dalziel and Fortis about Mr. Dalziel’s concerns, while the two parties entered into voluntary discussions with the goal of resolving those concerns. On July 6, 2017, Mr. Dalziel advised Commission staff by telephone that he was unable to resolve the complaint with Fortis. On July 13, 2017, Fortis confirmed with the Commission that Dalziel Enterprises Ltd.’s concerns remained unresolved.

On July 26, 2017, the Commission initiated Proceeding 22796 to consider Dalziel Enterprises Ltd.’s complaint pursuant to its authority under the Alberta Utilities Commission Act and the Electric Utilities Act.

On February 9, 2018, the Commission issued Decision 22796-D01-2018 which dismissed Dalziel Enterprises Ltd.’s complaint on the grounds that the T&Cs applied to Dalziel Enterprises Ltd., and that the payment in lieu of notice provisions charges were applied in a manner consistent with previous Commission decisions.

The Commission closed its investigation into complaints that FortisAlberta Inc. may been in contravention of its terms and conditions by incorrectly or inconsistently applying its farm and residential rates.

Fortis’ Rate 21 Farm Service states that the property must contain a residence and have agricultural activities that are conducted with the intent to earn revenue. It appeared that Fortis had a practice of requesting customers to produce a property tax assessment, and that there are varying practices between different municipal districts in terms of designating a property to be either residential or farmland.

The “intent” element of Rate 21 appears to require some form of customer declaration. Commission enforcement staff’s concerns were that (1) only existing Fortis customers were given the opportunity to sign a declaration; and, (2) those existing customers were only provided the option of a declaration after they produce a property tax assessment that stated that the site is deemed residential by the customer’s municipal district.

As a resolution to this matter, Fortis agreed to implement a process whereby a statutory declaration (that is signed by a witness) is made available for all new Fortis customers and existing Fortis customers that request a rate change. Further, that declaration would be made available to existing Fortis customers regardless of that customer’s property tax designation as a residential or agricultural site.

AUC Rule 028 requires a retailer to provide updated customer information when the retailer enrolls a site or when the distribution utility requests that information. A retailer did not responds to ATCO Gas’ repeated request for updated customer information and referred the matter to AUC enforcement staff. AUC staff investigated the matter, which led to the retailer contacting ATCO Gas to ascertain the exact information required. The unique aspect of this matter concerned the proper description of a rural address. The retailer worked with ATCO Gas to identify a solution to providing the information in the format required by AUC Rule 028.

On March 24, 2016, Commission staff issued a letter to Direct Energy Regulated Services in which it noted a declining trend in the performance standards related to billing and customer satisfaction. AUC staff subsequently arranged a meeting with Direct Energy to receive an update from it. The update was to include the status of escalated complaints, which were under investigation at the time, the causes for the declining performance and the steps being undertaken to remedy the failing performance.

At that time, Direct Energy identified four main reasons for the escalated complaints:

  • Customers receiving more than one invoice in a billing period.
  • Customers not receiving an invoice for an extended period.
  • Customer payments gone missing or being applied to a different account.
  • Defects in the enrolment process.

Weekly meetings continued throughout 2016 and into early 2017 to monitor the progress towards rectifying customer complaints and resolving the four main reasons of the failing performance. All four reasons were identified as emanating from technical causes. By March 2017, Direct Energy stated that billing system solutions were implemented that addressed the technical causes of the customer complaints.

Also in March 2017, AUC staff advised Direct Energy that an independent assessment would be required to confirm that the technical solutions implemented did result in the billing issues being addressed. Consequently, Direct Energy retained PricewaterhouseCoopers LLP to conduct the assessment.

Commission staff received PricewaterhouseCoopers’ report in September 2017 and reviewed the testing procedures and findings with Direct Energy personnel in October 2017. Commission staff were satisfied with PricewaterhouseCoopers' approach in conducting its assessment and arriving at its findings. Overall, Commission staff accepted PricewaterhouseCoopers’ assessment and findings that the technical solutions implemented have addressed the billing issues.

Commission staff’s review and monitoring of the causes of the escalating customer complaints of 2016 is now complete. Further, AUC staff expects that the causes identified in 2016 will not re-occur and that customer satisfaction will consequently improve from the results observed in the 2015 and 2016 annual reporting of Rule 003 performance.

The AUC implemented the largest administrative penalty every imposed in Canada against TransAlta Corp., for breaches of Alberta’s electricity market rules. The penalty came after an open, on-the-record hearing and AUC proceeding.

TransAlta was ordered to pay almost $52 million in an administrative penalty and $4.3 million for the Market Surveillance Administrator’s costs. The administrative penalty included $27 million to cover any financial benefit TransAlta may have accrued, and $25 million as a monetary penalty. In its decision, the AUC said that it “believes that the magnitude of the proposed monetary penalty, when coupled with the disgorgement payment, is such that it cannot be considered by TransAlta or other future transgressors as a cost of doing business or a licensing fee for transgressions.”

The AUC has a dedicated team operating from its Market Oversight and Enforcement Division that oversees complaints about uncompetitive market behaviour.

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