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 closed its preliminary examination into a landowner’s complaint regarding debris and trees that were removed during construction of the Western Alberta Transmission Line (WATL). The landowner had requested that AltaLink Management Ltd. clear any remaining debris, and that the Commission issue an enforcement order directing AltaLink to replant the removed trees.

AltaLink made commitments with respect to clean up and post-construction reclamation along the WATL project as part of evidence relied on in AUC Decision 2012-327. Commission enforcement staff conducted a preliminary examination of the landowner’s concerns and attended the property on several occasions in an attempt to facilitate a resolution suitable to the landowner. The Commission enforcement staff decided to close the matter as AltaLink had performed reclamation activities consistent with its commitments and is in voluntary compliance as it continues to work with the landowner. In addition, AltaLink did not make any commitment that the trees cut down on the right-of-way were to be replanted either on the right-of-way or elsewhere on a person’s land. Revegetation was limited to reseeding disturbed land and not replanting trees which were removed to provide safe clearance to the wires. In the AUC enforcement staff’s view, no contravention can be made regarding the replanting of the trees that were removed from the right-of-way.

The Commission has closed its investigation into a complaint made by a landowner concerning a fire that originated from an ATCO Electric distribution power line near High Level, Alberta. The landowner stated that on May 12, 2018, he observed a downed power line and that a small fire was burning. The landowner proceeded to start to put out the fire, but was told to stop by first responders because it was unknown whether it was safe to do so due to the downed power line. Strong winds spread the fire and it destroyed a three-bedroom house, farm buildings, equipment and livestock.

Commission enforcement staff investigated whether (1) ATCO Electric had adequately maintained the right-of-way, and (2) whether ATCO Electric’s protection system functioned in a safe and reliable manner.

The requirements for vegetation clearance for distribution lines are established through industry standards and best practices. The Canadian Standards Association (CSA) is a private not-for-profit organization that publishes voluntary standards and related documents. CSA standard C22.3 prescribes a flashover distance of 216 millimetres for a 15 kV line and states that other field conditions, such as a road or water crossing, can warrant consideration of an additional buffer. In this case ATCO Electric maintained the right-of-way with several metres of additional clearance beyond what was required of CSA standard C22.3. As a result, Commission enforcement staff concluded that ATCO Electric maintained the right-of-way in accordance with industry standards, and in manner consistent with Section 105(1)(c) of the Electric Utilities Act.

The requirements for protection systems on distribution lines are established through industry standards and best practices. The Institute of Electrical and Electronics Engineers (IEEE) standard C37.230 Guide for Protective Relay Applications to Distribution Lines, is a standard commonly used by distribution companies for the design and operation of distribution protection systems.

ATCO Electric’s protection scheme was similar in approach to the common methods stated in IEEE C37.230, and its protection relay fault clearing time was similar to that expected of other distribution system operators. As a result, Commission enforcement staff concluded that on May 12, 2018, ATCO Electric’s protection system operated in manner consistent with Section 105(1)(c) of the Electric Utilities Act.

To mitigate against potential future events, the Commission will follow-up with rural distribution and transmission line operators regarding operational protocols where first responders are present in the event of a downed power line.

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.

On August 24, 2018, the Alberta Utilities Commission issued Decision 23159-D01-2018 which found that some of the Town of Coaldale’s water, drainage and sewer service charges did not conform to the public utility rate structure established by the Town of Coaldale and were improperly imposed. The Commission then directed the Town of Coaldale to repay a particular utility account holder for certain monthly charges plus any interest and related penalties that occurred over a three-year period.

An application from the Town of Coaldale for permission to appeal Decision 2315—D01-2018 was dismissed by the Court of Appeal on November 23, 2018.

On December 19, 2018, Commission enforcement staff requested that the Town of Coaldale confirm that it had complied with the order directed in Decision 23159-D01-2018, and explain the actions taken to comply with the order.

On January 17, 2019, the Town of Coaldale responded that it had since credited the utility account holder with an amount equivalent to the specified charges. Commission enforcement staff confirmed that the credited amount satisfied the Commission’s directions in Decision 23159-D01-2018 and that the matter was concluded.

Solar Krafte Utilities Inc. filed a complaint with the Commission that it was overcharged by FortisAlberta Inc. to connect its renewable generation power plant to Fortis’s distribution system. Solar Krafte submitted that Fortis’s terms and conditions are silent on the flow-through of the Alberta Electric System Operator’s (AESO) assessment to distribution generation customers based on substation fraction, and that a plain interpretation of incremental interconnection costs supports using only the actual costs incurred to effect the interconnection.

Fortis’s terms and conditions of service form part of its tariff that is approved by the Commission. Charges and credits for distributed generation customers are prescribed in Section 12.6.1 of Fortis’s customer terms and conditions. The section currently states that the distribution generation customer will be required to pay all incremental interconnection costs as determined by Fortis, including any transmission related costs assessed by the AESO and flowed-through to Fortis.

The Commission closed its investigation because it is unlikely that a contravention could be proven on a balance of probabilities that Fortis had contravened its customer terms and conditions by passing on AESO-assessed participant-related connection charges to Solar Krafte. The AESO’s practice of calculating customer contributions for distribution-connected generator customers is currently before the Commission in its consideration of the AESO’s 2018 tariff application in Proceeding 22942.

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.

On October 4, 2018, the City of Medicine Hat self-reported to the Commission that work for five permits and licences was completed after stipulated completion dates. The work was completed in timeframes of three months to three years after the stipulated completion dates, and no time extension requests were made. In addition, energization certificates had not been submitted for three of the permits and licences.

Completion dates are stipulated by the Commission as a condition of its approvals to ensure that the approved work is completed by a specified date. If a project is completed after the stipulated completion date, the approval holder is not meeting all of the terms and conditions of the approval and may compromise the public interest that was contemplated by the Commission during the consideration of the application.

Commission enforcement staff requested that the City of Medicine Hat provide a detailed timeline of when the work was completed, why the work was delayed beyond the stipulated completion date, any social or environmental concerns that were raised by stakeholders, and any other issues encountered during the completion of the work. The City of Medicine Hat was also requested to submit the necessary energization certificates for each of the five permits and licences.

On February 1, 2019, the City of Medicine Hat provided the information requested, and stated that it had taken the following steps to ensure that similar problems do not occur in the future: 

  • It has undertaken a significant reorganization of its utility operations under leadership of a new general manager. 
  • Industry best practices have been implemented ensuring that a senior engineer will review work performed by junior staff. 
  • Bi-weekly reports for all ongoing capital projects are now provided to the general manager ensuring compliance with all corporate and regulatory obligations. 
  • A new electronic filing system has been implemented to ensure that project information is maintained in accordance with industry best practices. 
  • A new electronic asset management system is currently in development to ensure current asset information is available and up to date. 
  • Formal training is provided to any staff responsible for capital projects.

As set out in Commission Bulletin 2016-10, the Commission’s primary goal of enforcement is to promote compliance with Alberta utility laws and to prevent harm to any person, public or private property or to the integrity of the AUC’s regulatory processes and to ensure that the public and regulated entities understand that there are serious consequences for contraventions.

Compliance is promoted using a variety of means including, as was the case in this matter, voluntary reporting from a party. The objective of these activities is to deter future contraventions.

On February 14, 2019, Commission enforcement staff confirmed to the City of Medicine Hat that its response was sufficient to address the concerns raised regarding the five permits and licences identified where work was completed beyond the stipulated completion date.

The Market Surveillance Administrator (MSA) on May 4, 2018, filed an application with the Commission for approval of a settlement agreement between the MSA and ENMAX Energy Corporation and ENMAX Encompass Inc. (together ENMAX).

The settlement agreement was the result of an MSA investigation which was prompted by a referral from the AUC. The matter at issue in the investigation was whether ENMAX contravened the Code of Conduct Regulation in the provision of service and customer assistance from its customer care centre. The MSA’s investigation concluded that ENMAX contravened provisions of the Code of Conduct Regulation related to advertising, prohibitions and information provided to customers about retail energy services through the ENMAX customer care centre.

The MSA recommended, and the AUC ordered that ENMAX pay an all-inclusive penalty of $150,000 for the contraventions to the Code of Conduct Regulation as well as $100,000 towards MSA’s legal, administration and investigation costs.

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.


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