Within the last year, the Nova Scotia Utility and Review Board (“UARB”) decided two cases involving appeals to the UARB of wind energy projects being developed under Nova Scotia’s Community Feed-In Tariff (“COMFIT”) Program.
The COMFIT Program was established by the Province of Nova Scotia (“Province”) in 2010 to assist the Province in achieving the renewable energy targets set out in Nova Scotia’s Renewable Electricity Plan.1 Under the Renewable Electricity Regulations2 made pursuant to Nova Scotia’s Electricity Act3, generators that met certain community-based eligibility requirements could apply to the Minister of Energy (“Minister”) for approval of certain renewable energy projects, including those that generate wind power.4
Friends of Harmony Decision
The UARB’s decision in Re Friends of Harmony, Camden, Greenfield and Surrounding Areas upheld the Minister of Energy’s granting of a COMFIT approval to Affinity Wind Limited Partnership (“Affinity”) for a 3.2 MW wind project in Greenfield, Nova Scotia.
The Applicable Standard of Review
The appeal of the Minister’s decision was filed with the UARB by the Friends of Harmony pursuant to the statutory appeal provision contained in the Renewable Electricity Regulations.6 The UARB was required to consider the issue of what type of evidentiary hearing and standard of review should apply on an appeal to an appellate administrative tribunal (in this case, the UARB) of the decision of an administrative decision-maker of first instance (in this case, the Minister). That is, whether the hearing of the appeal of the Minister’s decision by the UARB should be:
based on the record, akin to a judicial review, with the Minister’s decision subject to deference and a reasonableness standard;
a hearing de novo with extraneous evidence admissible and the Minister’s decision subject to a correctness standard; or
something else, such as a hybrid approach “whereby the record before the Minister and the Minister’s decision are given significant weight by the Board, but supplemented by any relevant and useful evidence which may be provided by the parties.”7
Noting that this issue is “a developing area of case law”,8 the UARB concluded that the “hybrid approach” was appropriate,9 referring to Canadian Court cases in which the hybrid approach has received support.10
The UARB considered that a number of factors indicated that deference should be given to the Minister’s decision, including that the issue of approving a renewable energy project fell “squarely within the scope of matters which would normally be expected to fall within this ministerial mandate” and that “the Minister is in a more advantageous position than the Board in assessing the application.”11
Therefore the UARB was of the view that “significant deference should be given to the Minister’s decision and to the evidentiary record before him” and that “a ‘reasonableness’ standard of review should apply.”12 However, while the UARB did not consider that a de novo hearing was appropriate, it did consider that “it may be necessary to expand upon the evidentiary record in some instances in order to provide a greater context to make a finding on any particular issue”.13 Therefore, the UARB concluded that:
[T]he Board will give significant weight to the evidentiary record before the Minister and to his decision. However, the Board will allow other evidence to be admitted where this may be necessary to provide further context for the Board’s review.14
The UARB also pointed out that the burden of proof was on the appellants to establish, on a balance of probabilities, that the Minister was wrong in granting the COMFIT approval.15
The Requirement for “Community Support”
The primary ground of appeal advanced by the appellants in the Friends of Harmony case was that the Minister should not have approved the project because the evidence of “community support for the project” required under the Renewable Electricity Regulations16 had not been provided to the Minister. The UARB considered the Department of Energy’s (“Department”) Community Support Policy17 which set out a scoring system for determining whether a proposed project met the community support requirement under the Regulations.
Despite challenge by the appellants of the Department’s Community Support Policy, the UARB upheld the Policy as being permissible under the Renewable Electricity Regulations and was satisfied on the evidence that the project “easily exceeded” the minimum scoring threshold for the project under the Policy.18
The UARB noted that, at the time the Minister granted the COMFIT approval, both the Minister and Department staff were “acutely aware” of the opposition to the project by the appellants, some of whom had written to and/or met with the Minister and/or the Department staff.19 The UARB stated:
[T]here is nothing in the legislation that requires that the application be refused by the Minister if there is community opposition to the proposed COMFIT project, nor is there any indication that community support must outweigh any community opposition in order for a project to warrant the Minister’s approval. In the Board’s view, the Minister adopted a reasonable interpretation of the Regulations, such that if the proposed project garners some community support, then that is sufficient, for the purposes of the Regulations, to allow the Minister to approve the project. The Board finds that this was an interpretation that the Regulations could reasonable bear.20
These comments from the Board are particularly apt as the issue of “social license” is increasingly coming to the fore in respect of proposed energy projects throughout Atlantic Canada and elsewhere.
Friends of River Road Decision
More recently, the UARB decided Re Friends of River Road21 (“Friends of River Road”). The UARB dismissed the appeal by the Friends of River Road of the Minister’s decision to grant an extension of the in-service date for Chebucto Terence Bay Windfield Limited’s (“Chebucto”) 7.05 MW wind project on the basis that the appeal was moot.
Following a review of the COMFIT Program, in August, 2015 the Province announced that the COMFIT Program would no longer be accepting applications for new projects.22 This policy change was implemented by way of the Electricity Plan Implementation (2015) Act23 which added certain subsections to Section 4A of the Electricity Act, one of which states as follows:
(14) Notwithstanding the terms or conditions of any community feed-in tariff approval given to a generator by the Minister pursuant to this Section and the regulations before or after the coming into force of this subsection, the approval expires if the generator is not constructed and ready for electrification within
(a) three years from the date of issuance of a community feed-in tariff approval for wind-power generation facilities; […]
The Minister’s decision to grant the extension of Chebucto’s in-service date was made on November 3, 2015. Between that date and the date the Friends of River Road’s appeal was filed with the UARB on December 4, 2015, the Province had tabled on December 1, 2015 the Electricity Plan Implementation (2015) Act for first reading.24 The Electricity Plan Implementation (2015) Act received Royal Assent on December 18, 2015.
Chebucto argued that the term and condition of Chebucto’s COMFIT approval requiring that the project be in-service by a certain date, as extended by the Minister, had been superseded by Section 4A(14)(a) of the Electricity Act.25 As a result, Chebucto argued, the in-service date for the project, being fixed by legislation, was not a decision made by the Minister that was appealable under the Renewable Electricity Regulations.26 Both Chebucto and the Province argued that the Minister’s decision to extend the in-service date was rendered moot by the subsequent amendments to the Electricity Act.27
The UARB considered whether the date from which the three-year time period for the purposes of Section 4A(14)(a) of the Electricity Act should be calculated was from the date of Chebucto’s original March, 2012 COMFIT approval or from the date Chebucto’s COMFIT approval was re-issued on June 10, 2015. The UARB had previously considered a similar re-application and re-issuance of COMFIT approvals in a preliminary decision in the Friends of Harmony case.28 In that preliminary decision, the UARB determined that Affinity’s re-issued approval was in fact a new approval which was appealable under the Renewable Electricity Regulations, which ultimately led to the decision on the merits discussed earlier in this article.
On the basis of the Friends of Harmony preliminary decision, the UARB concluded in the Friends of River Road case that “the original 2012 approval was superseded by the Minister’s new June 10, 2015 approval,” which was not appealed by the Friends of River Road.29 Therefore, the UARB held, “the in-service date for Chebucto’s Project is now deemed by the legislation to be June 10, 2018” and is “no longer based on the decision of the Minister under the Regulations.”30 The UARB considered that it “has not been granted jurisdiction under the Regulations to hear an appeal of the legislatively proclaimed in-service date that now applies” and found that “there is no further issue to be determined in this appeal as between the parties.”31
It is worth noting that this appeal by the Friends of River Road was in fact the second challenge of Chebucto’s project by the Friends of River Road, as the group had previously brought an appeal against Chebucto’s project in 2013, with respect to the issuance of Chebucto’s original March, 2012 COMFIT approval, which the UARB had dismissed for being filed outside of the statutory appeal period.32
Conclusion
Regulators, project proponents and their legal advisors should be aware of these recent developments as these kinds of legal challenges, though unsuccessful in both of these cases, can pose a significant hurdle for projects to overcome. As the Friends of River Road case demonstrates, even projects that have received approval and have successfully avoided an initial challenge may be subject to further challenge during the development stage of the project if the applicable regulatory official subsequently makes what may be considered under the applicable statutory appeal provision to be an “appealable decision” in respect of the project.
The line of cases discussed in this article demonstrates that, notwithstanding their community-based nature, these renewable energy projects can still be subject to opposition and challenge by some members of the communities in which they are being developed. These cases highlight how important the legislative and regulatory regime can be in governing how and when these types of energy projects may proceed. This includes setting out the parameters of the type and level of support that such projects must obtain from the “communities” (however defined) in which those projects are to be located, as well as the avenues that are available to those in opposition to challenge those projects.
While the COMFIT program in Nova Scotia is no longer open to new applicants and the Friends of Harmony and Friends of River Road decisions were based on Nova Scotia’s own unique legislative regime, the considerations in these cases, including issues around standard of review and community support, will undoubtedly be relevant considerations as other energy projects being developed across the Atlantic region and elsewhere inevitably face legal challenges.
Within the last year, the Nova Scotia Utility and Review Board (“UARB”) decided two cases involving appeals to the UARB of wind energy projects being developed under Nova Scotia’s Community Feed-In Tariff (“COMFIT”) Program.
The COMFIT Program was established by the Province of Nova Scotia (“Province”) in 2010 to assist the Province in achieving the renewable energy targets set out in Nova Scotia’s Renewable Electricity Plan.1 Under the Renewable Electricity Regulations2 made pursuant to Nova Scotia’s Electricity Act3, generators that met certain community-based eligibility requirements could apply to the Minister of Energy (“Minister”) for approval of certain renewable energy projects, including those that generate wind power.4
Friends of Harmony Decision
The UARB’s decision in Re Friends of Harmony, Camden, Greenfield and Surrounding Areas upheld the Minister of Energy’s granting of a COMFIT approval to Affinity Wind Limited Partnership (“Affinity”) for a 3.2 MW wind project in Greenfield, Nova Scotia.
The Applicable Standard of Review
The appeal of the Minister’s decision was filed with the UARB by the Friends of Harmony pursuant to the statutory appeal provision contained in the Renewable Electricity Regulations.6 The UARB was required to consider the issue of what type of evidentiary hearing and standard of review should apply on an appeal to an appellate administrative tribunal (in this case, the UARB) of the decision of an administrative decision-maker of first instance (in this case, the Minister). That is, whether the hearing of the appeal of the Minister’s decision by the UARB should be:
based on the record, akin to a judicial review, with the Minister’s decision subject to deference and a reasonableness standard;
a hearing de novo with extraneous evidence admissible and the Minister’s decision subject to a correctness standard; or
something else, such as a hybrid approach “whereby the record before the Minister and the Minister’s decision are given significant weight by the Board, but supplemented by any relevant and useful evidence which may be provided by the parties.”7
Noting that this issue is “a developing area of case law”,8 the UARB concluded that the “hybrid approach” was appropriate,9 referring to Canadian Court cases in which the hybrid approach has received support.10
The UARB considered that a number of factors indicated that deference should be given to the Minister’s decision, including that the issue of approving a renewable energy project fell “squarely within the scope of matters which would normally be expected to fall within this ministerial mandate” and that “the Minister is in a more advantageous position than the Board in assessing the application.”11
Therefore the UARB was of the view that “significant deference should be given to the Minister’s decision and to the evidentiary record before him” and that “a ‘reasonableness’ standard of review should apply.”12 However, while the UARB did not consider that a de novo hearing was appropriate, it did consider that “it may be necessary to expand upon the evidentiary record in some instances in order to provide a greater context to make a finding on any particular issue”.13 Therefore, the UARB concluded that:
The UARB also pointed out that the burden of proof was on the appellants to establish, on a balance of probabilities, that the Minister was wrong in granting the COMFIT approval.15
The Requirement for “Community Support”
The primary ground of appeal advanced by the appellants in the Friends of Harmony case was that the Minister should not have approved the project because the evidence of “community support for the project” required under the Renewable Electricity Regulations16 had not been provided to the Minister. The UARB considered the Department of Energy’s (“Department”) Community Support Policy17 which set out a scoring system for determining whether a proposed project met the community support requirement under the Regulations.
Despite challenge by the appellants of the Department’s Community Support Policy, the UARB upheld the Policy as being permissible under the Renewable Electricity Regulations and was satisfied on the evidence that the project “easily exceeded” the minimum scoring threshold for the project under the Policy.18
The UARB noted that, at the time the Minister granted the COMFIT approval, both the Minister and Department staff were “acutely aware” of the opposition to the project by the appellants, some of whom had written to and/or met with the Minister and/or the Department staff.19 The UARB stated:
[T]here is nothing in the legislation that requires that the application be refused by the Minister if there is community opposition to the proposed COMFIT project, nor is there any indication that community support must outweigh any community opposition in order for a project to warrant the Minister’s approval. In the Board’s view, the Minister adopted a reasonable interpretation of the Regulations, such that if the proposed project garners some community support, then that is sufficient, for the purposes of the Regulations, to allow the Minister to approve the project. The Board finds that this was an interpretation that the Regulations could reasonable bear.20
These comments from the Board are particularly apt as the issue of “social license” is increasingly coming to the fore in respect of proposed energy projects throughout Atlantic Canada and elsewhere.
Friends of River Road Decision
More recently, the UARB decided Re Friends of River Road21 (“Friends of River Road”). The UARB dismissed the appeal by the Friends of River Road of the Minister’s decision to grant an extension of the in-service date for Chebucto Terence Bay Windfield Limited’s (“Chebucto”) 7.05 MW wind project on the basis that the appeal was moot.
Following a review of the COMFIT Program, in August, 2015 the Province announced that the COMFIT Program would no longer be accepting applications for new projects.22 This policy change was implemented by way of the Electricity Plan Implementation (2015) Act23 which added certain subsections to Section 4A of the Electricity Act, one of which states as follows:
The Minister’s decision to grant the extension of Chebucto’s in-service date was made on November 3, 2015. Between that date and the date the Friends of River Road’s appeal was filed with the UARB on December 4, 2015, the Province had tabled on December 1, 2015 the Electricity Plan Implementation (2015) Act for first reading.24 The Electricity Plan Implementation (2015) Act received Royal Assent on December 18, 2015.
Chebucto argued that the term and condition of Chebucto’s COMFIT approval requiring that the project be in-service by a certain date, as extended by the Minister, had been superseded by Section 4A(14)(a) of the Electricity Act.25 As a result, Chebucto argued, the in-service date for the project, being fixed by legislation, was not a decision made by the Minister that was appealable under the Renewable Electricity Regulations.26 Both Chebucto and the Province argued that the Minister’s decision to extend the in-service date was rendered moot by the subsequent amendments to the Electricity Act.27
The UARB considered whether the date from which the three-year time period for the purposes of Section 4A(14)(a) of the Electricity Act should be calculated was from the date of Chebucto’s original March, 2012 COMFIT approval or from the date Chebucto’s COMFIT approval was re-issued on June 10, 2015. The UARB had previously considered a similar re-application and re-issuance of COMFIT approvals in a preliminary decision in the Friends of Harmony case.28 In that preliminary decision, the UARB determined that Affinity’s re-issued approval was in fact a new approval which was appealable under the Renewable Electricity Regulations, which ultimately led to the decision on the merits discussed earlier in this article.
On the basis of the Friends of Harmony preliminary decision, the UARB concluded in the Friends of River Road case that “the original 2012 approval was superseded by the Minister’s new June 10, 2015 approval,” which was not appealed by the Friends of River Road.29 Therefore, the UARB held, “the in-service date for Chebucto’s Project is now deemed by the legislation to be June 10, 2018” and is “no longer based on the decision of the Minister under the Regulations.”30 The UARB considered that it “has not been granted jurisdiction under the Regulations to hear an appeal of the legislatively proclaimed in-service date that now applies” and found that “there is no further issue to be determined in this appeal as between the parties.”31
It is worth noting that this appeal by the Friends of River Road was in fact the second challenge of Chebucto’s project by the Friends of River Road, as the group had previously brought an appeal against Chebucto’s project in 2013, with respect to the issuance of Chebucto’s original March, 2012 COMFIT approval, which the UARB had dismissed for being filed outside of the statutory appeal period.32
Conclusion
Regulators, project proponents and their legal advisors should be aware of these recent developments as these kinds of legal challenges, though unsuccessful in both of these cases, can pose a significant hurdle for projects to overcome. As the Friends of River Road case demonstrates, even projects that have received approval and have successfully avoided an initial challenge may be subject to further challenge during the development stage of the project if the applicable regulatory official subsequently makes what may be considered under the applicable statutory appeal provision to be an “appealable decision” in respect of the project.
The line of cases discussed in this article demonstrates that, notwithstanding their community-based nature, these renewable energy projects can still be subject to opposition and challenge by some members of the communities in which they are being developed. These cases highlight how important the legislative and regulatory regime can be in governing how and when these types of energy projects may proceed. This includes setting out the parameters of the type and level of support that such projects must obtain from the “communities” (however defined) in which those projects are to be located, as well as the avenues that are available to those in opposition to challenge those projects.
While the COMFIT program in Nova Scotia is no longer open to new applicants and the Friends of Harmony and Friends of River Road decisions were based on Nova Scotia’s own unique legislative regime, the considerations in these cases, including issues around standard of review and community support, will undoubtedly be relevant considerations as other energy projects being developed across the Atlantic region and elsewhere inevitably face legal challenges.
*McInnes Cooper was counsel for the independent power producers in both of the decisions discussed in this article.
** Sara Mahaney is an associate lawyer with McInnes Cooper in Halifax, Nova Scotia. Ms. Mahaney advises clients on the regulatory aspects of the Energy and Natural Resources industries, including renewable energy. Sara also co-teaches the Energy Law course at the Schulich School of Law at Dalhousie University.