Controversy and complexity continue to increase around the current political and legal environment for energy regulation. This is well reflected in the several Comments in Issue #4 of Energy Regulation Quarterly, particularly those relating to the prevalent themes of aboriginal rights and environmental assessment.

Nigel Bankes comments on the federal government’s approval of Enbridge’s Northern Gateway Project. He reports that the Joint Review Panel Report,1 recommending approval of the project subject to 209 conditions, is the subject of five applications for judicial review. In addition, the Order in Council directing the National Energy Board (NEB) to grant certificates of public convenience and necessity for the project is the subject of nine further applications under section 55 of the National Energy Board Act.2 The latter will test the responsibilities of the Governor in Council when deciding on recommendations by the NEB for approval of federal pipeline projects under the NEB Act as amended in 2012.

Bankes’ report on challenges to the Northern Gateway decision is to be considered along with the comment by Terri-Lee Oleniuk, Jennifer Fairfax, and Patrick G. Welsh on the decision of the Federal Court of Canada to revoke the Licence issued to Ontario Power Generation to construct new nuclear generation units at the existing Darlington nuclear facility. The Court ordered that the environmental assessment (EA) under the Canadian Environmental Assessment Act be returned to the appropriate panel for further consideration, including addressing certain “gaps” in the analysis undertaken in the EA.

In addition to these Comments on specific projects, Richard King, Sylvain Lussier and Jeremy Barretto comment on the recent Tsilhqot’in decision of the Supreme Court of Canada on aboriginal title.3 They note that the decision has been referred to variously as “historic”, a “game-changer” and a “landmark” decision. Their conclusion: “Historic? Yes; A game-changer?  Not necessarily.”

Meanwhile, challenges to regulatory decisions on other substantive and procedural grounds continue. Gordon Kaiser comments on two appeals to the Supreme Court of Canada of decisions of the Ontario Energy Board and of the Alberta Energy and Utilities Board involving the prudence doctrine. Jim Smellie reviews the Utility Asset Disposition decision of the Alberta Utilities Commission. Nigel Bankes comments on what he reports is likely the first of many procedural challenges in  “hotly contested” litigation between the Alberta Market Surveillance Administrator and TransAlta, arising from serious charges of market manipulation.

In light of the number and range of challenges reflected in these Comments, it might be asked whether any regulatory decision today will escape judicial review or procedural challenges. As noted, many challenges revolve around environmental assessment and aboriginal rights, to which must be added the related issue of participation in the regulatory process. These are complex issues and their dominance of much of the regulatory process is not likely to diminish any time soon.

As discussed in the editorial for Issue #3 of ERQ, yet other challenges for regulators continue to stem from evolving technological developments. Hugo Schotman’s article on Smart Grids: A European Regulatory Perspective provides an overview of the approach to one such development by the Council of European Energy Regulators.

In this dynamic environment, it is tempting to suggest that we face a new world of energy regulation in which things really are different from the past. There is no denying that energy regulation has been thrust into the political and judicial arenas to an unprecedented degree. The demands on the system – and expectations of it – present increasingly complex challenges and, many would say, heighten regulatory uncertainty. In many respects, the world of energy regulation is different in today’s environment, with some observers questioning the role of regulators.

Against this background, there is some reassurance to be found in reading the lead article by Gaétan Caron, the recently-retired Chair of the National Energy Board, reflecting on his 35-year career with the Board under the title Preparing for the future of federal energy regulation in Canada: What is the past telling us? M. Caron joined the Board as a junior engineer in 1979 and rose through various executive positions with the Board before being appointed Chair and CEO. M. Caron says that what has changed greatly over his 35 years with the Board is how Canadians interact with the NEB. His overall conclusion, however, is perhaps surprising (including to himself) and is worth repeating:

I began writing this article expecting to demonstrate how different federal energy regulation is today compared to 35 years ago. Although some bells and whistles have changed, I have found the opposite: the very essence of regulation, its benefits to Canadian society, the values underpinning it, the principles providing its foundations, have not changed in 35 years, and will not likely change by much in the foreseeable future. This bodes well for the future of public interest determinations and the Canadian public interest.

Agree with the specific conclusion or not, the energy regulatory community should take some comfort from the view that there is an underlying, enduring benefit to society at large from sound, principled regulation.

  1. The JRP Report was the subject of a Comment in Issue #3 of ERQ.
  2. RSC 1985, c. N-7 (as amended) (NEB Act). The NEB has since issued the certificates.
  3. Tsilhqot’in Nation v. British Columbia, 2014 SCC 44.

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