The recent Alberta and federal elections, resulting in a change of political party at both levels of government, are likely to have significant implications for energy policy and regulation in Canada. Each of the predecessor federal and Alberta governments has, in the past three years, implemented extensive substantive and procedural changes to their relevant regulatory frameworks. The future of these changes may now be in doubt, but at the very least it seems inevitable that the debate around energy policy and regulation, both provincially and federally, will continue to intensify.

Against this background, the lead article in this issue of Energy Regulation Quarterly on “The View From Alberta – Recent Development in Provincial and Interprovincial Energy Policy” by Alan Ross and Lorelle Binnion is a timely contribution to the ongoing dialogue on an important national issue. We expect that the associated regulatory developments will be the subject of ongoing discussion in future issues of ERQ. And while we highlight Alberta here, we note the issues are relevant in many other jurisdictions as well.

Meanwhile, energy regulators and the energy regulation bar must continue to perform their roles within the existing regulatory framework, where the recent amendments to the National Energy Board Act have led to significant procedural changes to the way the NEB conducts its hearings. Specifically, as one measure intended to enable the Board to comply with newly-mandated time limits, the Board has largely eliminated oral cross-examination and imposed other restrictions on the participation rights of third parties. This was a dramatic change from the Board’s past practice, which had generally been to allow oral cross-examination by all parties with intervenor status. Not surprisingly, the change was challenged, on the grounds, inter alia, of denial of procedural fairness and infringement of the Canadian Charter of Rights and Freedoms. With its recent denial of leave to appeal in one of these challenges, the Supreme Court of Canada appears to have put the matter to rest. In their Case Comment, Kemm Yates, Q.C. and Sarah Nykolaishen conclude that the effect of the Supreme Court’s denial of leave to appeal is to uphold the Board’s recent rulings limiting cross-examination; if any further challenge is to be pursued, “it will have to be in Parliament.” This latter conclusion may foreshadow a further revision of the Board’s role, given some of the pre-election comments by the new Prime Minister criticizing the changes to the NEB’s role that had been enacted during the tenure of the outgoing government.

In another procedural decision, the Supreme Court of Canada ruled that it would hear an appeal relating to a claim for damages under section 24 of the Charter. The matter arose from an alleged breach of the plaintiff’s Charter right to freedom of expression by the refusal of the Alberta Energy Regulator (established during the tenure of the outgoing provincial government and the role of which the new Premier has been quoted as suggesting may be reviewed) to accept further communications with respect to a coalbed methane shallow drilling program. The Case Comment by Michael Marion, Michael Massicotte and Alan Ross concludes that the Court’s decision will be of interest to many regulatory and administrative tribunals, particularly with respect to the proper framework for addressing the interplay between statutory immunity provisions and Charter claims for damages against state actors.

Topics of interest to energy regulators and the energy bar are not, however, confined to issues arising from recent and potential future legislative changes. Gordon Kaiser’s article on “Arbitrations Involving Regulated Utilities” provides a comprehensive review of the role of arbitration in energy disputes, particularly its widespread use in commercial disputes compared to its more widely-known use in investor-state disputes. The article discusses the relationship between arbitration and the regulatory regimes to which the parties may be subject and which may give rise to parallel proceedings. The relevant North American jurisprudence is reviewed.

Moin Yahya’s provides a valuable Case Comment on the two recent and much-anticipated decisions of the Supreme Court of Canada on the issue of prudency and reasonableness that is at the core of traditional utility regulation. Yahya concludes that the decisions (one appeal from Ontario and one from Alberta) make clear the Court’s view that the standard of review for regulatory decisions dealing with operating costs is reasonableness and that no specific test is prescribed by the law to be applied by regulators in evaluating whether a utility’s costs could be recovered in the revenue requirement. In Yahya’s words: “Regulatory lawyers should not rely on mechanical tests and characterizations of various costs, but rather should focus on the bigger picture, namely how to achieve just and reasonable rates for all.”

It has been noted in past issues of ERQ that technological developments play a critical role in the evolution of energy markets – and in challenging energy regulators and policy-makers. The emergence of Combined Heat and Power (CHP) technology is a case in point. Gordon Kaiser provides a Case Comment on the recent approval by the California Public Service Commission of the first Distributed Energy Resource Services Tariff. Kaiser concludes that the decision “is the kind of light-handed, efficient regulation required in competitive markets.”

Erica Miller’s Case Comment on a precedent-setting decision of British Columbia’s Environmental Appeal Board granting an appeal overturning a decision to issue a commercial water licence to Nexen Inc. for use in Nexen’s fracking operations in northeastern B.C. On appeal on behalf of members of a First Nation in the area, the Board cancelled the licence on the basis that the terms and conditions were “fundamentally flawed” and on the basis that the Crown had failed to consult in good faith with the First Nation.

This is a banner issue for case comments on Supreme Court of Canada decisions – the issue concludes with one on Chevron v Yaiguaje provided by David A. Crerar and Kalie McCrystal. It does not deal directly with energy regulatory issues. The decision is, however, of general significance for all lawyers advising multinational corporations with activities and assets in Canada (and that would mean many in the energy bar). The Comment describes the decision as confirming that Canadian courts should take a generous and liberal approach to the recognition and enforcement of foreign judgments and that there is no need for an applicant seeking to enforce a foreign judgment in Canada to prove a real and substantial connection between the province where the foreign judgment is sought to be registered and the original underlying dispute that led to the foreign judgment or between the province and the judgment debtor.

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