Executive Summary: Key Legal and Evidentiary Issues

• The authority of the Alberta Utilities Commission (AUC) to retroactively adjust 2022 rates and direct refunds to customers was challenged.

• The interpretation and application of the Electric Utilities Act, Gas Utilities Act, and legal ratemaking principles were central to the appeal.

• Allegations were made that the AUC engaged in impermissible retroactive or retrospective ratemaking.

• Concerns were raised regarding whether ATCO Utilities were afforded procedural fairness in the remedy phase.

• The Court considered whether the issues raised were of significance to regulatory practice and the specific proceeding.

• The Court determined that the grounds for appeal raised serious arguable points warranting appellate review.

Background and facts of the case

ATCO Gas and Pipelines Ltd. and ATCO Electric Ltd. (together, “ATCO Utilities”) applied for permission to appeal the Alberta Utilities Commission (AUC) Decision 29064-D01-2025 (the “Remedy Decision”) under section 29 of the Alberta Utilities Commission Act, SA 2007, c A-37.2 (AUCA). The AUC had initiated a reopener proceeding of the 2018–2022 performance-based regulation (PBR) plans for the ATCO Utilities. The reopener proceeding was divided into two phases, resulting in two decisions: Decision 28300-D01-2024 (the “Reopener Decision”), which reopened the PBR plans because they did not operate as intended, and the Remedy Decision, which determined the appropriate remedy.

The Remedy Decision retroactively adjusted the 2022 rates and directed a refund to customers from a portion of ATCO Utilities’ 2022 revenues. ATCO Utilities had already been granted permission to appeal the Reopener Decision.

Policy terms and statutory clauses at issue

The application for permission to appeal was made under section 29(1) of the AUCA, which allows an appeal on a question of law or jurisdiction with permission of a justice of the Court. The relevant statutes included the Electric Utilities Act, SA 2003, c E-5.1 (EUA), and the Gas Utilities Act, RSA 2000, c G-5 (GUA), as well as legal PBR ratemaking principles. ATCO Utilities argued that the Remedy Decision was contrary to these statutes and principles and that the AUC failed to consider the relevant factors identified in the acts.

Arguments and grounds for appeal

ATCO Utilities raised three grounds of appeal:
(i) Whether the AUC erred in its interpretation of the EUA, GUA, and legal PBR ratemaking principles;
(ii) Whether the AUC erred by engaging in retroactive or retrospective ratemaking, contrary to the relevant acts and legal PBR ratemaking principles;
(iii) Whether the AUC failed to meet the requirements of procedural fairness in the remedy proceeding.

The Office of the Utilities Consumer Advocate submitted that the errors alleged in the Remedy Decision duplicated the grounds on which permission to appeal was already granted in the Reopener Permission to Appeal Decision or otherwise lacked merit. The AUC made no submissions on the substance of the application.

Ruling and outcome

Justice William T de Wit found that the grounds raised by ATCO Utilities were questions of law that raised a serious arguable point. The Court noted that whether a retroactive adjustment of rates is an available remedy for the AUC following a reopening proceeding is a question of sufficient significance to the practice and to the action itself. The Court disagreed with the argument that permission to appeal should be dismissed as duplicative, finding that the Remedy Decision and Reopener Decision, while related, warranted being heard together. The Court granted permission to appeal on the grounds referenced above. No specific monetary amount was ordered or awarded in this decision, as the ruling was limited to granting permission to appeal.