The Appellant did not demonstrate that the Respondent Board’s decisions regarding applicable management fees were unreasonable and therefore the appeals were dismissed

Administrative law – Decisions of administrative tribunals – Energy and Utilities Board – Management fees – Judicial review – Jurisdiction – Standard of review – Patent unreasonableness – Reasonableness simpliciter

Atco Electric Ltd. v. Alberta (Energy and Utilities Board), [2004] A.J. No. 906, Alberta Court of Appeal, August 16, 2004, Côté, Wittmann and Costigan JJ.A.

The Appellant, Atco Electric Ltd., an electric utility company serving Alberta, is required to offer options to customers for the charges that they must pay to receive electricity. In 2000, Atco filed its first applications under the new regulations for the year 2001. Atco proposed a regulated rate option tariff (the “RROT”) that included a management fee of $4.6 million intended to compensate Atco for providing the regulated rate option. The Alberta Energy and Utilities Board (the “AEUB”) refused to allow Atco to include the management fee in the RROT for 2001. In November 2001, Atco applied for approval of a RROT for 2002 and again sought to include a management fee of $2.5 million. The AEUB again refused to include the management fee. The AEUB held that it was open to considering a management fee if it was demonstrated to have added value to customers. The AEUB declined to review the two decisions and an appeal was taken.

The court noted the four factors involved in considering the standard of review: (1) the presence or absence of a privative clause or statutory right of appeal; (2) the expertise of the tribunal relative to that of the reviewing court; (3) the purposes of the legislation and the provision in particular; and (4) the nature of the question.

The court noted that the AEUB’s decision to refuse to review the two decisions was a discretionary one. The standard of review with respect to those decisions was that of patent unreasonableness. With respect to the AEUB’s interpretation of the provisions regarding the approval of tariffs and its setting of the value-added criterion for management fees, while this issue was in the nature of a question of law, it nevertheless fell squarely within the area of the AEUB’s expertise. Thus, the applicable standard of review on this issue was that of reasonableness simpliciter.

The Court held that it was within the AEUB’s jurisdiction to establish principles to be used to evaluate the non-energy component of the RROT, as the regulations were silent in this regard. The court noted that, having observed its jurisdictional requirements, the AEUB could interpret its constituent legislation and, unless such an interpretation was unreasonable, the court could not intervene. In fulfilling its mandate, and in the absence of any specific legislation, the AEUB was free to define the value-added criterion. Its reasons for doing so, taken as a whole, provided tangible support for its decision and withstood review. The AEUB’s decision on the criterion for the management fee could not be said to be unreasonable. The court held that the Appellant had not shown a basis for the court to intervene in either of the decisions of the AEUB and the appeals were therefore dismissed.

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