Court of Appeal of Alberta Provides Guidance on Considering Indigenous interests in AUC decisions

In Altalink Management Ltd v Alberta (Utilities Commission), 2021 ABCA 342, the Court of Appeal of Alberta provided valuable guidance regarding energy regulation and Indigenous economic interests.

Altalink Management Ltd. ("Altalink") built transmission lines through the Blood Tribe's and the Piikani Nation's reserve lands. Rather than entering into a typical Impact Benefit Agreement, the two Nations were given an irrevocable option to acquire a minimum of 30% to a maximum of 51% interest in the transmission lines on their lands.

The Parties chose to exercise their options to purchase a 51% interest in the transmission lines on their lands. They effected those purchase options by forming a limited partnership between Altalink and corporate representatives of the Nations.  

Altalink, as general partner of the limited partnerships, filed applications to the Alberta Utilities Commission (the "Commission") to approve the sale and transfer of the interests in the transmission lines. The Commission approved the transfers on the condition that neither of the limited partnerships could recover $60,000 in external auditor and hearing costs incurred for the regulatory proceedings from ratepayers (the customers) as part of their tariffs.

The Commission determined that the $60,000 could not be included after applying its "no-harm test," which weighs the positive and negatives of a transfer on ratepayers to determine whether the transfer is in the public interest. If ratepayers may be harmed, the Commission considers if it can mitigate that harm by subjecting the transfer to conditions.

The Commission found that the ratepayers would not have to bear any associated costs for external auditors and hearing costs if Altalink continued to operate the assets without the Nations' interests in the transmission lines. The Commission considered this fact a negative for the ratepayers with no added benefit. It rejected the arguments that the savings from rerouting the transmissions lines through the reserve lands amounted to $32 million and that there were three intangible benefits from the partnership, namely:

"1) Access to the First Nations workforce; 2) Strengthening Altalink's relationship with other First Nations in Canada and the United States; and 3) supporting the alignment of interests between Altalink and the First Nations to enhance the long-term safe and reliable operation of utility assets on their reserve land."[1]

Ultimately, the Commission concluded that the "no-harm test" was forward-looking and could not consider the $32 million dollars in savings. It also held that there was insufficient evidence to support the intangible benefits. Therefore, these benefits do not offset the harm of increased costs for ratepayers.

Altalink appealed to the Court of Appeal of Alberta. The majority decision of the Court of Appeal held that the Commission erred by only viewing the "no-harm test" as forward-looking. The Court found that there was no legislative justification for doing so.

The Majority also held that "projects that increase the likelihood of economic activity on a reserve ought to be encouraged" as they are in the public interest.[2]

Justice Feehan concurred with the Majority's reasons but further addressed Altalink's submissions that the Commission is obligated to consider the honour of the Crown and reconciliation when it engages with Indigenous collectives or their governance entities.

On the honour of the Crown, Justice Feehan noted that the Commission has a duty to consider and uphold it where it is relevant to the public interest. This responsibility is to be understood generously and purposively, not narrowly or technically.

Justice Feehan further stated that reconciliation must be incorporated in any consideration of the public interest or public goals. Notably, Justice Feehan stated:

[121]      An administrative tribunal with a broad public interest mandate, such as the Commission, must address reconciliation as a social concept of rebuilding the relationship between Indigenous peoples and the Crown by considering the concerns and interests of Indigenous collectives. This includes consideration of the interests of Indigenous peoples in participating freely in the economy and having sufficient resources to self-govern effectively.[3]

Justice Feehan's reasons also demonstrate an interesting way in which the United Nations Declaration on the Rights of Indigenous People[4] is being incorporated into jurisdictions, such as Alberta, where it has not been officially implemented. He suggests that bodies, like the Commission, can look towards UNDRIP as a tool to inform themselves of a fuller understanding of reconciliation.

Overall, both the Majority and the Concurring opinions held that Indigenous economic activity is in the public interest and must be considered by public decision-makers, such as the Commission. While it is unclear how far-reaching Justice Feehan's concurrence will be, regulators must be alive to special considerations of Indigenous economic activity and incorporate those special considerations into their decision-making when considering their public interest mandates.

[1] Altalink Management Ltd v Alberta (Utilities Commission), 2021 ABCA 342 at para 37.

[2] Altalink Management Ltd v Alberta (Utilities Commission), 2021 ABCA 342 at para 59.

[3] Altalink Management Ltd v Alberta (Utilities Commission), 2021 ABCA 342 at para 121.

[4] GA Res 61/295, UNGAOR, 61st Sess, Sup No 53, UN Doc A/61/295 (2007) 1 [UNDRIP].