Chief Mountain Gas Co-op Ltd. and County of Cardston

Utility Cost Order 2008-067 Chief Mountain Gas Co-op Ltd. and County of Cardston Cost Awards

ALBERTA UTILITIES COMMISSION Utility Cost Order 2008-067: Chief Mountain Gas Co-op Ltd. and Cardston County Application No. 1512940 Cost Application No. 1576002 Published by Alberta Utilities Commission Fifth Avenue Place, 4th Floor, 425-1 Street SW Calgary, Alberta T2P 3L8 Telephone: (403) 592-8845 Fax: (403) 592-4406 Web site: www.auc.ab.ca

Contents 1 INTRODUCTION... 1 2 VIEWS OF THE PARTIES... 1 3 VIEWS OF THE COMMISSION AUTHORITY TO AWARD COSTS... 3 4 VIEWS OF THE COMMISSION - ASSESSMENT... 4 5 ORDER... 5 AUC Utility Cost Order 2008-067 i

ALBERTA UTILITIES COMMISSION Calgary, Alberta Utility Cost Order 2008-067 Chief Mountain Gas Co-op Ltd. and Cardston County Application No. 1512940 Cost Application No. 1576002 1 INTRODUCTION On May 23, 2007, Chief Mountain Gas Co-op Ltd. (Chief Mountain) applied to the Alberta Energy and Utilities Board (EUB or the Board), pursuant to Section 45 of the Municipal Government Act (MGA), for approval of a franchise agreement (Franchise Agreement) negotiated with Cardston County (the County) in respect of two specific areas within the municipal boundary of the County (Application). On February 5, 2008, the Alberta Utilities Commission (AUC or Commission) notified parties that the Application would continue to be considered by the Commission, as no Notice of Hearing had been issued by the EUB. The Commission considered the Application by way of a written process, with Argument and Reply Argument due on April 11, 2008 and May 2, 2008, respectively. The panel assigned to consider the Application consisted of Mr. T. McGee (Presiding Member), Mr. N. Allen Maydonik, Q.C. (Member), and Mr. T. Beattie, Q.C. (Member). The Commission considered the record of the Application to have closed on May 2, 2008. The Commission issued Decision 2008-065 on July 31, 2008. The deadline for cost claims for this application was June 1, 2008. ATCO Gas was the only participant to submit cost claims. On June 20, 2008, a summary of the costs being claimed was circulated to interested parties. Parties were advised that any comments regarding the figures listed in the summary or the merits of the total costs claimed were to be filed by June 27, 2008. The Board received comments from Chief Mountain and the County, collectively known as the Counties. On June 30, 2008 parties were invited to respond to the Counties comments by July 7, 2008. The Board received responses from ATCO Gas on July 7, 2008. Accordingly, the Board considers, for the purposes of this cost order, the cost process to have close on July 7, 2008. 2 VIEWS OF THE PARTIES On June 27, 2008, the Counties submitted comments regarding ATCO Gas (AG) cost claim. The Counties submitted that AG s participation in the proceeding was to protect and advance its own business and commercial interests and, therefore, should be ineligible for a costs award. The Counties also submitted that although the local intervener definition and Rule 022 does not apply in this Proceeding, that some restriction should be applied in this situation. AUC Utility Cost Order 2008-067 1

Chief Mountain Gas Co-op Ltd. & Cardston County The Counties made reference to the Alberta Utilities Commission Act, R.S.A. 2000, C. A-37.2, (AUC Act) Sections 21 and 22. The Counties stated the following: A local intervener is defined as a party with certain interests in land that may be affected by particular types of proceeding, namely applications to operate hydro developments, power plants, or transmission lines under the Hydro and Electric Energy Act or a gas utility pipeline under the Gas Utilities Act. Despite the definition of local intervener in section 22(1), section 22(2) states that the Commission may make rules pertaining to costs awards for local interveners in other proceedings of the Commission which suggests that a local intervener may be involved in proceedings other than those outlined in section 22(1). The Counties noted that AG is not a local intervener as defined under Section 22 (1) of the AUC Act because AG does not have an interest in, and occupation of, or entitlement to occupation of any lands that were the subject matter of this proceeding. Further, the Counties noted that its Franchise Agreement Application is not a rate application; as such AUC Rule 022: Rules on Intervener Costs (Rule 022) does not apply. The Counties submitted that cost awards are not intended to cover large and wealthy corporations such as AG, but to aid customers who cannot individually cover their own costs. The Counties noted that AG has the means to fund its own participation in this proceeding. Lastly, the Counties submitted that AG s participation did not contribute to a better understanding of the issues before the Commission and its claim of $16,000 is excessive and unreasonable. On July 7, 2008, AG filed a response to the Counties comments regarding its cost claim. AG submitted that the AUC Act permits AG to claim, and the Commission to award (under Section 21), its costs incurred in this Application. With regards to the Counties submission that AG is not a local intervener, AG confirmed that it was not a local intervener within the meaning of the AUC Act and that Rule 022 does not apply in the present Application. AG submits that Rule 022 states the rules apply to hearings or proceedings of rate applications for utilities under the jurisdiction of the Commission or related to rate applications. AG noted that the Commission s power to award costs is not limited to those hearings or proceedings involving local interveners or rate applications or matters related to rate application. AG submitted that no where in the AUC Act does it limit the application of section 21(1) thereof to circumstances that fall specifically within Rule 022 or that relate to local intervener costs, and further that the AUC Act cannot be construed in such a way to restrict it from the right to claim costs. 2 AUC Utility Cost Order 2008-067

Chief Mountain Gas Co-op Ltd. & Cardston County With respect to the Counties comment that AG s participation was to protect and advance its own business and commercial interests and should therefore be ineligible for a costs award, AG submitted that the Counties had no basis to submit that comment. AG noted that the Counties submitted that Rule 022 did not apply in this Proceeding; however it relies on section 3(1) (d) of Rule 022 for proposition that a utility intervening in another utility s application is considered to have a business interest. AG submitted that there is no basis for the assertion that AG is participating to protect or advance its business interest because Rule 022 does not apply. As well, AG submitted that it is not a utility intervening in another utility s application because the Counties are not utilities. Regarding the Counties submission that cost awards are not intended to cover large and wealthy corporations but to aid customers who cannot individually cover their own costs, AG submitted that this is historically inaccurate. AG provided previous examples of cost orders approving costs in the favor of AG. Utility Cost Orders 2008-032, 2008-035, and 2008-037, all approved costs in the favor of AG. With respect to the Counties submission that AG did not contribute to a better understanding of the issues before the Commission, AG submitted the following. As is set out in ATCO Gas cost claim submission, the County s Application proposed to grant natural gas service rights to the Co-op. ATCO Gas brought to the Commission s attention that the said service rights had already been granted to ATCO Gas, and that the EUB had approved the agreements granting those service rights. ATCO Gas provided the Commission with information regarding the granting of those service rights to ATCO Gas by each of the Town of Cardston and the Town of Magrath and provided copies of those agreements. Finally, AG submitted that its cost claims are in accordance with the scale of costs set out in Rule 022, and that its costs are significantly less than the amounts actually incurred for legal fees and costs in relation to this Proceeding. AG requested that its cost claims be approved in full. 3 VIEWS OF THE COMMISSION AUTHORITY TO AWARD COSTS The Commission notes that there exist no statutory provisions or Commission Rule to deal with cost claims for these types of applications. However, under subsection 21(1) of the AUC Act the Commission has broad discretion to award costs. Section 21 states: The Commission may order by whom and to whom its costs and any other costs of or incidental to any hearing or other proceeding of the Commission are to be paid. Given the nature of the Application and the reasons for AG South s participation in the Application, the Commission exercises its discretion and finds AG South eligible to claim costs. In accordance with Section 21, as stated above, the Commission directs AG South to apply its costs incurred in this application against AG South s Hearing Cost Reserve Account. AUC Utility Cost Order 2008-067 3

Chief Mountain Gas Co-op Ltd. & Cardston County Before exercising its discretion to award costs under the section 21(1) of the AUC Act, the Commission must consider whether the participant acted responsibly and contributed to a better understanding of the issues before the Commission, and whether the costs claimed are reasonable and directly and necessarily related to the proceeding. The Commission considers these factors in light of the scope and nature of the issues in question. In the Commission s view, the responsibility to contribute positively to the process is inherent in the choice to intervene in a proceeding. The Commission expects that those who choose to participate will prepare and present a position that is reasonable in light of the issues arising in the proceeding and necessary for the determination of those issues. To the extent reasonably possible, the Commission will be mindful of participants willingness to co-operate with the Commission and other participants to promote an efficient and cost-effective proceeding. As the costs of a utility proceeding are generally passed on to customers, it is the Commission's duty to ensure that customers receive fair value for a party s contribution. As such, the Commission only approves those costs that are reasonable and directly and necessarily related to the party's participation in the proceeding. 4 VIEWS OF THE COMMISSION - ASSESSMENT The Commission received a cost claim from AG South totaling $16,271.34. AG South claims legal fees incurred by Bennett Jones in the amount of $16,261.00, together with disbursements of $10.34. The Commission has considered the costs submitted by AG South. While AUC Rule 022 is not applicable to this Cost Application, in the interests of fairness and consistency, the Commission assessed the costs submitted by AG South in accordance with the scale of costs set out in Rule 022. The Commission finds that the participation of AG South was effective and of assistance in reviewing the Application. The Commission notes the scope and complexity of the issues before it and the extent of the examination thereof. The Commission also notes that the claims for professional fees and other claims were in accordance with the Scale of Costs. Accordingly, the Commission considers the claims for fees and disbursements for AG South to be reasonable in the total amount of $16,271.34. 4 AUC Utility Cost Order 2008-067

Chief Mountain Gas Co-op Ltd. & Cardston County 5 ORDER IT IS HEREBY ORDERED: 1. ATCO Gas South external costs in the amount of $16,271.34 are approved. 2. ATCO Gas South shall record in its Hearing Cost Reserve Account the allowed external applicant costs in the amount of $16,271.34. Dated in Calgary, Alberta on this 15 th day of December, 2008. ALBERTA UTILITIES COMMISSION <Originally Signed By Thomas McGee> Thomas McGee Commission Member <Originally Signed By Tudor Beattie, Q.C.> Tudor Beattie, Q.C. Commission Member <Originally Signed By N. Allen Maydonik, Q.C.> N. Allen Maydonik, Q.C. Commission Member AUC Utility Cost Order 2008-067 5