Decision 23137-D01-2018 Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement March 8, 2018
Alberta Utilities Commission Decision 23137-D01-2018 Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement Proceeding 23137 March 8, 2018 Published by Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: 403-592-8845 Fax: 403-592-4406 Website: www.auc.ab.ca
Contents 1 Introduction... 1 2 Commission findings... 2 2.1 Consumers Coalition of Alberta... 2 3 Order... 5 ii Decision 23137-D01-2018 (March 8, 2018)
Alberta Utilities Commission Calgary, Alberta Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement Decision 23137-D01-2018 Proceeding 23137 1 Introduction 1. In this decision, the Alberta Utilities Commission considers an application (the costs claim application) by the Consumers Coalition of Alberta for approval and payment of its costs of participation in Proceeding 22274 1 (the original proceeding). The following table sets out the costs claimed and the amounts awarded. Claimant Total Fees Claimed Total Disbursements Claimed Total GST Claimed Total Amount Claimed Total Fees Awarded Total Disbursements Awarded Total GST Awarded Total Amount Awarded CCA Wachowich & Company $18,550.00 $0.00 $927.50 $19,477.50 $18,550.00 $0.00 $927.50 $19,477.50 Bema Enterprises Ltd. $34,646.95 $0.00 $1,732.35 $36,379.30 $17,323.48 $0.00 $866.17 $18,189.65 Grid Power Development and Design Inc. $278,963.50 $0.00 $13,948.18 $292,911.68 $139,481.75 $0.00 $6,974.09 $146,455.84 Total $332,160.45 $0.00 $16,608.02 $348,768.47 $175,355.23 $0.00 $8,767.76 $184,122.99 2. The Commission has awarded the applicant costs in an amount less than the amount claimed for the reasons set out below. 3. The original proceeding was convened by the Commission to consider whether to approve the needs identification document (NID) application filed by the Alberta Electric System Operator (AESO) for the transmission system reinforcement in the Provost to Edgerton and Nilrem to Vermilion area (PENV area). The original proceeding was conducted in writing and included information requests (IRs), IR responses, written evidence, argument and reply argument. The close of record of the original proceeding was October 25, 2017 and the Commission issued Decision 22274-D01-2018 2 on January 12, 2018. 4. The CCA submitted its costs claim application on November 24, 2017 within the 30 day timeline permitted by the Commission s rules. The Commission assigned Proceeding 23137 and Application 23137-A001 to the costs claim application. 1 Proceeding 22274: Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement 2 Decision 22274-D01-2018: Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement, Proceeding 22274, January 12, 2018. Decision 23137-D01-2018 (March 8, 2018) 1
Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement 5. No comments were filed with respect to the costs claim application and the Commission considers the close of record for this proceeding to be December 8, 2018, the deadline for filing comments. 2 Commission findings 6. The Commission s authority to award costs for participation in a needs identification document proceeding is found in Section 21 of the Alberta Utilities Commission Act. 7. When considering a claim for costs for a NID application, the Commission is also guided by the factors set out in Section 11 of Rule 022: Rules on Costs in Utility Rate Proceedings (Rule 022). Rule 022 applies to hearings or proceedings for rate applications of utilities under the jurisdiction of the Commission or related to rate applications. Although NID applications are not rate applications, they are related to rate applications because if a project proposed in a NID application is ultimately approved, the costs of that project will be paid by ratepayers. The Commission will apply Rule 022 to a cost claim filed by an intervener in a NID proceeding when that intervener s participation in the proceeding is premised on the potential impact of the NID on rates and ratepayers. In the Commission s view, this approach is consistent with its broad statutory authority under Section 21(1) of the Alberta Utilities Commission Act to grant cost recovery for any hearing or proceeding before it. 8. The factors in Section 11 of Rule 022 include, among other things, whether eligible participants costs claims are reasonable and directly and necessarily related to the original proceeding, and whether the participants acted responsibly and contributed to a better understanding of the issues before the Commission. Appendix A of Rule 022 prescribes a Scale of Costs applicable to all costs claimed. 2.1 Consumers Coalition of Alberta 9. The following table summarizes the CCA s costs claim: Claimant Hours Preparation Attendance Argument Fees Disbursements GST Total CCA Wachowich & Company 43.50 0.00 9.50 $18,550.00 $0.00 $927.50 $19,477.50 Bema Enterprises Ltd. 121.31 0.00 35.45 $34,646.95 $0.00 $1,732.35 $36,379.30 Grid Power Development and Design Inc. 991.57 0.00 73.88 $278,963.50 $0.00 $13,948.18 $292,911.68 Total 1,156.38 0.00 118.83 $332,160.45 $0.00 $16,608.02 $348,768.47 10. The Commission finds that the CCA acted responsibly in the original proceeding and contributed to the Commission s understanding of some relevant issues. However, the Commission is unable to approve the full amount of the costs claimed in respect of the services performed by Bema Enterprises Ltd. (Bema) and Grid Power Development and Design Inc. (Grid Power) for the reasons set out below. 2 Decision 23137-D01-2018 (March 8, 2018)
Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement Wachowich & Company 11. The CCA was represented by Wachowich & Company in the original proceeding. The fees claimed by the CCA for the legal services provided by James Wachowich relate to reviewing the application, reviewing draft IRs, reviewing draft evidence and reviewing argument and reply argument. 12. The Commission finds that the services performed by Wachowich & Company were directly and necessarily related to the CCA s participation in the original proceeding, and that the fees, which were claimed in accordance with the Scale of Costs for those services, are reasonable. Accordingly, the Commission approves the CCA s claim for legal fees for Wachowich & Company in the amount of $18,550.00 and GST of $927.50 for a total of $19,477.50. Bema Enterprises Ltd. 13. The CCA retained Bema to perform consulting services in the original proceeding. The CCA s evidence in the original proceeding was prepared under the direction of Dan Levson from Bema, with support from Bema staff. 14. The fees claimed for Bema are for consulting services provided by Dustin Madsen, Dan Levson, David Provins, Kris de Palezieux and Nancy Thomas. Those services included reviewing the application, drafting IRs, reviewing IR responses, drafting IR responses, drafting evidence, reviewing rebuttal evidence, drafting argument and reply argument, reviewing argument from other parties and various administrative services. 3 15. While the Commission is satisfied that some evidence provided by Bema contributed to a better understanding of some of the issues raised in the proceeding, it found that a significant portion of the evidence prepared by Bema was unhelpful because it did not directly address the AESO s NID application. The Commission has reduced the fees awarded to Bema by 50 per cent for the reasons that follow. 16. In the evidence prepared by Bema, the CCA stated that its main purpose was to provide context to the Commission on the CCA s high-level concerns regarding the Application. 4 The CCA stated that the relief it seeks arising from its evidence, which is largely contextual, is for the Commission to increase the scrutiny and due diligence on new facilities proposed to address identified needs. 5 17. A significant portion of the CCA s evidence provided general contextual information to the Commission on the CCA s concerns with the high cost of transmission service in Alberta, including comparisons to other provinces, explanations of province-wide increases in costs over time and their impact on rates, and general comments on the factors that the CCA views as having caused such costs. 3 12.35 hours were claimed by Ms. Nancy Thomas for administrative services. 4 Exhibit 22274-X0138, CCA Evidence, PDF Page 5, Paragraph 8. 5 Exhibit 22274-X0138, CCA Evidence, PDF Page 6, Paragraph 10. Decision 23137-D01-2018 (March 8, 2018) 3
Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement 18. Notably absent from large portions of the CCA s evidence 6 is a discussion of concerns specific to the PENV area. The CCA evidence prepared by BEMA relating to the AESO s energy and load forecasts is limited to three paragraphs. 7 The Commission finds that those portions of the CCA s evidence that outlined its general concerns with the cost of transmission in Alberta provided no assistance to the Commission in its assessment of the merits of the NID application for the PENV area. More specifically, this information did not assist the Commission in determining if the AESO s assessment of need for the PENV area was technically deficient or if approval of the NID was in the public interest. 19. The Commission approves the remainder of the CCA s claim for consulting fees attributable to Bema in the amount of $17,323.48 and GST of $866.17 for a total of $18,189.65. Grid Power Development and Design Inc. 20. The CCA stated that it retained Grid Power to address matters of a more technical nature. 8 The fees claimed for Grid Power are for consulting services provided by Trevor Cline and Chris Codd. Those services appear to be similar to those performed by Bema and included reviewing the application, drafting IRs, reviewing IR responses, drafting evidence and drafting argument and reply argument. 21. While the Commission is satisfied that some of the evidence provided by Grid Power contributed to a better understanding of some of the issues raised in the proceeding, it found other aspects of its evidence to be unhelpful. The Commission also finds that the fees claimed on behalf of Grid Power are disproportionate to the benefit provided and has reduced the fees awarded to Grid Power by 50 per cent. The Commission s reasons for this reduction follow. 22. The CCA, relying on evidence prepared by Grid Power, expressed a number of concerns with the AESO s assessment of need in the PENV area. A significant concern was the accuracy of the AESO s load forecast and its reliance in the NID on the AESO s 2016 long term outlook. Grid Power emphasized that the AESO should have updated its load forecast in the NID following its release of its 2017 long term outlook which reflected a significant reduction in load growth compared to 2016. Other concerns raised by Grid Power were the AESO s decision to pursue a transmission option over a non-wires solution and the dispatch scenarios used by the AESO. Grid Power also conducted a detailed assessment of transmission alternatives to address the NID in the PENV area. 23. While the Commission ultimately decided to refer the NID back to the AESO to resolve the uncertainty about the magnitude and timing of need in the PENV area resulting from the material difference between the AESO s 2016 and 2017 load forecasts, it rejected the positions put forward by Grid Power in relation to non-wires solutions and dispatch scenarios. 9 24. The Commission rejected the non-wires solution proposed by Grid Power because it did not meet the criteria in the Transmission Regulation for a non-wires solution. In the Commission s view, Grid Power, as an expert in transmission planning, should have been aware 6 Exhibit 22274-X0138, CCA Evidence, PDF Pages 6-15; PDF Pages 17-20, Paragraphs 24-35. 7 Exhibit 22274-X0138, CCA Evidence, PDF Pages 16-17, Paragraphs 20-22. 8 Exhibit 22274-X0138, CCA Evidence, paragraph 7. 9 Decision 22274-D01-2018, paragraphs 60-62. 4 Decision 23137-D01-2018 (March 8, 2018)
Provost to Edgerton and Nilrem to Vermilion Transmission System Reinforcement that a non-wires solution was inconsistent with the statutory requirements and ought not to have pursued that matter. 25. Similarly, the Commission rejected Grid Power s critique of the dispatch scenarios used by the AESO. The Commission finds that Grid Power focused unreasonably on one of the bookend scenarios used by the AESO in this analysis and failed to consider the context in which that scenario was used. Accordingly, the Commission did not consider Grid Power s pursuit of this issue to be reasonable or beneficial. 26. The Commission also finds that Grid Power s assessment of potential future system developments to address the need identified in the PENV area far exceeded what was reasonable in the circumstances. In that regard, the Commission notes the overall magnitude of the claim advanced on behalf of Grid Power. It claimed $292,911.68 for 1,065.45 total hours of work in relation to Proceeding 22274. The Commission considers this sum to be exceptional, given that Proceeding 22274 was conducted in writing and related to a relatively straightforward NID application. 27. The Commission finds that the fees claimed by Grid Power are not commensurate with the value of the work performed and its contribution to the Commission s determination of the issues in the original proceeding. Having regard to the foregoing, it awards Grid Power 50 per cent of the fees claimed. The Commission therefore approves the claim for Grid Power in the amount of $139,481.75 and GST of $6,974.09 for a total of $146,455.84. Total amount awarded 28. For the reasons provided above, the Commission approves the CCA s claim for recovery of costs in the total amount of $184,122.99. This amount is composed of legal fees of $18,550.00, consulting fees of $156,805.23 and GST of $8,767.76. 3 Order 29. It is hereby ordered that: 1) The shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $184,122.99. 2) The shall record in its Regulatory Process Costs account the approved intervener amount of $184,122.99. Dated on March 8, 2018. Alberta Utilities Commission (original signed by) Anne Michaud Panel Chair Decision 23137-D01-2018 (March 8, 2018) 5