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Alberta Utilities Commission 100 years of service to Alberta

1915 - 2015


Alberta Utilities Commission 100 years of service to Alberta 1915 - 2015


Copyright Š Alberta Utilities Commission, 2015 All rights reserved Produced by: Alberta Utilities Commission, Calgary, Canada Historical researcher and author: Melissa Glass 2015/1 Printed in Canada by West Canadian Digital Imaging Inc. Canadian Cataloguing in Publication Data Available ISBN: 978-1-77136-354-9 Front cover image: City of Calgary, Corporate Records, Archives CalA910612010 Inside cover image: City of Calgary, Corporate Records, Archives CalA910618012 Chapter cover image: Glenbow Archives, NC-50-332 Back cover image: City of Calgary, Corporate Records, Archives CalA910611011

www.auc.ab.ca

10 0 y e a r s of service to Alberta


Dedication To all of our employees — past, present and future.

Acknowledgements The Alberta Utilities Commission expresses its gratitude to Melissa Glass for her extensive time, research and dedication to our centennial book, Alberta Utlities Commission 100 years of service to Alberta 1915 - 2015. The Commission also thanks those individuals that appear throughout the book that offer opinions, stories and perspectives that provide a more in-depth look at our history. The Alberta Utilities Commission extends its thanks the following organizations for their contributions: The Glenbow Museum Archives Provincial Archives of Alberta The City of Calgary, Corporate Records, Archives City of Edmonton Archives Edmonton Power Historical Foundation Alberta Electric System Operator ATCO Gas ATCO Electric Capital Power Corporation TransAlta Corporation Finally, the Alberta Utilities Commission extends its thanks to staff that assisted with the editing, designing and production of this book.


CONTEN

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A letter from Alberta’s Premier

07

A letter from Alberta’s Minister of Energy

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Inception (1915 - 1959)

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Progression (1959 - 1989)

41

Evolution (1995 - 2008)

58

Innovation (Present)

78

List of past chairs

90

Employees on the next 100 years

92

Afterword by AUC Chair Willie Grieve

94


NTS

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A ceremony recognizing the installation of the first electric cable in Calgary, Alberta on October 17, 1911. Less than four years later, Albertans recognized the need for a regulatory body to watch over the utilities they had already come to depend on in their daily lives. 6

Glenbow Archives, PA-539-10


A letter from Alberta’s Premier

Over the past century the Alberta Utilities Commission and its predecessors have facilitated the growth of Alberta’s economy by performing a number of government regulatory functions. Through effectively regulating our utility industry for the past 100 years, it has helped Alberta to achieve the strategic economic and social outcomes that allow us to be a global energy leader, and solid environmental citizen. For decades, energy has played an important part in the lives of Albertans and the prosperity our province has experienced. And for decades, the Alberta Utilities Commission has played an essential role in allowing us to sustain and build upon that success by ensuring that the development and delivery of Alberta’s utility services takes place in a manner that is fair, responsible and in the public interest. Today, the Alberta Utilities Commission regulates in an increasingly complex utility environment to produce the outcomes we desire as a society. Its independent, objective and expert decision making provides certainty and predictability for business and investors, ensures the financial viability of Alberta’s utilities, and also ensures that Alberta ratepayers receive safe and reliable utility service at just and reasonable rates.

On behalf of Alberta, I would like to thank the Alberta Utilities Commission for a century of service to the public and wish the organization success as it continues to build on its vision of delivering innovative and efficient regulatory solutions for Alberta for the next 100 years. Sincerely,

Jim Prentice Premier of Alberta 7


A letter from Alberta’s Minister of Energy

The Alberta Utilities Commission has played an essential role in shaping our province’s utility sector for the past century. Since 1915, the Commission and its predecessors have been effectively regulating Alberta’s utilities, and often more. From railway tariff approvals and the supervision of municipal debentures in the 1930s, to overseeing milk prices up until 2008, the AUC has been challenged by a varied and evolving mandate in its 100 year history. Today, the Alberta Utilities Commission is trusted to review the projects that bring electricity and gas to communities all across the province. In developing rules that support the orderly operation of our retail electricity and natural gas markets, the Alberta Utilities Commission has demonstrated determination in protecting social, economic and environmental interests of Alberta. The efficient and often proactive nature of the work it does is commendable in that the Commission is constantly examining its processes in order to better meet the needs of both industry stakeholders and the citizens of our province with openness and transparency. Proof of its successes can be seen with the flick of a light switch or felt in the warmth from the furnaces that keep us comfortable during Alberta’s cold winter nights.

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The Alberta Utilities Commission has been critical to the well-being of Alberta and the people that call it home for the past century and I offer my heartfelt thanks for the important role it has played, and continues to play, in our everyday lives. Congratulations to the Commission on its centennial achievement. I wish you well as you embark on your next 100 years of service to Albertans. Sincerely, Frank Oberle Minister of Energy


Glenbow Archives, PA-539-11

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INCEPTION

1915-1959

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The Commission’s creation The Board of Public Utility Commissioners was created on April 17, 1915, and began its operations as Alberta’s first regulatory agency on October 17, 1915, amid uncertainty and turmoil. Canadians had been fighting in the First World War for more than a year and Alberta itself was just a decade old, which created a precarious atmosphere for the fledgling provincial economy. Stocks were sold unchecked, prices of utilities went unmonitored, and, until the board was created, there was an overall lack of supervision over essential issues that affected Albertans on a daily basis. It was in this situation that the need for a regulatory body became clear, and so the Board of Public Utility Commissioners was established by the provincial government. Its primary purpose was the regulation of utility rates and services within the province, but since the use of natural gas and electricity was still a fairly novel concept for most people, and because the utilities industry was underdeveloped, demand for utilities was very low. As a result, the board was given jurisdiction over scrutinizing many other broad matters that were considered to be in the public interest, including: the supervision of all debentures issued by municipalities and school districts, the cancellation of subdivision plans, the regulation of the sale of shares and securities of companies within the province, the approval of tariffs for provincial railways, the approval of highway crossings by railway branch lines, and the approval of Alberta Government Telephones’ rates. The board’s first chairman was George Bulyea, who had served as the province’s first lieutenant-governor from 1905 to 1915. Bulyea was assisted by two board members (Arthur Carpenter and John Stocks), a secretary and a stenographer, and together the Board of Public Utility Commissioners issued 169 orders in its first year. As the media of the day reported it, the board was seen by most Albertans as a welcome addition to an industry considered to be in need of a watchful eye.

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“The board shall have a general supervision over all public utilities subject to the legislative authority of the province, and may make such orders regarding equipment, appliances, safety devices, extension of works or systems, reporting and other matters, as are necessary for the safety or convenience of the public or for the proper carrying out of any contract, charter or franchise involving the public property or rights.” – Public Utilities Act, 1915


The Board of Public Utility Commissioners was first chaired by Alberta’s former lieutenant-governor, George Bulyea, pictured in the middle of this photograph with a cane. Premier Arthur L. Sifton, pictured on the far right, was responsible for the formation of the board in 1915. Glenbow Archives NA-1328-64874

An article in the Edmonton Journal published just two days after the creation of board describes the hunt for its first chair and other positions. The article discusses the rumour that Lieutenant-Governor George Bulyea is to be named the man to fill the top position with a salary of $7,000 per year. Edmonton Journal, April 19, 1915

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The Commission’s first decision

The first decision was released by the Board of Public Utility Commissioners on November 4, 1915. The document approves a debenture in the amount of $1,500 for the construction of a school house in the Kulm School District, now included in the Black Gold Regional School Division south of Edmonton. 14

“The work of the board, during the term covered by this report, has been affected to a very considerable extent, by the continuance of the war and the conditions entailed thereby.” – Board of Public Utility Commissioners Annual Report, 1917


Natural gas service began in Alberta in 1912, and soon after the Government of Alberta saw the need for a body to regulate the utility sector in the province. In 1915, the Board of Public Utility Commissioners was formed to fulfill that mandate and oversee gas transmission pipelines like the one pictured. Photo courtesy of ATCO Gas

The need for regulation The Board of Public Utility Commissioners began its work during the First World War and it was unable to escape the difficulties that war caused. The conflict made businesses more cautious with their assets and it also made it difficult to obtain resources and finance projects, which limited the formation of new companies. The war also led governments throughout Canada to take a stronger role in controlling commerce, which created an atmosphere of acceptance of regulation and led to government having a larger role within most Canadians’ everyday lives. The creation of the Board of Public Utility Commissioners was partly a consequence of this wave of control that emerged due to the war, but there were many other factors that made the conditions perfect for the board to emerge when it did.

Natural gas was discovered in the Viking and Turner Valley fields in 1914, a gas franchise for Edmonton was granted in 1914 with delivery beginning in 1921, there was a massive flurry of franchise activity within the telephone industry, and there were a huge number of railways and street car lines being built throughout the province, almost to the point of excess. On top of all of this, a persistent recession had started in 1913, which the provincial government was desperate to address. It became very important that a strong and prosperous economy be developed so that Albertans would be proud to call Alberta home for generations to come. And so it was under these conditions that the provincial government decided to take action and regulate Alberta’s industries by creating the Board of Public Utility Commissioners. 15


Crewmen at the site of Old Glory, the first major natural gas well in Alberta. The development of Old Glory set the stage for widespread natural gas service across the province. Glenbow Archives PA-3648-1 16


A controversial Commission The creation of the board did not occur without controversy. Many people felt that Bulyea was an inappropriate choice for chairman due to some of his assertive and partisan actions during his time as a politician. It was also thought that Bulyea’s annual salary of $7,200 plus expenses was quite extravagant for the duties of his job. Others considered it suspicious that it was the then premier of Alberta, Arthur Sifton, who had specifically initiated the creation of the board. The premier’s brother, retired politician and prominent southern Alberta businessman, Sir Clifford Sifton, had many interests in the gas companies that were vying for prominence around Calgary, and because Bulyea was a known friend and supporter of Arthur Sifton’s, many believed that Bulyea got the job so that he could become an inside-man to help Sir Clifford Sifton’s gas companies avoid being properly regulated. The other situation that brought suspicion to the Board of Public Utility Commissioners around the time of its creation was the near ruin of the provincial telephone system due to political manipulation and excessive development of infrastructure. It appeared to many people that the board was created to reclaim and salvage Alberta Government Telephones before it completely fell apart, therefore allowing the government to escape public resentment. So while the board had an important and necessary job controlling the many business ventures that were popping up in the young province, it was not created without contention.

“Amid the injustices and persecutions heaped upon the overworked members of the people’s tribunal, there is grave danger of this little band of selfsacrificing protectors of the Alberta Commonwealth going down to a premature official death.” – Calgary News Telegram, January 3, 1916

Telephone linemen celebrate the beginning of construction on the first telephone line to be installed in Crossfield, Alberta. The regulation of telephone utility development was one of the first responsibilities of the Board of Public Utility Commissioners. Glenbow Archives NC-29-77 17


Going beyond public utilities As the Board of Public Utility Commissioners gained steam as a prominent regulatory body in Alberta, the problems handled by the board quickly and consistently increased, especially into matters that were not necessarily related to public utilities. For example, the Sale of Shares Act of 1916 gave the board the responsibility to decide if a company had a “fair, just and equitable plan for the transaction of business.” The board had the duty of regulating the sale of shares, bonds and securities within the province, which became an increasingly important matter due to the proliferation of “ill-considered and hopeless ventures” within the province according to the board’s annual report in 1918. These hopeless businesses emerged because of the post-war success of Alberta’s agriculture industry, as well as the small but promising discoveries of oil and natural gas which had caused many “company promoters to turn their attention to the province as a likely field in which to sell shares in their speculative enterprises,” it said in the 1918 annual report. The board’s work under the act was not a recommendation towards a company or a guarantee that the venture would make a profit, but instead the Board of Public Utility Commissioners safeguarded the public against companies that were doomed to failure from the start. The Sale of Shares Act quickly became the board’s principal focus and in 1918 the board determined that it had prevented $3.5 million of unacceptable stock from being sold in the province.

Construction crews dig a trench by hand in preparation for a gas pipeline to be installed in downtown Edmonton. As natural gas infrastructure development began to boom in Alberta, the province recognized the need for a regulatory body.

Photo courtesy of ATCO Gas 18


The safety of operational gas pipelines and those under construction has come a long way since the early days of utilities in Alberta. Today, the Alberta Utilities Commission is responsible for ensuring that facilities are operated and constructed safely – that includes wearing hard hats, unlike the men in this photo. Photo courtesy of ATCO Gas 19


Big responsibility, limited power However, the powers of the inexperienced board were still quite limited. It was decided in 1919 by the Alberta courts that the board did not have jurisdiction over utilities that had entered into contracts before 1915, and this was not the only limitation that restricted the jurisdiction of the board. Contracts that had been confirmed by the provincial government were out of board jurisdiction, as well as utilities that were owned and operated by a municipality, unless the municipality specifically brought itself under board control. Another major restriction to the board’s authority was its inability to proactively deal with issues involving rates and price discrimination. The commissioners were only able to make a change when an application was brought to the board, and even then it could only deal with the specific questions raised by the application. “The object aimed at by the Public Utilities Act,” according to board member Arthur Carpenter, was “to secure efficient service by public utilities at rates that [were] fair and reasonable.” However, the board’s ability to fulfill this objective was limited by its heavy workload of non-utility matters, the Alberta courts, and the very legislation that created it. As if to compensate, the board had extensive authority and expertise in regulating matters involving finances and municipal borrowing powers that the formal court system did not have the time or knowledge to deal with. With the board’s strong hand in non-utility matters, the exchange seemed to lessen the degree of authority that the board could exercise when regulating the province’s utility monopolies.

The development of the Victoria Park Power Plant in Calgary, Alberta in the early 1900s signalled the growing need for electric infrastructure development and a regulator to oversee the development of the provincial electric grid. The City of Calgary, Corporate Records, Archives CalA 910618036 20


In 1919, a ruling by the Alberta courts limited the power of the Board of Public Utility Commissioners as it allowed municipally owned utilities like the City of Calgary Electric Light Department (pictured above) to self-regulate and placed them out of the board’s jurisdiction. Today, that is not the case and the Commission continues to assess facility and rate applications by municipally owned utilities such as ENMAX and EPCOR.

The City of Calgary, Corporate Records, Archives CalA 910604029

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The Public Utilities Act of 1923 saw railway companies brought under the regulation of the board and as a result, the construction of railways like the one pictured in Trefoil, Alberta, were overseen by the Board of Public Utility Commissioners. Glenbow Archives NA-2152-1

Gaining momentum

Commissioners the ability to interfere in contracts formerly outside of its jurisdiction.

In an attempt to combat these limitations, as well as to more thoroughly regulate the growing economy, the Public Utilities Act of 1915 was repealed and replaced with the Public Utilities Act of 1923. The new legislation moved the work of the Municipal Finances Commission Act and the Taxation Revision Act into the jurisdiction of the Board of Public Utility Commissioners, involving the board in supervising all municipal expenditures, investigating and assessing methods of taxing lands, cancelling subdivisions, and directing the repayment of a municipality’s debt. Also, tramway, street railway, and steam railway transportation companies were brought under the regulation of the board.

The 1920s were a formative time for the utility companies of Alberta; the increased investigatory powers that were given to the commissioners in 1923 gave much greater legitimacy to Alberta’s first regulatory agency and allowed for the utilities industry and the province’s finances to be more efficiently managed.

In addition to these non-utility related powers, the board was granted the right to investigate any public utility on its own initiative and make changes where it believed they were warranted. This new act also gave the Board of Public Utility 22

“Holders of bonds of defaulting municipalities in Alberta are expressing satisfaction with the effective supervision being exercised by the Board of Public Utility Commissioners.” – Financial Post, October 12, 1923


Technological advances, steadily developing gas and electricity sources, and slowly increasing demand for utility services allowed a significant portion of the utility companies (especially electric companies) throughout the first half of the 20th century to appear in front of the board to continually ask for lower and lower rates for their customers. For example, the Canadian Western Natural Gas, Light, Heat and Power Company Ltd., which was obtaining gas from the oil reserves found in Turner Valley, obtained from the board a decrease in its rate from 48 cents per thousand cubic feet (Mcf) to 43 cents per Mcf in 1925, and a further decrease to 38 cents per Mcf the following year. However, not all companies were able to keep up with the rapidly changing conditions that were a part of doing business in the utility industry. It soon became difficult for many of the smaller utility companies to balance producing power at rates that were low enough for most citizens to afford, while still being high enough to make a profit. As a result, the Board of Public Utility Commissioners took on the responsibility of advising these utilities so that they could become as successful as possible. For example, when the Vimy Light, Heat and Power Company wanted to use flat rates instead of meters, the commissioners warned that the scheme had been unprofitable for other companies in the past. When Okotoks Electric asked the board for an increase in rates as a way to get out of financial trouble, the board rejected the application on the grounds that an increase in rates would reduce demand, which would just serve to increase the company’s problems. As the industry expanded, the role of the board expanded with it; it became less of a question of whether or not the board should regulate the economy of Alberta, and more of a question of exactly what role and powers the board should have within the economy. “The rates decided upon after such complete investigation and with impartial desire to be fair to the consumer and to the company should be accepted in good faith by all concerned.” – Calgary Herald, November 18, 1926 Provincial Archives of Alberta A4019 23


A landmark case In 1926 the Board of Public Utility Commissioners dealt with a landmark case involving Alberta Government Telephones, the province’s Crown-owned telephone communications company. Alberta Government Telephones wanted an increase in its rates, but this increase was heavily opposed by the City of Calgary (both the Calgary Board of Trade and the City of Calgary hired legal counsel to argue their case against Alberta Government Telephones). The Board of Public Utility Commissioners became a key player in this high-profile case that would impact many Albertans’ daily lives, and it was the duty of the board to make a decision that would be considered in the best interest of everyone involved. The case was thoroughly investigated, and the rates that were decided did not change for 40 years. This is an early example of a situation in which the board stepped in and used its expertise to hear evidence from various stakeholders and determine what would ultimately be the best decision to uphold the public interest for Albertans. This was also the first time that the City of Edmonton began to demand a share of Alberta Government Telephones’ toll revenues on calls to and from Edmonton, which shows that the telephone industry was now truly entrenched in public utility service, and as such should be a regulated utility. As the use of the telephone became more widespread and the interests of Alberta Government Telephones and its users began to collide, the role of the board in balancing competing interests and protecting Albertans’ stake in the industry became more and more important.

Glenbow Archives ND-3-3361b 24

The Board of Public Utility Commissioners’ role in a landmark case involving Alberta Government Telephones in 1926 changed the landscape of the provincial telephone system for the next 40 years. When the board decided to freeze rates, the pictured telephone operators at Alberta Government Telephones in Edmonton were kept busy, as the rate freeze ensured the public could continue to afford the use of the utility.


An expanding mandate At the same time, the jurisdiction of the Board of Public Utility Commissioners continued to expand, especially into matters that were not specifically related to the utilities industry. For example, in 1928 the Coal Miners’ Wage Security Act was passed, which gave the board authority to issue certificates exempting coal mine owners from the necessity of filing bonds to ensure payment of their employees’ wages. The board was also given additional powers to approve all tolls chargeable by operators of public vehicles, claims for surface damage arising from seepage or overflow or water ditches, all annexation disputes, and any land compensation for owners affected by re-plotting schemes (situations that arose when the local government would change the plan for a subdivision to better suit a community’s needs). So while the board’s work under the Sale of Shares Act came to an end in 1929 and its jurisdiction in that field was transferred to the attorney general’s office by the way of the Security Frauds Prevention Act, the amount and diversity of responsibilities held by the board certainly did not decrease during the interwar period. Another significant development during this time was an amendment to the Public Utilities Act that solidified the utilities industry in Alberta as being a system of regulated monopolies, with the government showing no interest in allowing competition among companies. It stated that the board was able to protect one company in an area from being threatened with competition by another company. The question of whether public- or private-interest monopolies should control utilities seemed decided by this point, and this amendment clearly illustrated that the board was gaining more and more power to oversee the industry. “The Public Utilities Act was amended so as to give the board power to deal with cases where territory, already occupied by one company, was threatened with invasion by a second company.” – Board of Public Utility Commissioners Annual Report, 1928

The Board of Public Utility Commissioners was at one time responsible for regulating the production, handling and distribution of milk across the province. Regular tests were performed on milk, as pictured above, to ensure it was being produced safely for public consumption. Glenbow Archives NA-4941-1 25


In 1933 the Board of Public Utility Commissioners was given additional responsibilities when milk was declared a public utility. It was seen as a necessary product that ought to be regulated in order to ensure provincial public access, and so milk was moved under the jurisdiction of the board, which was granted the power to regulate all aspects of milk production, handling and distribution within the province. This change occurred as a result of price-cutting that was taking place in Edmonton and Calgary, which in turn hurt the profitability and viability of the province’s milk producers. To try to get a handle on the situation, the board issued interim pricing orders to increase the wholesale price paid to the producer. Milk regulation quickly became a major focus of the Board of Public Utility Commissioners due to its importance in the everyday lives of Albertans. In 1934 the board began a milk licensing system, in which every producer and distributor of milk in Calgary and Edmonton was required to obtain a licence from the board. It was a busy time for the fledgling regulatory board, because it also assumed authority under the Security Frauds Prevention Act in 1933, authority which had previously been carried out by the attorney general. The commissioners then had the duty of regulating the registration of all brokers of securities, as well as audits and trading of securities within the province. In 1935 the work formerly carried out through the Alberta Assessment Commission Act was transferred to the board as well. This work involved the ability to determine appeals and complaints made about land assessments, establish equalized assessments for all municipalities, and make recommendations on the standards and methods of assessment. The non-utility-related duties of the board continued to increase even further in 1936 when the Fuel Oil Licensing Act was put into place, requiring all of the province’s 1,000 fuel dealers to obtain a licence from the board. The combined weight of this new act, the board’s milk duties and all of the other important responsibilities that the Board of Public Utility Commissioners handled began to strain the resources of the small board, and so in 1937, after only one year of work, the administration of the Fuel Oil Licensing Act was transferred to the Alberta Department of Trade and Industry. At the same time, the provincial government also created a Highway Traffic Board to assume the Board of Public Utility Commissioners’ duties of setting tolls for public vehicles engaged in the carrying of passengers. 26

Another significant development that had an impact on the functioning of the board during this time of early expansion was the inclusion of responsibilities under the Pipeline Act. The act was a result of problems with people tapping high-pressure natural gas and oil transmission lines and improperly using equipment. Starting in 1937 the board was able to prescribe measures of safety for the protection of life and property relating to natural gas and oil pipelines. The Board of Public Utility Commissioners now had a visible and important role in protecting the people of Alberta, which helped validate its role within the burgeoning utility industry. In 1939, the board’s responsibilities relating to the Pipeline Act increased when oil pipelines from Turner Valley to Calgary came under the jurisdiction of the board. This necessitated the hiring of a full-time inspector in the field at Turner Valley. In tandem, public utility matters continued to represent a much smaller part of the board’s workload.

“The board, while the utilities slumbered, became the depository for whatever regulatory task the government felt inclined to impose upon it.” – A.O. Ackroyd, in a speech given for the Public Utilities Board’s 75th anniversary.


When milk was declared a public utility in 1933, it came under the jurisdiction of the Board of Public Utility Commissioners. The board had the power to regulate every aspect of milk production by producers like Edmonton City Dairy, pictured.

Glenbow Archives NA-1328-2133 27


Regulating during the Great Depression The work of the Board of Public Utility Commissioners did not go unaffected by the Great Depression of the 1930s. Alberta was hit particularly hard by the Depression in Canada, specifically in the agriculture industry, and it became difficult for many Albertans to afford everyday necessities. This meant that many luxuries families used to be able to afford, such as telephone service and electricity, were no longer affordable. This greatly decreased the demand for the services provided by the utilities under the board’s control. Luckily, the province recovered from the Depression relatively quickly and industry was able to grow once again by the middle of the decade. An indication of this economic improvement came in 1936 when the board was able to increase the consumer price of milk to 11 cents per quart from 10 cents per quart in Calgary, Edmonton and Lethbridge, and to nine cents from seven in Camrose. In 1937 the board’s workload under the Security Frauds Prevention Act was greatly increased due to an upswing in oil development activity in Turner Valley. This illustrated Alberta’s ability to emerge from the Great Depression and restore the province’s economic development, with the help and support of the Board of Public Utility Commissioners.

By 1936 signs of economic recovery from the Great Depression began to show in Alberta. One indication was the board’s decision to raise the price of milk from 10 cents to 11 cents per quart in Calgary, as households were once again able to afford basic necessities. Provincial Archives of Alberta A11806 28


Alberta farmers were hit particularly hard by the Great Depression, as the public had difficulty affording everyday necessities such as milk. The Board of Public Utility Commissioners had to balance affordability for the public and at the same time ensure that milk producers, like the man pictured, were making enough of a profit to support their own families.

Provincial Archives of Alberta A16576 29


The Board of Public Utility Commissioners was limited in its ability to regulate the operations of oil and gas production at wells such as the one pictured here, located in Turner Valley. It wasn’t until the creation of the Energy Resources Conservation Board in 1938 that the board had a partner in ensuring efficient operations that led to fair rates for Albertans.

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Provincial Archives of Alberta P1233


Overcoming obstacles One significant weakness in Alberta’s regulation of the natural gas industry throughout the board’s first 20 years was that although the commissioners could regulate the rates charged by the gas utility companies, they could not force the companies to operate and deliver natural gas more efficiently. A significant portion of the utility applications that came to the board before 1938 involved gas utility companies requesting an increase in their rates due to the rapid depletion of their gas fields, and the Board of Public Utility Commissioners had to deal with the rates even though it could not fix the underlying problems of wastage and depletion. For example, an application filed by the cities of Calgary and Lethbridge asking for a decrease in Canadian Western Natural Gas’ (now a part of ATCO Gas) rates was denied due to board concerns around a possible imminent supply failure from Turner Valley. In an attempt to remedy the situation, which was harmful to all parties, the Petroleum and Natural Gas Conservation Board, predecessor of the Energy Resources Conservation Board, was created in 1938. Its purpose was the conservation of

Alberta’s energy resources and ensuring the orderly development of them. The commissioners maintained their responsibilities over oil pipeline regulation, but now there was another board that the Board of Public Utility Commissioners could work with to make sure that the energy and utility industry in Alberta delivered efficient operations that led to fair and reasonable rates for the people of Alberta. In 1944 the partnership between the Board of Public Utility Commissioners and the Petroleum and Natural Gas Conservation Board was further strengthened with the creation of the Alberta Natural Gas Utilities Board, the members of which consisted of the chairmen of both boards. The Alberta Natural Gas Utilities Board’s duties included addressing concerns over the monopolization of Calgary’s gas markets as well as the regulation of the construction and operation of the pipelines and other infrastructure required to gather, process and transport natural gas within Alberta. The Board of Public Utility Commissioners and the Petroleum and Natural Gas Conservation Board worked together to provide the best possible utility service to Albertans, and their cooperation would continue to serve Albertans for decades.

The Dingman No. 1 Discovery Well in Turner Valley marked the discovery of oil and gas in Alberta. While this important discovery highlighted the need for a regulatory body, the effectiveness of the board in regulating gas utility operations was limited in its first 20 years as it lacked the power to enforce its recommendations. Provincial Archives of Alberta P1883

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Managing the milk

Then, in 1943, the demands of war led to the formation of the Federal Food Board, which regulated the milk supply of Canada. This meant that the commissioners For many years, public utility regulation occupied only a small portion of the board’s then had two federal bodies to work with for their milk-related regulatory duties. time, mainly due to a lack of infrastructure and demand. In 1941 only five per cent Meetings were held in Ottawa between the new federal agencies and the milk of farms had electricity and many towns received only part-time service (in the boards throughout the country to discuss the difficulties surrounding the milk supply evenings and Monday mornings to accommodate washing day). Telephone service in and prices, as well as to formulate decisions on future policy matters. The board rural areas was unreliable because Alberta Government Telephones provided service was obliged to ask cheese producers to divert supplies to the fluid milk market to essentially only in urban settings, while the rural areas were served by local mutual ensure that there was adequate supply. Then in 1944 the Board of Public Utility Commissioners issued an order that approved an application from distributors in companies. Lethbridge to eliminate the delivery of milk on Sundays, except in the summer months. In contrast, the board’s work regarding milk pricing increased even further, mainly because of the government’s tight control of resources after the outbreak of the When the Second World War ended and the federal wartime subsidies were Second World War. In 1942 the federal Wartime Prices and Trade Board, which was established in 1939, asked the Board of Public Utility Commissioners to undertake removed, milk producers faced increasing costs and the role of protecting what was considered a public necessity was once again completely held within the hands the supervision of all milk prices, both inside and outside the previously controlled of the commissioners. To respond to the concerns of the milk producers, the board areas. held pricing hearings in 1947 at eight separate locations across the province before deciding to set consumer prices at 17 cents per quart.

The Second World War put milk producers, and in turn the Board of Public Utility Commissioners, in a tough position as the end of the war and its subsidies saw milk producers facing increased production costs. In response to the milk producers’ concerns, the board held public hearings across the province and rose consumer pricing of milk to 17 cents per quart in 1947. 32

Glenbow Archives NB-55-905


During World War II, the board’s work on milk pricing increased due to the government’s tight control of resources. The board even had to ask cheese producers to divert their supply into the milk market to keep milk bottling machines, like the one pictured at the Northern Alberta Dairy Pool, busy enough to adequately supply Albertans. Provincial Archives of Alberta, A16507

At a hearing held by the Board of Public Utility Commissioners, milk producers ask for an increase in milk prices when the government halted subsidies after the Second World War, which greatly increased production costs. City of Edmonton Archives, EA-600-553b

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Linemen build transmission and distribution lines that deliver electricity into Albertans’ homes. Today, the Commission continues to regulate the need for more transmission lines to strengthen the province’s electricity grid.

Farm Electrical Services Ltd. (now TransAlta) was a non-profit company that built transmission lines to rural areas in the 1950s. Regardless of their non-profit nature, the Alberta Utilities Commission’s predecessors regulated their projects to ensure they aligned with certain public interests.

Farm Electric Services Ltd.’s (now TransAlta) employees Gerald Rowland and Fred Brown stand on a line truck east of Crossfield, Alberta. The 1950s saw a boost in transmission infrastructure that led to an increase in rural customers. By 1961, more than 87 per cent of Alberta farmers had power. 34

All photos courtesy of TransAlta Corporation


Future at risk In 1948 Albertans were asked, by means of a provincial plebiscite, to decide whether they thought electric utilities should be publicly or privately owned and operated. People who were living in rural areas were getting extremely frustrated with the slow pace of electrical development into the more remote areas of the province, and so many people thought that rural electrification would occur most efficiently, quickly and inexpensively if the electrical system was a Crown corporation. However, if electricity was to become a public system, then the extra costs of stretching power lines to farms would have been subsidized by higher rates paid by the people who lived in urban areas. Therefore, the main factor that determined if a citizen would vote for public or private power seemed to be based upon whether he or she lived in a rural or urban area, as well as how effectively they were being served by the private utility companies that were already operating. This plebiscite was at the same time as a provincial election, which meant that the issue became very politicized. Although the premier at the time, Ernest Manning of the Social Credit party, was officially neutral on the subject in order to offend neither side of the debate, behind the scenes it was clear that he truly supported private ownership. He believed that the role of government was to guide the economy, but to never interfere with it, and so he viewed public ownership to be a form of socialism. On the other hand, Manning’s main political opponent, Elmer Roper of the Co-operative Commonwealth Federation party was an enthusiastic supporter of government control. The official total, after a recount in the Vermilion district, was 139,840 Albertans in favour of changing the system to a Crown corporation and 139,991 Albertans in favour of keeping the status quo of using private utility companies – a margin of only 151 votes. Manning was re-elected, the Social Credit party gained 51 out of the 57 seats in the legislature, and it became clear that Albertans were not so much in favour of public ownership that they believed the whole system should be overhauled.

If this plebiscite had gone the other way and it was decided that the electrical system should be turned into a Crown corporation, it would have meant that all electricity operations would have been directly in the hands of the province, which would have drastically changed the existing and future operations of the board. Although the board would have maintained control over its non-utility and gasrelated jurisdictions, it most likely would not have had the authority to regulate any portion of the electrical system. At that time, Crown ownership itself was considered a form of government regulation. However, since Albertans did vote in favour of private ownership and the status quo, the Board of Public Utility Commissioners remained as a necessary electric utility regulator allowing its role to evolve into the important role that the Alberta Utilities Commission fills today in the restructured electricity market.

“I am particularly pleased to note their emphatic repudiation of the socialist threat to our free democratic way of life.” – Ernest Manning’s reaction to Albertans choosing private power

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Power plebicite vote Newspapers across Alberta widely covered the provincial plebiscite to decide whether electric utilities should be privately owned and operated. Although the results from the rural plebiscite showed that those communities favoured public ownership of utilities, the urban vote swung the plebiscite in favour of private ownership. An article that appeared in the Calgary Herald in August of 1948 stated, “A major objection in public ownership by city dwellers was they would be expected to bear some of the extra cost of rural electrification.” Other concerns raised in the Edmonton Journal that same month explained that urban voters were warned that, “Setting up a public utility would mean expenditure of ‘millions and millions’ of dollars.” While rural voters hoped a publicly-owned utility company would lead to faster electrification of their communities, the urban voters won by a small margin of just 151 votes that kept Alberta’s utility companies privately owned.

8

, 194 d, August 18

Calgary Heral

Edmonton Journal, August 18, 1948 36

Edmonton Journal, Au

gust 17, 1948


Calgary Herald, Augu

st 18, 1948

948

,1 d, August 17

Calgary Heral

Edmonton Journal, August 17, 1948

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Focusing on utilities The post-Second World War atmosphere of Alberta was one of steady development. The industry was transformed when Imperial Oil finally found oil at Leduc on February 13, 1947, after drilling 133 dry holes throughout the province. This discovery led to Canada, and specifically Alberta, being considered an oil-rich land, as well as contributed to the rapid development of and increased competition within the oil and gas industry. As a consequence of this development, the Alberta Gas Trunk Line Company Act of 1954 created the Alberta Gas Trunk Line Company (predecessor of the current NOVA Gas Transmission Ltd.), whose job it was to build and operate a province-wide natural gas transportation system. The act created a single, province-wide gas gathering system, and also gave the Board of Public Utility Commissioners the responsibility of prescribing rates for the transportation of natural gas upon complaint by an interested party – none of which were filed with the board until 1971. With the addition of responsibilities relating to the Alberta Gas Trunk Line Company and the jurisdiction of the Security Frauds Prevention Act being moved to the newly created Securities Commission as a part of the Securities Act of 1955, the board’s efforts were consolidating around issues related to public utility regulation. As a result, by not spending a large portion of the resources of the Board of Public Utility Commissioners on non-utility financial matters, the board was able to focus more completely on building a reputation as a professional and skilled regulatory institution for Alberta’s utility industry. However, the board still had many challenges on the road to growth and progress. In 1956 only 35 per cent of Alberta farms had phones, largely because the mutual companies that were serving rural customers had not kept pace with technology. By the middle of the 20th century, Albertans were demanding a certain quality of life and the corresponding modern services that were now common and essential, among them, telephones. It was no longer acceptable for these services to not be offered to all Albertans at all times. Nevertheless, 60 per cent of the orders issued by the board in 1960 were related to 38

municipal and school matters, while only slightly more than 12 per cent were related to public utilities. The challenge fell to the Board of Public Utility Commissioners to make certain that these necessary public services were available to Albertans whenever they were demanded, while also continuing to serve the other important but non-utility-related duties that fell under the jurisdiction of the board. The Board of Public Utility Commissioners emerged as Alberta’s first regulatory agency and spent the beginning of its life as the province’s catch-all organization, responsible for monitoring and controlling all services that were necessary for the proper functioning of Alberta’s society. But as the utilities industry evolved, so too did the role of Alberta’s Board of Public Utility Commissioners.


Glenbow Archives, IP-14a-2577 39


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PROGRESSION

1959-1989

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The second half of the 20th century was an era of immense utility development throughout the province. As a result, the Public Utilities Board shed many of its non-utility-related responsibilities in order to focus on the growing demand for utility regulation in Alberta. It began concentrating its attention on reviewing facility applications for transmission lines, as pictured.

The City of Calgary, Corporate Records, Archives CalA 980601006 42


Expanding utility service, narrowing regulatory focus Alberta’s natural gas industry underwent significant changes during the early 1960s, changes that were necessitated by an increase in demand for utilities and a corresponding expansion of infrastructure to accommodate the province’s growing economy. As utility services were being demanded by more and more people, and as the utility companies were becoming settled in their service areas throughout Alberta, the job of ensuring fair and efficient utility rates and services became fully entrenched in the hands of the Board of Public Utility Commissioners. It was due to the guidance and expertise of Alberta’s first regulatory board that many of these important changes were able to occur in the natural gas industry. An example of this came in 1959 when the board issued the Jumping Pound decision, which is often referred to as the gas cost allowance method. The board’s decision ruled that reasonable processing fees for natural gas should be calculated by allowing the producer a return on capital invested in the processing facilities, calculated independently for each processor, plus a return on operating costs. The Jumping Pound decision was a landmark case for the board because it illustrated the Board of Public Utility Commissioners’ expertise and ability to adopt innovative solutions to deal with very complex situations. The gas cost allowance methodology moved under the responsibility of the Department of Mines and Minerals, which developed a generic formula based on the board’s decision, and this method continued to be used until 1988. Another major event for the gas industry came in 1960 when the Gas Utilities Act was introduced and added to the jurisdiction of the board. The act detailed the governing of the distribution of natural gas in Alberta by investor-owned utilities and it gave the board authority over nearly all aspects of the functioning of the natural gas industry in Alberta. The Gas Utilities Act has had a lasting impact, as it continues to be a major part of the governing and jurisdiction of the Alberta Utilities Commission to this day. It was also at this point that the Board of Public Utility Commissioners officially changed its name to the Public Utilities Board, becoming known conveniently throughout the province as the PUB.

Further validation of the Public Utilities Board’s important role in natural gas regulation came in 1961. The board had decided in 1959 to increase Northwestern Utilities Limited’s (now a part of ATCO Gas) rates, which was viewed by some people as the board simply being swayed by the will of the company without taking into consideration the effect it would have on the customers. The decision was challenged by the cities of Edmonton and Red Deer and was eventually appealed all the way to the Supreme Court of Canada. However, in 1961, after extensive investigation, the Public Utilities Board’s decision to increase Northwestern’s rates was unanimously upheld and the jurisdiction of the board was confirmed. This was a significant decision from the Supreme Court of Canada that cemented the Public Utilities Board as an expert and the authority in utility regulation in Alberta. Another factor that contributed to the expert reputation of the board was the nature of the board’s workload, which was steadily focused more and more on utility-related matters. An example of this was the Local Authorities Board Act, which in 1961 removed a number of matters related to municipalities from the board’s jurisdiction. Another illustration was the Alberta Milk Control Board, which was formed in 1969 and took over all the responsibilities over milk that were previously under the jurisdiction of the board, except for fixing the minimum retail price of milk. Then in 1970 the board’s responsibility over determining compensation for expropriations by companies subject to the authority of the Pipeline Act, the Water, Gas, Electric and Telephone Companies Act, and the Water Resources Act was transferred to the Board of Arbitration (currently the Surface Rights Board). And finally, the board’s duties over determining compensation for lands taken in municipal expropriations was transferred to the newly created Land Compensation Board. The second half of the 20th century was an era of immense development throughout the province of Alberta, especially in the utilities industry, and so the Public Utilities Board shed many responsibilities that were non-utility related in order to focus on its main priority: ensuring safe and efficient utility service at fair rates.

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Growing population, growing needs Alberta has always had a consistently robust rate of population growth, but this was especially true during the 1950s, ‘60s and ‘70s. In 1951 the province’s population was 939,501, which grew to 1.33 million in 1961 – a 41.8 per cent increase in 10 years. This trend continued, with a further 22.2 per cent increase in 1971 (to 1.63 million people) and a 37.5 per cent increase in 1981 (to 2.24 million people). This population growth necessitated improvements and enlargements of the province’s infrastructure system in order to meet the increase in demand for essential services. An illustration of this growth came in 1965 when Alberta Government Telephones applied to the board for new rates. When it had previously applied in 1921, Alberta Government Telephones had filed just 19 pages of written submissions, but in the 1965 application the weight of the paper filed on depreciation matters alone was so substantial that it could not be taken on the airplane to Calgary. Another example of provincial demand growth came in 1970, when Calgary Power Company (now TransAlta Corporation) had to commission its first coal-fired electricity generating unit because its older hydro units no longer produced enough electricity to keep up with consumption. During the 1960s, Alberta experienced a 62 per cent increase in utility customers. In order to keep up with this massive growth of consumers demanding utility service, and to be able to properly regulate the companies to serve the best interests of Albertans, the board was enlarged to eight members in 1973 and a Public Utilities Board office was opened in Calgary. This was a time of major growth and development and all aspects of Alberta’s utility industry felt the pressure to expand. “The intensity of the work, the profile of the work, the scrutiny of the work, because of the phenomenal speed of the growing industry, made [the work of the board] very important.”

The City of Calgary, Corporate Records, Archives CalA 980601006 44

– David Manning, former deputy energy minister


The 1950s and 1960s saw an immense increase in demand of utility services across the province. As a result, rate applications and hearings increased in complexity, requiring the Public Utilities Board to enlarge to eight members and open a second office in Calgary.

Glenbow Archives NB-55-439 45


Increased environmental awareness It was also during this time that the modern environmental movement became an influential force on the operations of the natural gas and electricity industries and with that, started to have an impact on the decisions that were made. The effects of fossil fuels – both production and consumption – began to be studied more intensively than they had been in the past and more and more people grew concerned by the utility industry’s environmental impact on society. The groups that represented citizens’ concerns about environmental issues became more sophisticated in their arguments and representations in front of the board, and the environmental movement in general became more extensive as the industry expanded. As a part of this new awareness, the board had to decide what its role should be when dealing with environmental issues. The Public Utilities Board had the power to influence utility companies within its jurisdiction to use more efficient and environmentally friendly methods of generating electricity. Many groups insisted that some monetary recognition of the environmental impact of utilities should be added to the rates charged by the utilities in order to try to influence the energy consumption behaviour of Albertans. The board decided not to incorporate monetary recognition in utility rates as it was unwilling to set a precedent without a mandated change in legislation. Often environmentally preferable methods of meeting demand are more expensive than traditional methods so the board would have wanted explicit authority for a change in direction. Traditionally the board was to ensure that utility services were provided to consumers in an adequate and safe manner at lowest possible costs. In addition, the board did not have the authority to charge such rates as the law required that rates not be unduly discriminatory. If rates were not set with respect primarily to the utility’s cost of service, but instead according to the need to conserve energy, based on traditional analysis they would be unacceptable.

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In order to begin to respond to the issues, the government of Alberta established its first Department of the Environment in 1971 and also created the Energy Resources Conservation Board, which took over from the Petroleum and Natural Gas Conservation Board with expanded jurisdiction into supervising the conservation of hydro and electric energy resources as well as coal. As the province continued to develop its stance on the environment in relation to energy and utility resources, the board contributed to discussions about difficult issues that would have a long-term impact on the lives of Albertans.

“It can be strongly argued that electricity rates should reflect the full burden that electricity production and consumption imposes on society. This burden includes environmental costs…Until energy prices reflect their full social and environmental costs, ratepayers will not change their patterns of energy consumption.” – A Citizen’s Guide to the Regulation of Alberta’s Public Utilities, Janet Keeping, 1993, page 28


The 1970s brought environmental concerns into the hearing rooms of the Public Utilities Board. The environmental impact of facilities such as Horseshoe Falls, pictured, was carefully considered before the board made any decisions regarding facility applications.

The City of Calgary, Corporate Records, Archives 784383-11 47


In 1985, this control centre was constructed by TransAlta to centralize the command structure that managed the flow of electricity from over 15 generating units to local substations for further transport into Alberta homes. The change was made to maintain quality of service standards set by the Public Utilities Board.

Photo courtesy of TransAlta Corporation 48


Pushed to the limit The rapidly increasing population of Alberta in the 1960s to the 1980s quickly put a strain on the operations of the utilities. Increased demand meant that the gas and electric utilities were pushed to the limit of their generating capacity and the costs associated with normal operations were constantly increasing. As a consequence, the board dealt with a general rate application from Calgary Power Company for the first time in 1973, even though the company had been providing electrical service in the province for more than 60 years. This was an unprecedented event because during the company’s history prior to 1973, the price for power that Calgary Power Company charged for electricity had only ever decreased and the Public Utilities Board only had jurisdiction over a utility’s rates if they rose. This was not just an isolated event; every major gas and electric utility appeared before the board for approval of higher rates in 1974.

“I would be surprised if there was anyone who didn’t think they acted in good faith. I think if you appear in front of them frequently enough you begin to think they The experience of Canadian Utilities Ltd. (now a part of ATCO Ltd.) is another clear have a bias towards the other side, illustration of this trend. Despite increases in power consumption, its net earnings but I think the other side felt the steadily decreased due to increased costs of operation which more than offset same way.” revenue gains. Canadian Utilities was forced to apply to the board for its first increase in power rates. A 17 per cent increase in allowable revenue to cover these rising costs, which also allowed for a return of 8.5 per cent on Canadian Utilities’ approved rate base.

– Jack Major, retired Supreme Court justice and former regulatory lawyer

Once the board entered into this era of intense expansion of utilities, regulatory hearings became a more common part of the rate process. The utility companies had to assure customers and investors that all capital expenditures were necessary in order to keep rates as fair as possible, while still making sure that Albertans would have a reliable source of power. It was the Public Utilities Board’s duty to keep rates fair and reasonable for consumers while providing the utility companies with a reasonable opportunity to earn a fair rate of return.

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Price protection measures In an attempt to shelter Albertans from the seemingly ever-increasing natural gas prices, the provincial government introduced the Natural Gas Prices Protection Plan in 1974. The provincial government wanted to “take such action as [was] necessary to assure that Alberta’s consumers of Alberta natural gas [would] not be significantly burdened by the consequences of higher prices,” it said in the Alberta government statement of new natural gas policies for Albertans. The government believed a rebate program would be the most effective way to accomplish this goal. The board’s role under the plan was to issue certificates that qualified utilities to receive provincial rebates, the savings of which would then be passed on to the consumers. However, even with these attempts to stabilize natural gas prices, utility costs in Alberta continued to escalate. From 1974 to 1975, the average annual cost of natural gas for residential customers increased by 100 per cent and 25 per cent for electricity.

These rapid price escalations necessitated the board’s greater use of interim orders, but it also led to a much higher rate of complaints and inquiries to the board from Albertans. This growth in workload prompted the Public Utilities Board to publish guidelines on the conduct of public hearings. Procedures to expedite the processing of applications were developed, as well as the use of in-office actions (when neither party served the public) in an attempt to most efficiently use the board’s resources. The board was made up of nine members by 1977, and it had become increasingly concerned with the rising costs associated with funding the interveners at Public Utilities Board hearings. This led the board to publish a paper entitled Interventions and Costs, which introduced guidelines that allowed costs to be recovered from customers through rates only if the interventions had been reasonable and beneficial to the proceeding. The result was that both interveners and applicants took a more responsible attitude towards rate hearing costs.

Increased demand for utilities in the 1970s meant increasing rates. Electricity rates increased over 25 per cent during this period as utilities tried to keep up with demand by building electric generating stations like the Sundance electrical generating station, pictured. The City of Calgary, Corporate Records, Archives 71943-55 50


The development of electric generation and transmission facilities kept the board busy with public hearings during this time period. With the cost of funding interveners weighing on their minds, the board members published guidelines that allowed costs to be recovered only if the interventions had been beneficial to the proceeding.

Photo courtesy of ATCO Electric 51


Growing with the industry The Gas Utilities Act was amended in 1974 to include all distributors of butane and propane in Alberta under the board’s jurisdiction, which allowed the Public Utilities Board to then deregulate the distributor and producer prices of propane in 1977. This action demonstrates the proactive approach the board was able to take when dealing with the public utility companies; a stark contrast from the reactive role that it had previously played when issues arose. The board had matured into a necessary institution within Alberta’s utility industry. In 1978 the Public Utilities Board regulated 900 investor-owned utilities, 15 municipally owned utilities (which had put themselves under board regulation for the benefits that came with the Natural Gas Prices Protection Plan), Alberta Government Telephones, as well as about 900 municipally owned utilities, rural electrification associations and gas co-ops that were under partial board control. The board was able to have up to 12 members and employed about 50 staff in Edmonton and Calgary. It was a period of intense growth in Alberta, and the board was able to keep up with the ever-changing and multifaceted industry. However, its fundamental goal of keeping utility prices fair and working in the best interest of Albertans remained; the need for government oversight of industrial activity was amplified. “The board appreciates any opportunity to become better known and understood by the public generally. It has always surprised me that, notwithstanding that the board’s orders and decisions affect every Albertan in one way or another, very few of those Albertans know very much about the board.” – Board Member Fred Trofanenko in a presentation to the Alberta Urban Municipalities Association,1978 Photo courtesy of ATCO Gas 52


Although the Public Utilities Board was still a relatively unknown institution in Alberta, it continued to hold an influential position within the economy and its expertise was valuable for the effective operation of utility companies in Alberta. An example of the board’s influence came in 1980, when ATCO Ltd. tried to buy a majority share of Calgary Power Company. In an attempt to stop the takeover, Calgary Power Company asked the Public Utilities Board to step in and investigate the situation. The board forbade ATCO from buying any more shares until a hearing was held on the subject. ATCO argued the matter was outside the board’s jurisdiction and it should therefore have no influence on the takeover. However, the board pointed to Section 98 of the Public Utilities Board Act, which stated, “Where an owner of a public utility was authorized to unite with the owner of any other public utility, the union was subject to the consent of the board.” Since ATCO was considered an owner of a public utility, it was therefore subject to the jurisdiction of the board.

“If it’s important, it usually ends up in front of the regulator… Uniformly, I think there is general trust of this regulator, which may be unique.” – Dale McMaster, executive vice president, transmission and distribution services at ENMAX

This decision was appealed to the Supreme Court of Canada and the judgement of the Public Utilities Board was upheld, which was an important milestone in the long life of the board. The Supreme Court’s decision strengthened the authority of the board, and illustrated that the Public Utilities Board’s decisions were built on extensive expertise in the increasingly complex utility industry of Alberta. The advent of plastic pipe in the mid1960s meant gas lines were finally flexible enough to make it economically feasible to run them in rural areas with uneven ground. A growing customer base meant a growing need for regulation and as a result the Public Utilities Board added four new members, as well as employing approximately 50 staff members in Calgary and Edmonton. Photo courtesy of ATCO Gas 53


An ever-changing mandate However, the authority of the board did not go completely unobstructed. The National Energy Program was also implemented in 1980 by the federal government, which introduced price controls and federal taxes on natural gas in an attempt to increase Canadian control over the energy industry and protect Canadians from soaring world oil prices. The National Energy Program was amended in 1982 with the introduction of the Petroleum Incentives Program Act, which encouraged new development of oil and gas in Alberta, something that had nearly stopped since the program started in 1980. Although the program became less meaningful once oil prices around the world began to stabilize during the second half of the 1980s, it showed that the Public Utilities Board and all Albertans were not immune to the influences of outside forces. Another example of an external policy decision that impacted the operations of the board was the Electric Energy Marketing Act, which was passed by the government of Alberta in 1982. The act aimed to equalize electricity rates throughout the province by averaging the price of generation and transmission. It became the board’s duty to set the price or pricing formula, for each customer group, at which utilities would sell electricity to the newly created Electric Energy Marketing Agency. This averaging of electricity rates across the province was designed to create greater rate stability, but actually resulted in tensions between the utilities due to the unequal and interdependent collection and disbursement of transfer payments from one utility to another. The implementation of the Electric Energy Marketing Act demonstrated the substantial impact the provincial government could have on the day-to-day procedures of the Public Utilities Board. It also indicated the government was not completely comfortable with the utility system as it had existed for decades and that a change was imminent. Further changes were initially introduced in the natural gas sector, starting in 1984 when the Utilities Statutes Amendment Act was passed. The act restricted the application of certain sections of the Public Utilities Board Act and the Gas Utilities Act to owners of gas utilities that the lieutenant-governor designated by regulation. Then in 1985 the price of natural gas was deregulated by a federal-provincial 54

agreement called the Natural Gas Markets and Pricing Agreement, which was signed by Alberta, British Columbia, Saskatchewan and the government of Canada. This agreement began the process of natural gas price deregulation throughout Canada and meant that natural gas prices would be determined by competitive market forces. However, the Natural Gas Prices Protection Plan was still in effect at this point, defending Albertans against unreasonably high natural gas prices and so an amendment was made to the program in 1986 to allow municipally-owned gas utilities to obtain rebates without the necessity of being fully regulated by the board. As a result, all regulated municipally-owned gas utilities passed bylaws to remove themselves from the board’s jurisdiction. In the end, the Natural Gas Prices Protection Plan was allowed to fully expire in 1988, mainly as a result of the decline in natural gas prices that came after deregulation. Another result of natural gas deregulation, deferred gas accounting procedures were established by the Public Utilities Board in 1987 for investor-owned natural gas utilities, as a way to accommodate extensive and sudden fluctuations in the price of natural gas.

“Natural gas rate increases over the last eight years have been very significant. The major reasons have been the policies of federal and provincial governments respecting pricing and taxation, inflation and the attendant increases in the cost of capital, high growth rates and the effects of conservation.” – Board member, Harold Williams in a paper presented to the Canadian Association of Members of Public Utility Tribunals, September 1983


Before turbine generators like the one pictured here at a TransAlta generation facility can be installed, companies must apply to the Alberta Utilities Commission for project approval. The Commission considers cost, location, environmental impact, and many more factors before approving or denying an application.

Photo courtesy of TransAlta 55


Protecting the interests of Albertans The beginning of the 1960s to the end of the 1980s was an era of extraordinary growth within Alberta, and this development created many challenges and opportunities for the small Public Utilities Board. The board continued to steadily focus more and more on the utilities aspect of its jurisdiction as the provincial government removed responsibilities that were not related solely to the regulation of Alberta’s public utilities. Then in 1989 the Supreme Court of Canada ruled that Alberta Government Telephones, the only telecommunications company that the board regulated, was an interprovincial enterprise and was therefore outside of the board’s jurisdiction. The work of the Public Utilities Board was affected by policy changes, fluctuating attitudes towards regulation and increased environmental awareness. Although the board consistently tried to make the best possible regulatory decisions in every different circumstance that was presented during this 30-year period, the 1990s began with a feeling of unrest and the anticipation of change on the horizon.

“That is a testament to the intelligence and the expertise of the Commission, but also its flexibility: it sees change coming – it doesn’t have to run and embrace the change – but it accepts it, it adapts to it.” – Jim Wachowich, legal counsel for the Consumers’ Coalition of Alberta

Linemen were extremely busy between the 1960s and 1980s, when transmission and distribution infrastructure development was rapidly expanding. This period of growth brought many challenges and opportunities to the small Public Utilities Board. The City of Calgary, Corporate Records, Archives CalA98061003

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Growing utility development in Alberta kept the Public Utilities Board busy in the 1980s and as a result its focus narrowed even further when a Supreme Court ruling placed telephone companies outside of its jurisdiction. This allowed the board to dedicate more time and resources to facility applications for power lines, like the one pictured.

The City of Calgary, Corporate Records, Archives CalA980302007 57


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EVOLUTION

1990-2008

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An uncertain future For Alberta’s utility sector, the 1990s began with great instability and uncertainty. Many industry stakeholders were not satisfied with the mechanics of the utility system that existed but were not sure how to improve it. The Electric Energy Marketing Act was unable to remedy the uneven prices that Albertans were paying for electricity in different parts of the province and it created tensions between the various utility companies. Natural gas prices throughout the world had steadied and the deregulation of Canada’s natural gas market seemed to be working well, but it was not clear if that stability would last. And although the Public Utilities Board was continually improving on its job of serving Alberta as the province’s public utility regulator, some groups believed that the public would be more efficiently served if the regulation of the utility industry was organized in a different way. As a result, the government of Alberta held discussions in 1991 to determine whether the regulatory framework and structure of the utility industry would be effective for the future. A resulting paper called Regulatory Framework for the Electric Power Industry was circulated in 1992, and it discussed whether steps were needed to address redundancies or gaps in the Public Utilities Board’s and Energy Resources Conservation Board’s jurisdiction over the electric industry. According to the paper, there was general agreement among stakeholders about the need for clarification and coordination of the responsibilities of the two boards. The provincial government of the time, led by Ralph Klein, was also very interested in making all government services as cost effective as possible, and so the discussions were also focused on finding ways to cut costs within the operations of the boards. These discussions and the corresponding paper initiated a dialogue The provincial government, led by Premier Ralph Klein, had a tremendous between the provincial government, the two regulatory boards and the important impact on the electricity industry — and in turn the Public Utilities Board players within the utility industry in an effort to find the best way to serve Albertans, — during the 1990s. amid the realities of modern industry.

“The responsibilities of boards and utilities for planning are not sufficiently articulated or necessarily consistent.” – Regulatory Framework for the Electric Power Industry, page 12 60


Milk is no monopoly In 1991 the government of Alberta decided to deregulate the minimum retail price of milk, effectively removing almost all milk duties from the jurisdiction of the Public Utilities Board. The board had expressed serious reservations over its involvement in the milk industry for many years as it viewed milk to be a competitive industry that did not meet most of the characteristics of a traditional public utility. The milk industry was not a natural monopoly and often the minimum retail price that was decided upon by the board ended up being the actual price that was charged to the consumers. Meaning the board was directly controlling a product that it didn’t seem to have any reason to control. But at the same time, milk was still considered by many to be an important commodity that ought to be protected in the interest of Albertans.

“One of the popular misconceptions is that the fluid milk industry must be a public utility because the Public Utilities Board sets the minimum price for fluid milk. Nothing could be further from the truth. If the fluid milk industry is tested against the characteristics of a public utility, it does not meet all of the qualifying characteristics.” – Chairman William Horton in a paper presented to the Alberta Institute of Agrologists, March 10, 1982

In a milk issues’ inquiry that was conducted by the board in 1981, the Consumers’ Association of Canada (Alberta division) called milk a “unique food” and the “one food that outranks all others in nutrient value.” However, in the end, the board decided that its prescription of minimum prices in milk’s non-monopoly environment was only one possible method of protecting milk producers and that price competition might actually prove to be a good thing for Alberta’s milk industry. And so while the retail price was deregulated and left to natural market forces in 1991, the board continued to regulate the minimum price for milk for producers and wholesalers until 2008. The deregulation of milk was a part of the overall trend of the 1990s, which emphasized less government interference in the utility industry and a government policy shift towards staying out of the affairs of business wherever possible.

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Combining regulators Eventually, further changes came to the regulation of the utility industry as a result of the discussions that had begun in 1991 about the roles of the Public Utilities Board and Energy Resources Conservation Board. Legislation to begin the process of merging the two boards was passed in the spring of 1994. It was believed there would be fewer overlaps in the work of the boards if they worked together, and many people also viewed the merger as an opportunity to find some cost-saving initiatives within the organization of the boards. Part of the issue was the division of authority between the boards, which was clearly seen when the Public Utilities Board delayed the recovery of costs for Edmonton Power’s (now Capital Power) Genesee and Sheerness generation plants. The Energy Resources Conservation Board had already approved the plants and gave Edmonton Power the go-ahead to build them, but the Public Utilities Board decided not to allow the costs associated with building the plants into the rate base that Edmonton Power could charge, concluding that the new generation facilities were not needed to serve Albertans with electricity. Many people saw in this example a clear indication that the boards were not working as efficiently as they could, and a debate over the relationship between the Public Utilities Board’s and Energy Resources Conservation Board’s areas of jurisdiction began. In the words of Jim Beckett, an engineer who worked for ATCO Electric during this period, “It was like the regulators were getting two kicks at the cat, and that was pretty uncomfortable.” And so in 1995 it was decided by the government of Alberta that the two boards would be combined to create the Alberta Energy and Utilities Board with the goal of providing a more streamlined and efficient regulatory process. The new board simply assumed the jurisdiction of each of the previous boards, both of which continued to exist as separate legal entities operating under their respective enactments. The Energy Resources Conservation Board was many times the size of the Public Utilities Board in terms of employees and there were concerns that the Public Utilities Board’s reputation for doing important work and its legacy of excellent public service was going to be overshadowed by the much larger Energy Resources 62

Conservation Board. The two organizations also worked in very different ways; with different methods of regulation and different computer systems. Some believed that because of these differences the two organizations were not going to be compatible when combined. However, measures were taken to try to ensure the two boards were treated equally, such as giving the organizations equal billing within the name of the new board. It turned out that more decisions were issued by the utility side of the Energy and Utilities Board than the energy side. The provincial cabinet of then-premier Ralph Klein, fighting to control budget deficits brought on by falling energy prices, was a main impetus behind the creation of the Energy and Utilities Board, even going so far as to appoint the first chairman. Klein asked politician Ken Kowalski to step in as the board’s first leader, a move that many people thought disregarded the Public Utilities Board’s and Energy Resources Conservation Board’s long tradition of having expert leaders who understood the intricacies of the oil, gas and utility industries. Klein having that much of a say in the inner workings of the board also made many think that the new Energy and Utilities Board would not be as politically independent as the previous boards, possibly even being easily influenced by the whims of the government rather than the facts of the industry. And so Kowalski was replaced by Celine Belanger as the new board’s first chair, where she was immediately tasked with reducing staff and operational costs. Alberta’s first regulatory agency continued its work, making the best of the situation it found itself in and consistently striving to ensure excellent utility service at fair prices for all Albertans.

“Having a single board deal with all aspects of regulation of electricity would appear to allow for clearer criteria and simpler coordination of plant approval and rate-setting decisions.” – Regulatory Framework for the Electric Power Industry, page 18


One reason the provincial government chose to combine the Public Utilities Board and the Energy Resources Conservation Board was to solve issues surrounding a division of authority between the two regulatory bodies. This issue was evident in decisions made by the Public Utilities Board, including the delay in the recovery of costs for Edmonton Power’s Genesee Generating Station, pictured, after the Energy Resources Conservation board had already approved the project.

Photo courtesy of Capital Power 63


The first phase of deregulation brought about interesting changes for utility companies, one of which required them to unbundle their generation, transmission and distribution assets for regulatory, accounting and functional purposes. This allowed all power producers to access transmission assets equally, taking away part of the monopolistic environment that previously characterized the utility industry.

Photo courtesy of ATCO Electric 64


Introducing electricity deregulation The 1990s was an important decade for the regulation of the utility industry not only because of the implementation of these organizational changes, but also because of massive legislative developments that were initiated by the provincial government. Alberta was the first Canadian jurisdiction to implement a restructured power market with the proclamation of the Electric Utilities Act in 1996, which started the restructuring process. The key purpose of the 1996 Electric Utilities Act was to establish a competitive market for electricity generation and to set up a number of transitional measures to move from regulation to competition. The new legislation established a framework for a competitive electricity market that was designed to minimize the cost of regulation and provide incentives for efficiency. This new marketplace was based on the goal of providing fair and open competition between generators, ensuring that the benefits and costs associated with the existing generators would continue to be shared equitably by both the existing and future customers throughout the province. This change was made possible by technological developments that allowed generating units to be much more efficient at much smaller capacities. Proponents of deregulation argued that vertical integration was no longer necessary to ensure efficient electrical service to all Albertans, which meant that independent power producers were able to compete with existing incumbent generators. Restructuring also worked within Klein’s strategy of reducing the scope of provincial government involvement and relying instead upon free-market principles. The provincial government no longer saw electricity as a commodity that needed to be regulated, and many industrial customers argued that competition would lead to lower prices. Deregulation became a feasible option for the first time in the history of Alberta’s utility industry.

“There is no reason to maintain the old structure of regulated monopolies in the generation sector…Continued regulation of a market that can be competitive creates unnecessary regulatory costs and stifles innovation.” – Moving to Competition: a guide to Alberta’s new electric industry structure, page 3

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Another aspect of the Electric Utilities Act that had a significant impact on the work of the board was its initiation of regulatory techniques that promoted agreement between stakeholders outside of the traditional hearing structure. A negotiated settlement process, which allowed stakeholders to seek agreement on matters within the board’s jurisdiction and then present these negotiated settlements to the Energy and Utilities Board for approval, was included in the legislation. This process was one attempt to conserve board resources in the interest of efficiency, by saving a significant amount of time and money for all participants in comparison to the typical board hearing process. Another major change brought about by the legislation was requiring vertically integrated utility companies to unbundle their electric energy services by function (generation, transmission and distribution) for regulatory, accounting and functional purposes. Transmission assets had to be decoupled from generation assets so that other power producers could access the transmission grid. Generation assets needed to be separated in order to reduce market power and depart from the monopoly environment that had previously existed. Although only the generation assets were being deregulated at this point, this unbundling meant that the three major provincial utilities that had existed before 1995, TransAlta Corporation, Alberta Power Limited (now a part of ATCO Limited) and EPCOR were unbundled into seperate transmission, distribution and generation components requiring more regulatory resources than needed prior to restructuring. It was a clear example of how policy decisions that were made by the provincial government could completely change the operations of the Energy and Utilities Board.

with the Electric Utilities Act, the Energy and Utilities Board held hearings in 1996 to restructure electricity tariffs, and each major utility filed an application with the board to separate its costs by function. Initially a key function was to establish a set of legislated hedges between generators and distribution companies. In an effort to address market power concerns and to ensure the benefits (and costs) of existing legacy generation units were shared with customers, legislated hedges were established by the Energy and Utilities Board that, by and large, insulated existing generation owners and customers from power pool price volatility. Despite all of those changes, the Energy and Utilities Board continued to regulate the transmission and distribution sides of the industry as it did before the Electric Utilities Act was introduced.

Three organizations were set up in 1996 to organize and facilitate the restructured industry: the Power Pool of Alberta, the Transmission Administrator, and the Market Surveillance Administrator. The Power Pool of Alberta was an independent and open-access pool that functioned as a spot market for the buying and selling of electricity. The Electric Utilities Act required that all electricity bought and sold in the province had to be exchanged through the Power Pool, which was solely responsible for balancing supply and demand and determining an hourly electricity price. The Power Pool was overseen by a council of representatives from throughout Alberta’s electricity industry in an attempt to facilitate openness and fairness for all stakeholders. The Transmission Administrator replaced a joint venture of existing transmission facility owners called the Grid Company of Alberta Limited, and it provided open access to the electrical grid and filed transmission tariffs. These tariffs were established by the Transmission Administrator to recover system access According to Nancy King, a current employee of the Alberta Utilities Commission costs from distributors and generators, and they were subject to the approval of the who joined the Public Utilities Board in 1988, deregulation did not begin without Energy and Utilities Board. The Market Surveillance Administrator had the job of some hesitation. Many of the board’s employees were concerned that there would ensuring the electricity market was being operated in a fair and openly competitive not be a place for them within this newly deregulated market, and it was a low point manner. And so in this time of great change, there were many opportunities for in overall morale because of these massive organizational changes. people to challenge themselves and be involved in creating a new environment. However, it was also a very exciting time for many people within the industry – a once-in-a-lifetime experience of completely overhauling a system that had been in place for more than 80 years. To fully introduce the changes that were brought about 66


Deregulation meant that the two main privately owned utility conglomerates at the time, Alberta Power Limited and TransAlta, had to be split into separate generation, transmission and distribution companies, while also allowing new players to enter the market. As the industry underwent changes, the Energy and Utilities Board had to learn to regulate within a new environment. Photo courtesy of ATCO Electric

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Refining deregulation The process of electricity restructuring continued in 1998 when the minister of energy, Steve West, introduced legislative changes through the Electric Utilities Amendment Act, which completed the electricity restructuring policy framework. With the amendments, came the removal of the legislative hedges and the introduction of customer choice in the form of retail competition as of January 1, 2001. The legislative hedges were always viewed as temporary and the 1998 amendments replaced the hedges with power purchase arrangements. The Balancing Pool was also introduced in 1998 and was created to manage the financial transactions related to the auctioning of the power purchase arrangements, which were contracts to sell the rights to the output of existing generating units to qualified buyers. These auctions occurred in 2001, and afterwards the Energy and Utilities Board no longer regulated the cost recovery for these generating units. The board approved the form of the power purchase arrangements and the auction rules in 1999.

“It was quite an exciting time and probably a unique experience…a real world example of deregulating an industry and then going and having to live in what you participated in.” – Guy Bridgeman, senior vice-president and chief financial officer at EPCOR Utilities Inc.

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TransAlta’s Sundance power generation facility produces power sold under a power purchase arrangement, which gives a retail buyer the right to the facility’s electricity output.

Photo courtesy of TransAlta 69


The Alberta Electric System Operator was formed in 2003, and given the responsibility to manage the operation and planning of the provincial electric grid. While they do not build or own transmission assets, they monitor the exchange of electricity over the wires and monitor the province’s load to ensure safe and reliable access to electricity for Albertans. Photo courtesy of the Alberta Electric System Operator 70


Deregulation taken further In 2001 the full restructuring of Alberta’s power market came into effect. First, control of the output from the legacy vertically integrated generation assets was auctioned off to a number of buyers through the power purchase arrangement auctions. All power purchase arrangements took effect on January 1, 2001. The effect of the auction was to eliminate regulated pricing for generation.

ultimately acquired by FortisAlberta Inc. The Energy and Utilities Board approved the sale of assets after conducting public hearings to understand consumer concerns. The Energy and Utilities Board now had the job of approving distribution tariffs and the regulated rate tariff for municipally owned utilities with affiliates operating outside of its boundaries. This meant that more of the operations of EPCOR Utilities Inc. in Edmonton and ENMAX Corporation in Calgary were brought under the jurisdiction of the board.

The second key development was to introduce full retail power deregulation where customers would be free to choose a competitive retailer. The government required that a regulated rate option be offered to customers by utilities for up to five years as a way to help customers transition into the competitive retail electricity market. The regulated rate option was set by the Energy and Utilities Board.

The Office of the Utilities Consumer Advocate was created in October 2003 with the mandate of representing the interests of small electricity and natural gas consumers (residences, farms and small businesses) in Alberta, helping to ensure they have enough information to make informed decisions in the restructured electricity market. The Alberta Transmission Regulation was enacted in 2004 and supplemented As restructuring came to a head in late 2000, just prior to the retail market opening, the Electric Utilities Act. It detailed transmission system planning, reliability power prices were at record highs in Alberta. Some of the reasons for these high standards, facility projects, costs, line losses and credits; specifying the board’s prices related to the restructuring process, while others, such as high natural gas responsibilities regarding their regulation. The provincial government was frequently prices, did not. As natural gas prices retreated and the restructuring process became making both major and minor policy changes to ensure Alberta’s newly restructured more familiar, prices began to stabilize. A key factor in understanding and accepting electricity industry was operating as smoothly and as efficiently as possible. The a market-based approach to electricity service for both policy makers and consumers Energy and Utilities Board was engaged and active throughout the entire process, was understanding that price spikes are a necessary part of a well-functioning watching out for the best interests of Albertans and making sure that necessary market. regulation was applied to protect consumers. The Alberta Electric System Operator (AESO) was formed in 2003 as the independent system operator. It combined the functions of the Power Pool and Transmission Administrator into one entity. Now that customer choice and competition were key cornerstones of Alberta’s policy framework, open access to the transmission grid became critically important. While the policy framework was clear that ownership of the legacy vertically integrated utilities was to remain untouched, the law required separation of accounts for generation, transmission and distribution. Some companies took the opportunity to rationalize their assets, most notably TransAlta. TransAlta sold off its distribution and transmission systems. AltaLink Management Ltd. purchased TransAlta’s transmission business, becoming Canada’s first independent transmission provider. Meanwhile the distribution assets were sold and

“It wasn’t necessarily about least cost in the near term, but serving the public interest in a broader way…I think there was a transition and a change in the role of the regulator that was never fully defined.” – David Erickson, president and chief executive officer of the Alberta Electric System Operator

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Reactions to change Nearly everyone who works within Alberta’s electricity industry has their own unique opinion about restructuring and everyone who participated in the changes had their own unique experience. It would not be fair to dismiss the endeavour as a failure or to praise it beyond its due. It is impossible to know what the electric industry in Alberta would be like now if deregulation had not occurred and the government had stuck with the status quo of vertically integrated, investor-owned utilities. Neil McCrank, who was the chairman of the Energy and Utilities Board during most of the restructuring process, believes that the deregulation of the electricity industry “has provided opportunities for new generation sites, like wind, to come onto the scene which might not have taken place in the way it was structured before. It provides a foundation for innovation to work its way through the electricity system.” Scott Thon, president and chief executive officer of AltaLink argues that restructuring has been a “spectacular success” mainly because the industry players have developed “very efficient investment…at very low cost, and the government’s not carrying any debt because of it.” One of the main criticisms of the restructured market is that it is even more complicated than before, meaning the average electricity consumer has a harder time understanding it and may therefore be challenged to make informed decisions. Jim Beckett, who was a participant during the process of creating the original Electric Utilities Act, says that he’s “still not convinced that restructuring was the right thing to do because we have not seen the level of competition on the generation side of the business that was anticipated, it’s added significant additional costs to the industry, and it’s a lot more complicated.” Personal opinions aside, most everyone agrees that the Energy and Utilities Board always tried to make the best of each situation in the interest of protecting Albertans and was always worked within complex conditions to come to clear and professional decisions that benefited the entire industry. 72

“It was an awful lot of intelligent, knowledgeable, expert people trying to reach resolution on important issues.” – Kemm Yates, regulatory lawyer


TransAlta’s Bearspaw Dam is a hydro-generation facility that currently operates in Alberta’s deregulated electricity market. The premise of deregulation is to encourage more players in the industry, to increase competition in generation, spark innovation and ultimately deliver better service to Albertans.

Photo courtesy of TransAlta 73


Powerline hearings Deregulation introduced significant change and complexity in how Albertans receive electricity service. The structure of the market was complex and difficult to understand – this led to confusion and frustration for some. In addition to complex changes to the generation and retail markets, changes were also introduced into the approval process for building and operating new transmission lines. Prior to deregulation the approval process involved one application and it was clear to landowners how the process worked and how they could get involved. With restructuring, the question of whether a transmission line was needed was separated from the question of where it should be located. This led to confusion for landowners both in how the process worked and when they could get involved. This confusion and frustration came to a head in 2007 during an Energy and Utilities Board hearing for a proposed transmission line between Calgary and Edmonton. The hearing was contentious and emotions ran high – ultimately the hearing was disrupted both vocally and physically. The Energy and Utilities Board relocated the hearing to a courthouse a few weeks later. At the reconvened hearing there were concerns expressed about safety and private security contractors were hired. One contracter who represented himself as a landowner was invited to participate in an intervener’s conference call. That action led to a charge by interveners that the Energy and Utilities Board had spied on them and breached solicitor-client confidentiality. The Energy and Utilities Board’s credibility and reputation were tarnished and the proceedings were ultimately voided by the board. All of this occurred during a sensitive period in the Energy and Utilities Board’s history. The board was without a chair because Neil McCrank had retired about one month before the incident, and the provincial government had just recently announced its plans to re-separate the Energy Resources Conservation Board and the Public Utilities Board. It was decided that although the two boards were able to work together as the Energy and Utilities Board, the few efficiencies that they had been able to find as one board did not really convince anyone that they were better as one organization. According to Gord Engbloom, an expert economist with many years of experience working as a witness before both boards, “The Energy Resources Conservation Board and the Public Utilities Board were two very different organizations. They had different styles about them, they did different things and they did things differently.” 74

The regulation of public utilities involved primarily economic matters arising from rates that utilities charged their customers. The regulation of upstream oil and gas involved fundamentally different questions about whether and where new facilities should be located and how they should operate. As a result, for much of Alberta’s history, those jurisdictions were divided and carried out by the Public Utilities Board and the Energy Resources Conservation Board. From time to time, however, these jurisdictional paths crossed, most notably when the Energy Resources Conservation Board had approved a power plant to be built but the Public Utilities Board ultimately denied the power plant in rate base due to intervening changes in provincial demand. This gap was narrowed by merging the two boards. Ultimately two main factors led to the decision to once again divide the regulatory responsibilities and realign the Energy and Utilities Board into two agencies. First, the workload associated with upstream oil and gas regulation continued to grow after the merger and was viewed as becoming an even bigger job with burgeoning activity in unconventional and oil sands supply. Second, the traditional utility rate-making role had become significantly more complex with market restructuring. Importantly, the government recognized and responded to concerns about how the rule making, compliance monitoring and adjudicative functions were being carried out in the wholesale market. In addition to clarifying roles between the Alberta Electric System Operator and the Market Surveillance Administrator, the government reasoned that a separate independent regulator to adjudicate wholesale market matters was required. And so the Alberta Utilities Commission Act was passed in 2008, dissolving the Energy and Utilities Board and creating the Alberta Utilities Commission. Further support for the decision to split into two agencies came later when the government dissolved the Energy Resources Conservation Board and created the Alberta Energy Regulator with a new consolidated, comprehensive jurisdiction for oil and gas regulation. The Commission retains some of the Public Utilities Board’s previous powers over diverse matters such as the determination of compensation to be paid to ambulance service providers and the compensation paid to owners of businesses affected by a loss of access due to city-approved work. However, at this point in the utility regulator’s long life, it’s focus is truly upon the regulation of the now restructured utilities industry and the protection of the best interests of Albertans.


By 2009, the newly formed Alberta Utilities Commission had settled into its place as the province’s independent utilities regulator under the leadership of its chair, Willie Grieve.

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I N N O VAT I O N

P R E S E N T

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With a change in mandate, the Commission became responsible for considering more than just the cost of an application and expanded their consideration to include the economic, social and environmental effects of applications as well. 78


A new era as the Alberta Utilities Commission The Alberta Utilities Commission began its operations on January 1, 2008, as an independent organization with a newly focused – and significantly expanded – mandate. The mandate first included updated regulations for Alberta’s modern electricity industry. The electricity industry is an ever-changing environment that requires constant adaptability and although the board had operated well as a part of the Energy and Utilities Board, its steadily growing workload was such that the need for a specialized, independent utility regulator became clear. When the Energy Resources Conservation Board and Public Utilities Board had been combined in 1995, the Energy and Utilities Board had dealt with fewer than 19,000 energy and utility applications. But by 2006 the number had increased dramatically to more than 60,000, which meant that the electricity regulator had to effectively keep up with that demand. And so the separation of the boards was seen as a good method to allow the regulation of the electricity industry to successfully continue in the interests of Albertans. The Alberta Utilities Commission brought with it the role of approving utility facility applications, which had previously been the responsibility of the Energy Resources Conservation Board.

“At the end of the day, whether it was the Public Utilities Board or the Energy and Utilities Board or the AUC…they are all very well respected quasi-judicial bodies, they guard their independence jealously, the commissioners and staff take their roles very seriously and it’s based on evidence and based on law.” – Guy Bridgeman, senior vice president and chief financial officer at epcor

The Commission has a duty to test applications and evidence submitted to it in determining the public interest. Interveners represent private interests before the Commission, whether industrial or landowner, and the Commission takes these private interests into account when considering what constitutes the public interest.

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The creation of the Alberta Utilities Commission also gave a significantly expanded mandate beyond the traditional areas of regulation. The Alberta Utilities Commission Act required the Commission to adjudicate issues related to the development and operation of the wholesale electricity market in Alberta as well as the retail gas and electricity markets in the province. The Commission’s new mandate in this area was aimed at ensuring electricity markets operated in a fair, efficient and openly competitive manner. The Alberta Utilities Commission was given the responsibility to adjudicate when there are alleged contraventions of specific electric and gas utilities legislation; Alberta Utilities Commission decisions and orders; independent system operator rules; as well as agency and market participant conduct. The Alberta Utilities Commission’s mandate now includes ruling on objections and complaints regarding market rules and standards. This gave it the responsibility to sit as an adjudicator in cases brought by the Market Surveillance Administrator. This was unlike other roles where the Commission had the duty to protect the public interest and to test the applications before it. In these cases, the Market Surveillance Administrator (on behalf of Albertans) would now bring a case for the Alberta Utilities Commission to adjudicate. This new role dictated that different processes be established to reflect the fact that in these instances it was not the Alberta Utilities Commission’s duty to test the case – it was the Market Surveillance Administrator’s duty to make the case and the company’s duty to meet the case. With offices in Edmonton and Calgary, the new Alberta Utilities Commission began its work. It established a vision for itself, a yardstick for self-evaluation, to be a trusted leader that delivers innovative and efficient regulatory solutions for Alberta. And it pledged to be fair, open and transparent in its regulatory processes.

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“Our goal is to ensure that we always have in mind the potential mischief we are called upon to remedy and the policy we are to support, that our processes are fair, open and transparent, and that we make sound, principled decisions.” – Willie Grieve, Chair, Alberta Utilities Commission in an address to the Calgary Chamber of Commerce, May 2008


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Announced in 2009, Bill 50 made the government of Alberta responsible for identifying the need for critical transmission infrastructure projects. 82

Photo courtesy of the Alberta Electric System Operator


Bill 50 The first major piece of legislation that would challenge the new Commission was the Electric Statutes Amendment Act, which was announced in 2009 and was more commonly known as Bill 50. The act allowed the government of Alberta to deem there was a need for certain electrical developments that it concluded were critical transmission infrastructure projects. One view at the time was that these types of projects were essentially no different than the government deciding on any other infrastructure project for the public interest. The government said it chose to intervene because “Alberta’s transmission system [had] been working at or near its limits for extended periods of time, increasing the risk of widespread power outages and unreliable service.” Bill 50 proved to be controversial because it removed the need application stage with the Alberta Utilities Commission and a public review of approval to modify the power grid for several major projects. Bill 50 was deemed a necessary step during an extreme situation. The Alberta Utilities Commission was still responsible for making decisions on the siting of transmission facilities, including determining the specific location of the critical transmission infrastructure projects and the hosting of public hearings to hear Albertans’ concerns were still considered extremely important.

The proposed Heartland Transmission Project was the first of four of these critical transmission projects to come before the Commission. The Alberta Utilities Commission transformed its review process for this first project to engage the potentially-affected communities. In March of 2010 it held an extensive series of public information sessions prior to even receiving the application to explain its hearing process, how to participate and to explain the Commission’s local intervener funding process. To maximize the preparation time for parties that might be directly and adversely affected by the Commission’s decision, and in recognition of the scope, nature and timeframe of the project, the Commission also adopted a new and streamlined standing process for participants which granted automatic standing within a certain distance, the opportunity to pre-register in the proceeding before the Commission even received the application, as well as two different participation options for the hearing apart from full participation – including the opportunity to speak directly to the Commission panel at an evening session in the local community. The Commission later applied this new process to other critical transmission projects and made it an unwritten policy to conduct community information sessions for most of its facility applications.

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Demonstrating innovation and efficiency The Commission went on to systematically look at, and consult with its stakeholders, as to whether other improvements and efficiencies could be implemented on the electricity facilities side of what it did. Subsequently, it introduced many changes to streamline applications and reduce regulatory burden but still retain opportunity for landowner input – such as self-imposed full cycle timelines for both rates and facility applications to shorten processing times, a new buildable-area concept for wind farm applications and an easier micro-generation process. The Alberta Utilities Commission also looked at whether in fact it could be less reliant on some aspects of what is termed ex-ante regulation and, for certain low risk applications, shift to a compliance-enforcement approach. It introduced application exemptions for certain facility enhancement and small power plant projects. The Commission also worked with stakeholders to pilot a government project that created a cost-oversight management function to improve the cost management and accountability of transmission projects, as well as its own review of possible mitigation measures that might smooth the customer impact of the significant transmission build launched from 2011. As part of the government’s general focus towards promoting more environmentally friendly operations throughout the oil, gas and utilities industries, the Alberta Utilities Commission was given the responsibility by Alberta’s then-minister of energy Ron Liepert in 2010 to gather information and report back on the issues of enhancing conservation, developing green energy sources and analyzing the corresponding regulatory process. The Alberta Utilities Commission was asked to review the regulatory approval process for hydroelectric facilities, determine how smart grid technology could be used to modernize the electric system, and review the regulatory rules surrounding customer choices regarding both natural gas and electricity. In a way, this demonstrated the continuing relationship between the Alberta Utilities Commission and the provincial government in their aim to find efficient solutions to problems that are truly important to Albertans. The Alberta Utilities Commission introduced further innovations in October of 84

2011 when utility disconnection and reconnection practices were modernized and sharpened by the Commission to protect vulnerable customers. The initiative coordinated the utility companies, social agencies and the privacy commissioner in an effort to make sure that no Albertan was stuck in the winter without power or natural gas. These initiatives of the Alberta Utilities Commission respectively highlighted the sharpened focus and relevancy of the Commission within the modern industry, its focus on public service in the interests of Albertans and its being a valuable source of expertise for the government. The Alberta Utilities Commission recognized that its work on rate regulation goes to the very heart of its mandate in many ways, as ultimately it translates to what Albertans pay for their electricity and natural gas utility services, ensuring they receive safe and reliable service, at fair and reasonable rates. In 2010, the Alberta Utilities Commission ramped up its efforts to implement more competitive pressures to the historically monopolistic utility market in Alberta. Willie Grieve served notice of the importance of this initiative in his very first public speech as the first chair of the Alberta Utilities Commission when he noted that in many ways the regulation of utilities rates remained largely unchanged from the early days, but that, “the utilities we regulate look a lot different than the utilities of the past and the rates we regulate are different as well. The electricity and natural gas markets are no longer end-to-end vertically integrated monopolies. There is now competition at the production and generation end, and at the retail end.” Working with industry and consumer groups, the Alberta Utilities Commission pushed forward and developed a new rate regulation initiative called performancebased regulation, which came into effect for distribution utilities on January 1, 2013. Performance-based regulation was designed to change the way distribution utility rates are set in Alberta, to make companies more efficient and keep utility costs lower than they might otherwise be. It is a method of calculating utility rates using a formula that adjusts utility rate changes for inflation, then subtracts an enhanced efficiency or industry productivity factor, which should


provide incentives to utility companies to operate more efficiently. Performancebased regulation replaced the cost-plus rate-of-return style of rate setting that had been used throughout the Alberta Utilities Commission’s long history. It was designed to reduce the number, length, cost and complexity of regulatory hearings. And although the Commission had already been monitoring service quality standards throughout the utility industry, performance-based regulation provided a window for safeguards and enforcement measures to be further strengthened to ensure that consumers are being treated as fairly as possible.

Since its inception in 2008, the Alberta Utilities Commission has taken on a variety of initiatives that Albertans have identified as being important. These include gathering information on developing cleaner energy sources, modernizing the electric system with smart grid technology and finding ways to protect vulnerable customers from losing access to essential services in the winter months. Photo courtesy of TransAlta 85


An evolving Commission As the Alberta Utilities Commission moved forward, the critical importance of electric and gas utilities as essential services, and to Alberta’s development, remained undisputed. However, with an evolution from the days where natural monopolies dictated rates and service, to an environment where competitive markets were now possible, meant an evolution was also needed in the way the Alberta Utilities Commission approached certain areas of regulation. In particular, the Commission’s mandate for regulation related to the wholesale electricity market dictated a greater emphasis on understanding economic forces and dynamics, along with the interplay of market participants. As a result, in 2014 Alberta Utilities Commission Chair Willie Grieve added a new lens to the regulation of public utilities and sharpened the oversight of the competitive market by dedicating a new visiting scholar position named after the late Dr. Alfred E Kahn, known for his extensive contributions to streamlining regulation and enabling deregulation and competition in a number of industries. This new position reflected the increased emphasis by the Commission on applying sound economics and competition law principles to optimize outcomes for both companies and customers. It brought the expertise, analysis and perspective of a recognized scholar actively engaged in economics research to Alberta’s regulatory table.

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“The industries we regulate continue to evolve and we need to enhance our multidisciplinary resources to anticipate and respond.” – AUC Chair Willie Grieve


Giving a voice to Albertans Others have also commented about how the Alberta Utilities Commission has gone about its business mindful of the past but with a focus on the future. The regulation of Alberta’s utility industry has always been fraught with complex issues and controversial situations, which will not change as long as utilities are a necessary part of the everyday lives of Albertans. According to Laurie Smith, a prominent Calgary-based utility regulatory lawyer, the Alberta Utilities Commission tries “to make sure that everybody has a voice and that they are able to express what’s really on their minds on the issues that matter most to them…The process is a very well-organized way of conveying complex issues in an understandable way… it’s really founded in goodwill.” It is the job of the Alberta Utilities Commission to try to find the perfect balance between the interests of all of the industry stakeholders that is, in the end, most beneficial to the citizens of Alberta.

The Commission aims to find a balance between the interests of all industry stakeholders to arrive at a decision that is most beneficial to the citizens of Alberta. To accomplish this, the AUC provides funding to interveners who represent the concerns of the public so that their voices may be heard within the regulatory structure. 87


The backbone of the Commission One of the main things that has contributed to the Alberta Utilities Commission’s achievements as a regulator is its constant focus on hiring and developing intelligent, hardworking people. Nancy King, who has known the inner workings of the Public Utilities Board, Energy and Utilities Board and the Alberta Utilities Commission better than most, said that her “experiences with coworkers have been very good and even the leadership overall has been very good,” and that the relationships that she’s developed over 20 years are the reason that she has continued to work at the Commission. Scott Thon, president and chief executive officer of AltaLink, echoes this idea from the industry’s perspective when he states that “working with a regulator is more about the people than it is about anything else…How effective and how easy a regulator is to work with depends on the leaders and the people there.” To him it has always been clear that “there are good people at the Alberta Utilities Commission.” Without having high quality leadership and skilled employees who are passionate about what they do, it would have been impossible for the Commission to have been as important of a part of Alberta’s utility industry as it is today. And it is this dedication to serving Albertans’ interests that has led to the Alberta Utilities Commission’s reputation as a premier regulator. Guy Bridgeman believes “most industry players, and players from outside Alberta that know about Alberta, hold the Commission in very high regard.” Raj Retnanandan – a former Public Utilities Board employee – thinks “their views and their precedents are respected across the country.” “The AUC is a premier regulator in Canada,” says regulatory lawyer Hugh Williamson, “Primarily because of its professionalism, its highly trained and experienced staff and members…The Commission clearly has a vast experience to draw on.” This experience comes from 100 years of excellent public service to Albertans, which is an accomplishment that few organizations can claim. “Utilities underlie our everyday life and our everyday well-being in Alberta, and 88

yet it’s really sort of way off the radar screen” for most Albertans, explains Jim Wachowich from the Consumers’ Coalition of Alberta. Although everyone uses some form of utility service every day, Kemm Yates, an energy lawyer who participates in public hearings, says, “Very few people in Alberta recognize the importance of the regulated world and the importance of what the Alberta Utilities Commission does.” That is the way it has always been throughout the Commission’s 100-year history. The Board of Public Utility Commissioners began its operations as Alberta’s first regulatory agency in 1915, and was given any regulatory task for which the provincial government needed a skilled group of professionals to watch over the interests of Albertans. It grew from those humble beginnings as the industry grew, handling thousands of technical decisions every year as the Public Utilities Board. It adapted when needed, becoming a part of the Energy and Utilities Board, and even helped to facilitate many aspects of the electricity industry’s widespread restructuring. It continues to this day as the Alberta Utilities Commission, watching over the utilities, connecting communities to the services that are an everyday necessity, and always making sure that all citizens have the opportunity to make their voices heard. In this ever-changing industry where electricity prices are determined each hour and businesses come and go, the Alberta Utilities Commission has provided a solid foundation upon which every stakeholder can rest assured knowing that someone is there to make sure that the opinions are being weighed, the facts are being considered, and the interests of Albertans are being protected. For the future, beyond the Alberta Utilities Commission’s centennial, Chair Willie Grieve has signalled that the Commission will continue to pursue its leadership vision of regulatory excellence and innovation, along with fair, open and transparent processes, and sound, principled decisions.

“These may sound like lofty goals but I cannot imagine striving for anything less.” – AUC Chair Willie Grieve


The Alberta Utilities Commission prides itself on hiring and developing intelligent, hardworking and pleasant people. The success of the Commission would not be possible without the outstanding work of staff in its Calgary and Edmonton offices. 89


Past Chairs of the Alberta Utilities Commission

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George H.V. Bulyea 1915 - 1923

Arthur A. Carpenter 1923 - 1939

Gilbert M. Blackstock 1939 - 1953

Russell D. Hendersen 1953 - 1966

Walter Nobbs 1967 - 1973

Miles H. Patterson 1973 - 1975

Blaine Archibald* 1975 - 1976

William R. Horton 1976 - 1983


Fred Trofanenko* 1983 - 1984

Ammon O. Ackroyd 1984 - 1991

A. Calista Barfett* 1991 - 1995

Neil McCrank 1998 - 2007

William A. Tilleman 2007

Brad McManus* 2007

Celine Belanger 1995 - 1998

Carolyn Dahl Rees* January 2008 * Acting Chair 91


Employees on the next 100 years Looking towards the Alberta Utilities Commission’s second century we are inspired by our rich history of public service and energized by our unwavering commitment to innovate and improve how we do what we do. Our organization was created to protect and support our fellow citizens when the province was in its infancy, and 100 years later we are as dedicated to that mandate and responsibility as our founders. Beyond simple dedication we are encouraged knowing the work we do makes a positive and lasting impact on our neighbours, on our communities and on our province. For us, this is where public service and the public interest intersect. It is a privilege to contribute in the manner we do. We are honoured to have this opportunity to lead the Alberta Utilities Commission into the next century of service to Alberta and to Albertans.

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Nancy King, Greg Andrews, Tamsyn Filleul, Christine Runge, Alex Park, Victor Choy, Lucie Maruejols, Catherine Wall, Derrick Ploof, Liv Desaulniers, Arlene Davenport, Rita Chan, John Petch, Norman Leung, Lorrie Mullen, Jim Law, Denise Snyder, Willie Grieve, Doug Larder, Jaimie Graham, Paul Howard, Wade Vienneau, Ian Harvie, Elizabeth von Engelbrechten, Brian McNulty, Crystal Carstens, Cameron Strasser, Mark Kolesar, Giuseppa Bentivegna, Elizabeth Neuhart, Deniz Corbaci, Todd Davison, Blair Miller, Bohdan Romaniuk, Chris Arnot, Charlene Cleator, Donald Robb, Kenneth Wyllie, Tudor Beattie, Bob Yanchula, Maria Baitoiu, Bob Schroeder, Kate Coolidge, Tanis Brown, Janelle Mikal, Darin Lowther, Lungre Drongotsang, Richard Finn, Phung Nguyen, Salma Karim, Darek Kogut, Marie Robinson, Mark McJannet, Kay Holgate, Janet Abel, Janelle Pinckney, David Mitchell, Lucky Ngo, Tony Rosgen, Trevor Wilde, Terri Irving, Fino Tiberi, Chris Burt, Liying Ou, Angela Corsi, Neil Jamieson, Dwayne Ward, Andrea Laroiya, Patrick Brennan, Alan Drolet, Abhinav Ayri, Colleen Geddes, JP Mousseau, Nathan Nagy, Dan Woodland, Allan Anderson, Jay Halls, Moin Yahya, Rose Ferrer, Neil Behal, Amanda Brinker, Bill Lyttle, Annie Chen, Nubaha Mahbub, Clifford Goerz, Olexandr Vasetsky, Stephen Bruce, Shanelle Sinclair, Kevin Thompson, Trevor Richards, Lisa Tibta, Kal Elkassem, Stuart Dunsmuir, Sabi Ghavami, Wayne MacKenzie, Heather Gnenz, Cuong Pham, Anne Michaud, Mark Kavanagh, Elena Deryabina, Josephine Yau, Lorena of service to Alberta Charest, Danielle Glover, Cynthia Mandi, Jack Davis, Clayton Nieuwenhuizen, Jeremy Smith, Terry Favaloro, Ben Whyte, David Cherniwchan, Tom Chan, Keith Taylor, Kellie Benoche, Darren Scholz, Taylor McCusker, Danny Dang, Marie Kopp-van Egteren, Gwen Day, Rob Armstrong, Andrew Eckert, Kristjana Kellgren, Mark Kellner, Young Lee, Bob Clarke, Henry van Egteren, Pat Wickel, Bob Heggie, Brian Shand, Sophie Jiang, Kathy van Denderen, Alison Sabo, Mike Hagan, Andrew Davison, Shirley Hungar, James Work, Minh Nguyen, Scott McCallum, Geoff Scotton, Jim Van Horne, Holly Lee, Richard Goldberger, Shawn Allen, Viktoria Titov Kullar, Raymond Lee, Jamie Cameron, Paulina Genderka, Dmitri Bobko.

10 0 y e a r s

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Afterword by Willie Grieve One hundred years ago, with the proclamation of the Public Utilities Act, the Board of Public Utility Commissioners was established as Alberta’s first regulatory agency. The Alberta economy was growing and the infrastructure needed to support economic development was in high demand. The government of the day understood that some oversight was required in order to facilitate economic growth and ensure that customers of monopoly-supplied utility services were protected from the potential for high prices and poor service. The new regulator was charged with the responsibility to protect the public interest and 100 years later this remains the central duty of the Alberta Utilities Commission. As you have read in these pages, the utility regulator has worn many hats over the years. Indeed, every time a need arose for some form of regulation at arm’s length from the political process, the Board of Public Utility Commissioners was called upon to perform those functions. The first order was approval of a loan to build a school in Kulm, Alberta. Later, the board was called upon to regulate municipalities, the sale of stocks in companies, local railways, oil and gas exploration, telephone services and milk prices. As time went on, many of these functions were moved to other regulators so that the board could continue to focus on its central mandate, the regulation of public utility services and prices. In each case the board was steadfast in its commitment to serving the public interest and demonstrating its commitment through the use of open and transparent processes. Today, we stand on the shoulders of these generations of public servants who laid the foundations for what we do. But we cannot simply rest. The industries we regulate have evolved and continue to evolve at an ever faster rate. New corporate structures and financing models have made our tasks more complex and demand new approaches to rate regulation. New technologies have challenged traditional monopolies and required that new regulatory functions and processes be developed to support new market structures. Through all of this, the Alberta Utilities Commission’s principal function of protecting the public interest remains. The Commission must continue to protect Albertans from monopoly pricing where competition is not yet established while ensuring that the conditions for necessary investment remain. Where competition has developed, the Commission must be ready to step in where market rules do not meet legislative requirements for fair, efficient and open markets or where market participants do not comply with the rules and principles in place. In all cases, the Commission is called upon to consider social, economic and environmental factors as part of its public interest mandate and must do so in an even-handed way so that, where possible, competitive markets determine outcomes and where not, regulation promotes efficient and non-discriminatory outcomes. As we embark on the second century of utility regulation in Alberta, we are broadening our knowledge and honing new skills to meet the challenges ahead. Just as our predecessors had to learn about municipal financing, corporate securities, oil and gas production and even milk markets, we are developing our skills in new forms of 94


monopoly regulation and in the understanding of sound economics and competition law principles. We are focused on strengthening our multidisciplinary approaches to meet the challenges ahead. At the same time, we have embarked on reviews of all of our regulatory functions and have established strict timelines for us to meet in our decision-making processes, all so that we can more efficiently and effectively perform our public interest duties. In a world of evolving and increasingly complex technology, corporate structures, delivery models and economic interrelationships, the challenges of public service will become even more demanding and require even greater discipline. To meet these challenges, we learn from our history, steel our resolve and remain constantly aware of the ways in which our work shapes the evolution of the utility industry in the province so as to ensure that the outcomes of our decisions, by means and by impact, serve the public interest of Alberta both now and into the future. As I look back through our history, captured in these pages, I am grateful for the opportunity to serve Alberta as chair of the Alberta Utilities Commission in its centennial year. For me, there is no higher calling than public service. It is an honour and a privilege to serve Alberta and to serve with the talented and dedicated group of Commission members and staff, all of whom are enlivened by the challenges ahead and dedicated to serving the public interest. Thank you to all Commission members and staff who serve today, have served in the past and will serve in the future.

Willie Grieve Alberta Utilities Commission Chair

In a world of evolving and increasingly complex technology, corporate structures, delivery models and economic interrelationships, the challenges of public service will become even more demanding and require even greater discipline. 95


The Commission Today

Top row left to right: Mark Kolesar, Tudor Beattie, Anne Michaud, Bill Lyttle, Henry van Egteren Bottom row left to right: Kay Holgate, Willie Grieve, Neil Jamieson

Commission members Willie Grieve, QC, chair Mark Kolesar, vice-chair Tudor Beattie, QC Kay Holgate Neil Jamieson Bill Lyttle Anne Michaud Henry van Egteren

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Acting Commission members Dr. Patrick Brennan Kate Coolidge Gwen Day Clifford Goerz Ian Harvie Bohdan (Don) Romaniuk Moin Yahya


Our Vision The Alberta Utilities Commission is a trusted leader that delivers innovative and efficient regulatory solutions for Alberta. What we do The Alberta Utilities Commission regulates the utilities sector, natural gas and electricity markets to protect social, economic and environmental interests of Alberta where competitive market forces do not. How we do it The Alberta Utilities Commission is fair, open and transparent in its regulatory processes and delivers sound principled decisions. Our values We are partial and objective. We are accountable and strive for excellence in everything we do. We treat everyone with dignity and respect. We maintain and promote a positive work environment.

10 0 y e a r s of service to Alberta

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The Board of Public Utility Commissioners was created on April 17, 1915, to ensure supervision over services that affected Albertan’s daily lives — such as electricity, natural gas, milk, telephone rates, stocks, shares and even apple imports. The board continued its important work as the Public Utilities Board in 1960, the Alberta Energy and Utilities Board in 1995, and since 2008, the Alberta Utilities Commission.

www.auc.ab.ca

Profile for AlbertaUtilitiesCommission

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