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PUBLIC UTILITIES - Toll methodology - Regulatory tribunals - Electricity - Rates

Monday, July 13, 2020 @ 9:15 AM  

Lexis Advance® Quicklaw®
Appeal by Manitoba Hydro from a directive issued by the Public Utilities Board of Manitoba. The appellant applied for a 7.9 per cent rate increase to all components of rates for all consumer classes. The Board unanimously denied the increase in favour of a 3.6 per cent average revenue increase. The Board’s majority also issued a directive requiring the appellant to create a First Nations On-Reserve Residential customer class that was to receive a zero per cent rate increase. One dissenting Board member opined that the Board lacked jurisdiction to create the on-reserve class. The Board approved the resulting rates schedule and subsequently denied an application by the appellant to review and vary the directive. The appellant obtained leave to appeal the question of whether the Board exceeded its jurisdiction in creating an On-Reserve class whose rate for service would be different from customers remaining in the existing residential class. The Board took the position that the creation of the On-Reserve class involved an exercise of valid jurisdiction to consider affordability as a factor in setting just and reasonable rates.

HELD: Appeal allowed. The matter was reviewable on a standard of correctness. The Board had the authority to scrutinize and create customer classifications in reviewing the rates charged by the appellant to ensure they were not unjust or unreasonable. However, the directive breached section 39(2.2) of the Hydro Act, which was intended to equalize the price of power charged to residential customers and thus required that customers were not to be classified solely based on the region of the province in which they lived or the density of the population. The directive impermissibly constituted the creation and implementation of general social policy, an area outside of the Board’s jurisdiction better suited to the federal and provincial governments. The directive resulted in the use of the appellant’s funds and revenue for government purposes contrary to s. 43(3) of the Hydro Act and in excess of the Board’s jurisdiction. As a result, the directive was set aside.

Manitoba (Hydro-Electric Board) v. Manitoba (Public Utilities Board), [2020] M.J. No. 135, Manitoba Court of Appeal, D.M. Cameron, W.J. Burnett and J.L. Lemaistre JJ.A., June 9, 2020. Digest No. TLD-July132020002