Stockwoods successfully defends the Ontario Energy Board’s policy making process

Stockwoods lawyers Phil Tunley and Pam Hrick represented the Ontario Energy Board in an important challenge to its policy making process before the Divisional Court.  The decision is posted here.

A coalition of telecom carriers led by Rogers Communications (“Carriers”) appealed a recent Board decision setting rates chargeable by Hydro Ottawa for cables attached to its hydro poles.  In a 2005 decision, the Board had set a province-wide rate chargeable by all electricity distributers, based on a specified cost sharing methodology and aggregate, province-wide costs data.  However, that decision left it open to distributors to apply for a different local rate based on their own costs.  When Hydro Ottawa applied in 2014 to increase its rate, the Carriers sought to challenge the Board’s 2005 methodology, as well as the local cost inputs.  The Board ruled that changes to the methodology would be considered in a separate, province-wide policy review which it had already initiated.  The Carriers appealed the Board’s decision on procedural fairness grounds, among others, arguing that the Board did not give them an opportunity to be heard on a central issue in dispute relevant to the Board’s mandate to set “just and reasonable” rates.

A unanimous Divisional Court dismissed the appeal.  It held, first, that the standard of review of decisions on procedural fairness grounds does recognize a degree of deference to procedural choices made by a tribunal based on its core expertise and experience.  Madam Justice Molloy, writing for the Court, accepted that the Board in this case did not refuse to reconsider its 2005 methodology, but rather made a choice to do so in the context of a province-wide review, rather than in one or more local rate-setting hearings.  In so doing, the Board was “providing the broadest participation rights possible”  and “was enhancing, rather than circumventing, procedural fairness”.  Turning to the more substantive challenge, on the basis that the Board had fettered its discretion, the Court concluded that the Board “is not required to constantly re-invent the wheel by revisiting the methodology and starting from point zero in every case”.

 

A motion for leave to appeal was filed by the Carriers pending receipt of the Court’s reasons.

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