Court File and Parties
CITATION: Hamilton (City) v. The Ontario Energy Board, 2016 ONSC 6447
DIVISIONAL COURT FILE NO.: 146/16 DATE: 20161014
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
LEITCH, SACHS and NORDHEIMER JJ.
BETWEEN:
The City of Hamilton Appellant
– and –
The Ontario Energy Board Respondent
COUNSEL: Robert B. Warren, for the Appellant Maureen Helt and Ian Richler, for the Respondent
HEARD at Toronto: October 14, 2016
Oral Reasons for Judgment
SACHS J. (Orally)
[1] This is an appeal from a decision of the Ontario Energy Board (the "Board") dated March 3, 2016 (the "March Decision") in which it denied a request to review its decision of December 10, 2015 (the “December Decision”). In the December Decision, the Board denied Horizon's request for an update in the load profile in the street lighting class to reflect a reduction in the load due to the City's LED Conversion program.
[2] Section 33(2) of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sch B (the “Act”) provides that an order of the Board may be appealed to the Divisional Court, but “only upon a question of law or jurisdiction.”
[3] On this appeal, the City advances two arguments:
(1) That the Board erred in failing to provide adequate reasons for the December Decision and the March Decision. In this regard, the City concedes that this Court is entitled to look at both decisions together.
(2) The Board erred in failing to implement provincial government energy conservation policies and directives.
[4] A question that raises an alleged breach of procedural fairness is a question of law. However, in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), [2011] 3 S.C.R. 208 at para. 14, the Supreme Court of Canada made it clear that the inadequacy of the reasons does not result in a breach of the duty of procedural fairness. In view of this, there is a real issue as to whether the City’s first argument raises a question of law.
[5] There is also an issue as to whether an alleged failure to implement a government policy can be regarded as a question of law or jurisdiction. Implementing policy lies at the heart of discretionary decision making in the administrative law context. Such decisions do not lend themselves to right or wrong answers. It is in recognition of this fact that the courts have given a high degree of deference to decision makers who are engaged in this exercise.
[6] However, even if this appeal does raise a question of law or jurisdiction, we find that the Board’s December and March Decisions do meet the standard of reasonableness. The Appellant concedes that this is the applicable standard of review and concedes that:
A decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived. If any of the reasons that are sufficient to support the conclusion are tenable in the sense that they can stand up to a somewhat probing examination, then the decision will not be unreasonable and a reviewing court must not interfere. This means that a decision may satisfy the standard if it is supported by a tenable explanation even if this explanation is not one that the reviewing court finds compelling.”( Law Society of New Brunswick v. Ryan 2003 SCC 20, [2003] 1 S.C.R. 247,at (para. 55).
[7] In making its request, Horizon had put before the Board updated load data for the City’s Street Lighting class, but had not put before the Board updated load data for any of the other classes. In this regard, it is critical to note that adjusting the load profile for one class of customer has implications for all classes of customers. That is because the whole exercise is about determining what share of the costs each class will pay and cost allocation is a zero sum game. If one class’ rates go down, another class’ rates must go up.
[8] In its December Decision, the Board explained that it was denying Horizon’s request to update the City’s Street Lighting load profile because, as it had found in a previous decision (discussed below), “there is no advantage to selective updating. Until data that is more accurate is available for all classes, Horizon must continue to use the existing load profiles for the purpose of cost allocation.”
[9] In order to understand this explanation, it is important to make reference to the previous decision referred to by the Board in its December Decision. In that decision, which also related to an application by Horizon and which is dated December 11, 2014, the Board more fully elaborates upon its concern with selective updating as follows:
While the use of more up to date data is generally preferable, in this case, the Board is concerned with the inequity that may result from selective updating. The Board is sympathetic to Horizon’s difficulty in obtaining updated information for the general service and residential classes, but does not see any advantage in proceeding with partially updated information as the whole exercise is to determine what share each group will pay…Until more accurate data is available for all classes Horizon must continue to use the load profiles for the purposes of its forecast.
[10] It is clear from this that the Board’s concern with selectively updating load profiles based on partial load data is one of fairness. In seeking to review the Board’s December Decision, the Appellant argued that the Board had not articulated how its concerns about the fairness of selective upgrading were consistent with the province’s energy conservation policies. In the March Decision that dismissed the Appellant’s review request, the Board proceeded to address the Appellant’s concern.
[11] First, it dealt with the argument advanced by the Appellant in its notice requesting a review that the Board’s refusal to selectively upgrade acts as a disincentive to energy consumers to implement conservation measures. It pointed out that the City still had a strong incentive to implement its LED street lighting initiative as by doing so it would consume less electricity, which would in turn decrease its electricity bills. The fact that this reduction does not emanate from the actions of the Board itself does not detract from the reasonableness of the Board’s response to the City’s argument about having no incentive to implement conservation measures.
[12] Second, the Board explained that:
As all consumers of electricity are encouraged to implement conservation programs, all rate classes’ load profiles may change as a result of undertaking such programs. Selective updating would benefit the street lighting rating class but would do so at the expense of other rate classes. This in turn might negate some of the impact of those rate classes’ conservation efforts. The [Board] does not agree that provincial policies require the [Board] to selectively update load profiles of some rate classes to the detriment of others.
[13] For these reasons, the Board concluded that, far from being inconsistent with the provincial policies on conservation, those policies were reflected within the December Decision. Simply put, to reward the Appellant’s conservation efforts could penalize others who had also implemented conservation measures or were contemplating doing so. Aside from being unfair, this could have a negative impact on the province’s energy conservation program as a whole.
[14] The Appellant submits that this finding is unreasonable and speculative because the Board had no information before it as to any conservation efforts by any other class. This misses the point of the Board’s concern, which is focused on the implications of the exercise it has to perform, namely coming up with a method to share the costs of providing energy among the various classes of energy users. Horizon and the Appellant were asking the Board to do this based on partial information: updated load data relating to the street lighting class. Horizon might have, but did not provide the Board with updated load data relating to the other classes. If the Board had had that data it would have been in a position to assess whether the Appellant’s conservation efforts had reduced the consumption of energy in the street lighting class more or less than the conservation efforts of the members of the other classes. This information would allow the Board to perform its mandate in a fair and equitable manner. Without the information, the Board felt unable to meet its concern about fairness. There is nothing unreasonable about a concern for fairness.
[15] The Board made a specific finding that there was nothing in the province’s policies that required it to selectively update the load profile of one class as a result of the implementation of a conservation measure by that class. Having reviewed the policies and directives that the Appellant relies upon, we agree with this finding. In fact, in one of the Directives the Appellant relies upon, which was approved and ordered on March 26, 2014, it specifically states as follows:
- Nothing in this Directive shall be construed as directing the manner in which the Board determines, under the Ontario Energy Board Act, 1998, rates for Gas Distributors or for Distributors, including in relation to applications regarding regional or local electricity demand response initiatives or infrastructure deferral investments.
[16] For these reasons, we find that the Board’s decision was reasonable, both in terms of outcome and rationale. Therefore, the appeal is dismissed.
COSTS – LEITCH J.
[17] I have endorsed the Appeal Book and Compendium as follows: “The application is dismissed for oral reasons given. No costs ordered.
___________________________ SACHS J.
LEITCH J.
NORDHEIMER J.
Date of Reasons for Judgment: October 14, 2016
Date of Release: October 31, 2016
CITATION: Hamilton (City) v. The Ontario Energy Board, 2016 ONSC 6447
DIVISIONAL COURT FILE NO.: 146/16 DATE: 20161014
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEITCH, SACHS and NORDHEIMER JJ.
BETWEEN:
The City of Hamilton Appellant
– and –
The Ontario Energy Board Respondent
ORAL REASONS FOR JUDGMENT
SACHS J.
Date of Reasons for Judgment: October 14, 2016
Date of Release: October 31, 2016