Yukon Energy Corp. et al. v. Utilities Board (Yukon Terr.), (1996) 74 B.C.A.C. 58 (YukCA)

• Judge: Macfarlane, Goldie and Newbury, JJ.A.
• Court: Court of Appeal (Yukon Territory)
• Case Date: April 09, 1996
• Jurisdiction: Yukon
• Citations: (1996), 74 B.C.A.C. 58 (YukCA)

Yukon Energy v. Utilities Bd. (1996), 74 B.C.A.C. 58 (YukCA);

    121 W.A.C. 58

MLB headnote and full text

Yukon Energy Corporation and The Yukon Electrical Company Limited (appellants) v. Yukon Utilities Board (respondent)

(YU00269)

Indexed As: Yukon Energy Corp. et al. v. Utilities Board (Yukon Terr.)

Yukon Court of Appeal

Macfarlane, Goldie and Newbury, JJ.A.

April 9, 1996.

Summary:

Yukon Energy Corporation and Yukon Electrical Company (the Utilities) applied for approval of changes in rates charged to their customers for electric energy. In deciding the application, the Yukon Utilities Board denied recovery of certain costs in the rates and the benefit from the disposition of lands no longer used or useful in the ser­vices pro­vided to their customers. The Util­ities appealed.

The Yukon Court of Appeal allowed the appeal in part.

Public Utilities - Topic 3005

Rates - General - Right to reasonable and fair compensation - The Yukon Court of Appeal stated that the Public Utilities Act could not be interpreted as purporting to deprive a utility of its common law right to reasonable and fair compensation for providing a service the Act requires it to provide - See paragraphs 31 to 35.

Public Utilities - Topic 4404

Public utility commissions - General - Jurisdiction - [See fourth, fifth and sixth Public Utilities - Topic 4665 ].

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - Yukon Energy Corporation and Yukon Electrical Company (the Utilities) applied under the Public Utilities Act for approval of changes in rates charged to their cus­tomers for electric energy - The Yukon Utilities Board ordered expenditures of $779,000 to be recovered in the rate base over a five year period - The Board denied a return on the unamortized bal­ance, stating that the expenses were not prudently incurred - Section 5(2) of the Rate Policy Directive required the Board to permit recovery of expenditures reason­ably incurred for purposes set out in s. 5(1) - Section 5(1) required the Board to encourage the Utilities to promote econ­omy and efficiency in the generation, transmission and use of electricity - The Yukon Court of Appeal allowed the Utilities' appeal, stating that there was no suggestion that the expenditures were unreasonable in light of the desired objec­tive - See paragraphs 55 to 63 and 106.

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - Yukon Energy Corporation and Yukon Electrical Company (the Utilities) applied under the Public Utilities Act for approval of changes in rates charged to their cus­tomers for electric energy - In deciding the application, the Yukon Utilities Board reduced certain of the Utilities' forecasted expenses - The Board's decision would not affect the recovery of actually incurred expenditures - There was no indication that the exclusion would imperil the Utilities' ability to provide service to those entitled or maintain its property in a ser­viceable state - The Utilities appealed - The Yukon Court of Appeal held that the Board's decision was a question of fact and refused to intervene - See paragraphs 64 to 67 and 106.

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - Yukon Energy Corporation and Yukon Electrical Company applied under the Public Utilities Act for approval of changes in rates charged to their customers for electric energy - In deciding the appli­cation, the Yukon Utilities Board directed that Yukon Energy be allowed to recover in its rates an interest expense of only 8.13% on an unsecured debt evidenced by two promissory notes which were payable on demand with interest payable at 9.79% - The Board justified its decision on the basis of an agreement between Yukon Energy and the lender to renegotiate the interest rate every two years - The Yukon Court of Appeal allowed Yukon Energy's appeal, concluding that the Board erred in law by treating the debt as short term and not allowing Yukon Energy to recover the 9.79% - See paragraphs 68 to 75 and 106.

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - The Yukon Utilities Board decided an application under the Public Utilities Act by Yukon Electrical Company and another for approval of changes in rates charged for electric energy - The Board directed that gains realized by Yukon Electrical on the sale of land be accounted for in a manner which reduced the rate base and hence the rev­enue permitted to be earned - Yukon Electrical appealed - The Board asserted that the issue was one of fact and outside the court's jurisdiction - The Yukon Court of Appeal concluded that the meaning to be given to "revenue" was one of law and that Yukon Electrical was entitled to the gain on the sale of lands no longer used or useful in providing service and disposed of to third parties in arms length transactions - See paragraphs 76 to 98 and 106.

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - A predecessor to Yukon Electrical Company obtained land for $1 - Yukon Electrical became the owner of the land which included a num­ber of parcels never included in the rate base for electrical energy - In 1992, Yukon Electrical trans­ferred the non-rate base property to a related company for $1 - On an applica­tion under the Public Utilities Act by Yukon Electrical et al. for approval of changes in the base rate, the Yukon Util­ities Board treated the transactions as resulting in a capital gain of $300,000 to Yukon Electrical - On appeal, the Yukon Court of Appeal concluded that the Board exceeded its jurisdiction in making the order - The evidence did not support the decision to treat the transfer of non-rate base property as giving rise to a realized gain - See paragraphs 99 to 106.

Public Utilities - Topic 4665

Public utility commissions - Regulation - Rates - Considerations in fixing rates - The Yukon Utilities Board decided an application by Yukon Energy Corporation and Yukon Electrical Company [the Util­ities] for approval of changes in rates charged to customers for electric energy - The Utilities appealed, asserting that the Board erred in law or acted in excess of jurisdiction by misinterpreting s. 4 of the Rate Policy Directive - Section 4 of the Directive provided that "[e]xcept to the extent otherwise stated by this Directive or the Act, the Board must review and approve rates in accordance with normal principles applicable in Canada for similar utilities." - The Yukon Court of Appeal reviewed the Board's observations on the Directive and its jurisdiction and found no reversible error - See paragraphs 23 to 36 and 106.

Public Utilities - Topic 4743

Public utility commissions - Judicial review - Appeals - The Yukon Court of Appeal discussed the appropriate standard of review for an appellate court when reviewing a decision of the Yukon Utilities Board - The court concluded that the Board had to be correct in its determina­tion of its jurisdic­tion - The court stated that the Board's conclusion on the applica­tion of the Public Utilities Act should be accorded deference if supported by evi­dence and not contrary to general law or the Act - See paragraphs 37 to 48.

Public Utilities - Topic 4747

Public utility commissions - Judicial review - Curial deference - [See Public Utilities - Topic 4743 ].

Words and Phrases

Reasonable - The Yukon Court of Appeal discussed the meaning of "reasonable" as found in s. 5(2) of the Public Utilities Act Regulations (Yuk.), Rate Policy Directive - See paragraphs 55 to 63.

Cases Noticed:

British Columbia Electric Railway Co. v. Utilities Commission (B.C.), [1960] S.C.R. 837, consd. [para. 32].

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1; [1994] 7 W.W.R. 1; 92 B.C.L.R.(2d) 145; 14 B.C.R.(2d) 217; 22 Admin. L.R.(2d) 1; 114 D.L.R.(4th) 385, consd. [para. 37].

Superintendent of Brokers v. Pezim - see Pezim v. British Columbia Securities Commission et al.

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140, refd to. [para. 39].

Syndicat national des employés de la Commission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298 (FTQ), [1988] 2 S.C.R. 1048; 95 N.R. 161; 24 Q.A.C. 244, refd to. [para. 40].

Union des employés de service, local 298 v. Bibeault - see Syndicat national des employés de la Commission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298 (FTQ).

Bibeault - see Syndicat national des employés de la Commission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298 (FTQ).

U.E.S., Local 298 v. Bibeault - see Union des employés de service.

TransAlta Utilities Corp. v. Public Utilities Board (Alta.) (1986), 68 A.R. 171; 43 Alta. L.R.(2d) 171 (C.A.), consd. [para. 81].

Statutes Noticed:

Public Utilities Act, R.S.Y. 1986, c. 143, sect. 23(1)(b) [para. 57]; sect. 32(1), sect. 32(3) [para. 10]; sect. 32(4) [para. 57]; sect. 52(a) [para. 44]; sect. 69 [paras. 21, 45]; sect. 72 [para. 21].

Public Utilities Act Regulations (Yuk.), Rate Policy Directive, sect. 4 [paras. 13, 23]; sect. 5(1) [paras. 13, 49]; sect. 5(2) [paras. 13, 49, 59].

Rate Policy Directive - see Public Utilities Act Regulations (Yuk.).

Authors and Works Noticed:

Shorter Oxford Dictionary [para. 60].

Counsel:

P.J. Landry, for the appellant, Yukon Energy Corp.;

Donald O. Sabey, Q.C., for the appellant, Yukon Electrical Co.;

B.L. Willis, Q.C., for the respondent, Yukon Utilities Board;

P.G. Sully, Q.C., for the intervenor, City of Whitehorse.

This appeal was heard at Vancouver, British Columbia, on January 11 and 12, 1996, before Macfarlane, Goldie and Newbury, JJ.A., of the Yukon Court of Appeal.

On April 9, 1996, Goldie, J.A., delivered the following judgment for the Court of Appeal.