Enbridge urges EUB to reject rate cuts8/31/2012
The New Brunswick government bungled changes to legislation governing Enbridge's monopoly over natural gas distribution in the province last winter and new rates connected to those changes should be rejected by the Energy and Utilities Board, the company's lawyers said Thursday.
"The [rates] cannot and should not be approved," said attorney David MacDougall in closing arguments to the EUB.
The province ordered Enbridge to apply for substantial rate cuts last winter after negotiations between the government and the company broke down.
Provincial Energy Minister Craig Leonard alleged the company was hampering economic development in the province by charging businesses the highest natural gas distribution rates in North America.
The rates had been approved by the EUB as "just and reasonable," so Leonard introduced legislation to force new ones and ordered Enbridge to apply for them. Enbridge did, but has been arguing for its application to be rejected.
Legislation 'has failed'
During a two-hour closing argument, Enbridge lawyers, led by MacDougall, said the EUB's establishing legislation requires it to award just and reasonable rates and that "100 years" of common law and legal precedent in Canada forbids the EUB from setting rates where Enbridge would lose money.
MacDougall acknowledged the province has the legislative power to make that happen, but said Leonard's changes were poorly drafted and lacked the proper legal language to override the EUB's legal responsibilities to Enbridge.
"In our respectful submission, the legislature has failed to expressly and unambiguously redefine the meaning of just and reasonable rates, even if that was their intent," said MacDougall.
Consequently, he said, the board could not legally obey the province's order and should leave Enbridge's rates untouched.
Earlier this week, Premier David Alward took credit for cutting Enbridge's rate cuts, despite the ongoing hearing.
The EUB is facing a major overhaul of its powers and membership by Alward's government later this fall.
Dave Charleson, general manager at Enbridge, said he expects the EUB will side with the company if it sees merit in its argument.
"The Energy and Utilities Board is established to be an independent tribunal so our hope would be ... that they would act as an independent body," he said.