Update on the Alberta Energy Regulator’s Best-in-Class Initiative

Update on the Alberta Energy Regulator’s Best-in-Class Initiative

Earlier this month, we had the opportunity to participate in the Alberta Energy Regulator (AER)’s Best-in-Class Initiative. This initiative is being conducted by the University of Pennsylvania through its Penn Program on Regulation to develop the tools and framework necessary for the AER to become a best-in-class regulator. It will generate a framework for identifying and achieving important organizational, legal, policy, and deliberative responsibilities facing the AER (and other regulators) and enable the AER to measure and track its performance against best-in-class attributes.

Over the course of the three day workshop and dialogue, several characteristics repeatedly emerged as being essential to a best-in-class regulator:

  • A best-in-class regulator must operate in a transparent fashion. This includes providing easy access to information (and information being presented in an understandable format) and clarity around decision-making.
  • A best-in-class regulator must effectively engage with stakeholders and the public. This requires active engagement, understanding of different perspectives and open communication.
  • A best-in-class regulator must be fair and credible. Integral to this characteristic is a regulator that is independent from government.

In addition to these characteristics, it was repeatedly expressed that a best-in-class regulator needs to operate within a best-in-class regulatory system. The regulatory system must provide clear environmental objectives and policy direction for the regulator and industry. In the event that environmental objectives or policy are lacking, a best-in-class regulator will work to have these established. In our view, it is essential that there be a forum to engage stakeholders and the public in setting environmental objectives and policy.  Recognizing that, as regulator for Alberta’s energy industry, the AER plays a central role in the protection of our natural resources and environment, it is incredibly important that we have a transparent and accountable regulator.

We are encouraged that the AER is seeking to become a best-in-class regulator and look forward to the outcome of this initiative. If you are interested in this initiative, more information can be found at The Penn Program on Regulation website. As well, submissions can be made by the general public at comments@bestinclassregulator.org.

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4 Comments
  • Brenda Heelan Powell
    Posted at 17:40h, 28 April Reply

    Thanks for your comments Carl and Jack.

    You both raise interesting points.

    As mentioned in our post, if you wish to provide comments directly into this process, you can do so at https://www.law.upenn.edu/institutes/ppr/bestinclassregulator/ or via email at comments@bestinclassregulator.org. Change and improvement can only occur if the AER hears from all interested Albertans.

  • Jason Unger
    Posted at 15:32h, 28 April Reply

    Good points on both comments regarding the AER independence. There are opportunities to ensure an agency is more arms length but at the same time it makes sense to ensure polluters pay for the system (as well as the pollution in line with the polluter pays principle).

    Part of the difficulty is that discretion around energy decisions are largely unhindered and thus may be open to apparent biases (whether institutional, political, or driven by some level of agency capture) that appear to favour development.This could be overcome somewhat (in my view) if they actually defined what is “environmentally responsible development” of the resource and what isn’t. Without a level of certainty or quantitative measures around environmental performance this mandate is largely meaningless. By clearly defining what will be considered “environmentally responsible” the AER may become more credible as well. (We await a time when a regulator feels comfortable in Alberta to deny an application purely due to the possible or likely environmental harms.)

  • Jack Elliott, retired Alberta citizen.
    Posted at 21:22h, 27 April Reply

    The AER is doomed to failure at becoming a “best-in-class” regulator, given the three essential characteristics outlined, unless it becomes an agency independent of both government and energy companies. In that context it would also need sufficient resources to enter the courts as needed to “regulate”. Otherwise, this is simply an exercise in self-gratification by the AER.

  • Carl Hunt
    Posted at 14:11h, 27 April Reply

    I agree that a ‘best in class regulator’ must be independent of government but should be responsible to the Govt (public). Alberta AER will never be best in class unless it is independent of industry and not run by the petroleum industry. A regulator should regulate, monitor and enforce by prosecuting violations in public court. We also need an independent regulator of environmental laws to protect renewable resources.

    This review is another charade like the Royalty Review 2007,”Our Fair Share’ , a public review that was written by a government selected group of business people. The petroleum industry still convinced the government (in private meetings) to ignore the recommendations.

    Why should this review be any different than dozens of past public reviews that made recommendations that didn’t agree with government ideology or industry priorities?

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