Prudence, Stranded Assets, and the Regulation of Utilities: A Review of Alberta Utility Regulatory Principles in a Post-Stores Block Era

  • Lou Cusano Partner at Torys LLP
  • David Wood Senior Counsel at Torys LLP
  • Evan Dickinson Senior Associate at Torys LLP
  • Gino Bruni Associate at Torys LLP


Stores Block, a 2006 Supreme Court of Canada case, established that utilities are the sole owners of utility assets, thereby granting them the right to gain on the disposition of such assets. The case was game-changing, spawning a string of Alberta Court of Appeal, Supreme Court of Canada, and regulatory body decisions. This article traces the progression of these decisions and examines their implications for property ownership principles, including utility asset dispositions, utility rate bases, the prudent investment test, and stranded assets. The authors ultimately argue that these interpretations of Stores Block have led to “deleterious effects” for regulated utilities in Alberta, and discuss resulting attempts at legislative intervention by the Government of Alberta.