AltaLink was hired to map out proposed transmission lines between Edmonton and Calgary.
Area landowners represented by the Lavesta Area Group Inc. opposed the power line and argued there was bias in hearings held by the Alberta Utilities Commission on the matter of payment to AltaLink.
The project was axed following a spy scandal which involved the utilities regulator, then known as the Energy and Utilities Board.
According to the appeal court, board officials hired a private investigator to listen in on a telephone conference call where participants discussed their concerns.
Lavesta chairman Joe Anglin, who is a candidate for the Wildrose in the provincial riding of Rimbey-Rocky Mountain House-Sundre, says he's disappointed with the ruling.
"One of the members that served on one of those boards back in 2007 ... served as a chairman of the board that awarded AltaLink $35 million," said Anglin.
"We were never told that AltaLink had put in a request for this amount of money. We didn't think they deserved getting paid that kind of money and they never showed what they did for it."
Anglin suggested the incident demonstrates how corrupt government-run boards can be.
"The public needs to walk up and really ask themselves about these issues around these surface-rights boards, the utility boards, the energy conservation resource board. All these boards are nothing but rubber stamps."
The appeal court said the utilities commission was being reasonable when it concluded AltaLink acted in good faith and should not be financially penalized by the circumstances that occurred, which were not of their doing.
It also said there was no reason to conclude that the parties to the tariff proceedings did not get a fair hearing, even though one man involved had also served on previous boards involved in the matter.