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The Alberta Energy Regulator is suing a consultancy launched as a side project by its former chief executive, seeking to recover millions of dollars from an entity already under investigation by the provincial Auditor-General and its Public Interest Commissioner.

The industry-funded watchdog is seeking $2.67-million in the suit, alleging unpaid bills tied to a licensing agreement the AER struck with ICORE Energy Services NFP, according to a statement of claim filed in the Court of Queen’s Bench in Calgary.

The action is the latest fallout from the sudden resignation of former AER president and CEO Jim Ellis, a one-time military commander who held the job for five years before stepping down late last year amid criticism of the regulator’s oversight of oil-industry liabilities.

The AER announced his departure on Nov. 2, the same day Public Interest Commissioner Marianne Ryan informed Mr. Ellis that her office had initiated an investigation into allegations of wrongdoing related to the AER, according to a copy of the letter obtained by The Globe and Mail.

“The allegations relate to the use of public funds, public assets and AER human resources to establish and support the operation of the International Centre of Regulatory Excellence (ICORE), a non-profit company established by you,” Ms. Ryan said in the letter.

Auditor-General Doug Wylie is also probing the relationship between the AER and ICORE, which was launched by Mr. Ellis in February, 2017, with plans to advise other countries on regulation, starting with Mexico’s newly liberalized energy sector.

The consultancy struck a licensing agreement with the AER in April, 2017, under which it agreed to reimburse the regulator “for the use of the AER’s staff, resources, information, instructors or property related to the delivery of training course to third parties,” according to the claim.

The AER has said it severed the relationship last December for undisclosed reasons. According the claim, ICORE did not pay invoices for in-kind services totaling $2,671,241.08.

The allegations have not been tested in court and ICORE has not filed a statement of defence.

AER spokeswoman Samantha Peck declined to provide further details Friday. Zeeshan Syed, formerly listed as a principal contact on the nonprofit’s website, did not immediately reply to an e-mail. Mr. Ellis could not be reached.