Fourth

Session, 45th General Assembly

Elizabeth II, 2007

BILL 28

AN ACT TO ESTABLISH AN

ENERGY

CORPORATION

FOR THE PROVINCE

Received and Read the First Time ...................................................................................................

Second Reading .................................................................................................................................

Committee ............................................................................................................................................

Third Reading .....................................................................................................................................

Royal Assent ......................................................................................................................................

HONOURABLE KATHY DUNDERDALE

Minister of Natural Resources

Ordered

to be printed by the Honourable House of Assembly

EXPLANATORY NOTE

The purpose of this Bill is as set

out in the

Long Title.

A BILL

AN ACT TO ESTABLISH AN ENERGY CORPORATION

FOR THE PROVINCE

Analysis

Short title

Definitions

Corporation established

Application of the Corporations Act

Objects of the corporation

Board of directors

Chairperson and CEO

Minutes

Service contract

By-laws

Affixing seal

Appointment of staff

Subsidiaries of corporation

General powers

Acts applicable

Application of Acts

Application of Acts

Borrowing power

Guarantee of loans

Manner and form of guarantee

Guarantee of payment

Guarantee of repayment

Short-term loans

Agreements

Performance guarantee

Loans by government

Performance under guarantee

Total amount of loan

Financial year

Capital and operating expenses

Audit and financial statement

Fund established

Financial provisions to have full effect

Actions

Offences

Transitional

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

Short title

1. This

Act may be cited as the Energy Corporation

Act.

Definitions

2. In

this Act

(a) "board" means the board of directors

of the corporation;

(b) "chairperson" means the chairperson

of the board;

(c) "corporation" means the energy corporation

established by this Act;

(d) "director" means a director of the

board;

(e) "land" means real property of every

kind, and includes tenements, hereditaments, and appurtenances, leaseholds, and

an estate, term, easement, right or interest in, to, over, under or affecting

land, including rights-of-way, and waters, water rights, water powers and water

privileges;

(f) "minister" means the minister

appointed under the Executive Council Act

to administer this Act;

(g) "person" includes a natural person, a

corporation, another entity recognized by law, and the heirs, executors, administrators

or other legal representatives of a person;

(h) "power" includes electrical power,

however generated and electrical energy; and

(i) "works" means all land, property,

buildings, plants, machinery, installations, materials, dams, canals, devices,

fittings, apparatus, appliances, and equipment made, established or acquired or

utilized, or useful for the exercise of the powers of the corporation and the

attainment of its objects.

Corporation established

(1) There

is established an energy corporation for the province.

(2) The name of the corporation shall be

determined by the Lieutenant-Governor in Council.

(3) The corporation is considered to have issued

and outstanding shares which are vested in the Crown.

(4) The head office of the corporation shall be at

St. John's .

(5) The corporation is an agent of the Crown.

(6) Notwithstanding that the corporation is an

agent of the Crown, the corporation may, for the purpose of this Act and

subject to conditions it considers necessary,

(

a) acquire from the

Crown in right of Canada , of the province or of the other provinces of Canada or

from an agency of the Crown in right of Canada or

of this or another of the provinces of Canada ,

real and personal property and rights of all kinds;

(

b) enter into contracts with the Crown in right

of Canada , the province or another province of Canada , or an agency of the Crown in right of Canada or

of this or another province;

(

c) enter into a partnership, joint venture,

equity arrangement or other arrangement with the Crown, an agent of the Crown

or another person; and

(

d) appoint agents to act on its behalf.

(7) Property of the corporation is the property of

the Crown, but title to it is vested in the name of the corporation.

(8) A director or a person employed by the

corporation does not become, by reason of that office or employment only, an

officer or employee of the Crown.

Application of

the Corporations Act

(1) The

Corporations Act , except for

section

27, paragraphs 31(

a) to (e), sections 32, 76, 81, 167, 169, 172, 173, 177 and

178, subsections 184(3) and (4),

section 188, subsections 189(1) and (2), paragraphs

189(3)(a), (d), (

h) and (j), sections 200, 201, 203 to 209, subsections 245(1),

(3) and (4), sections 273 and 275, subsections 276(1), (3), (4) and (5) and

section 277, does not apply to the corporation.

(2) A requirement in a

section referred to in

subsection (1) to register or to provide information to the registrar does not

apply to the corporation.

(3) Where there is a conflict between a provision

referred to in subsection (1) and this Act, this Act prevails.

(4) The provisions of this Act constitute the

articles of the corporation.

Objects of the corporation

(1) The

objects of the corporation are to invest in, engage in, and carry out

activities in all areas of the energy sector in the province and elsewhere,

including,

(

a) the development, generation, production,

transmission, distribution, delivery, supply, sale, export, purchase and use of

power from wind, water, steam, gas, coal, oil, hydrogen or other products used

or useful in the production of power;

(

b) the exploration for,

development, production, refining, marketing and transportation of hydrocarbons

and products from hydrocarbons;

(

c) the manufacture, production, distribution and

sale of energy related products and services; and

(

d) research and development.

(2) Notwithstanding subsection (1), the

corporation may engage in those other activities that the Lieutenant-Governor

in Council may approve.

Board of

directors

(1) For

the exercise and discharge of the powers and duties of the corporation, there

shall be a board of directors comprised of not less than 5 and not more than 14

persons.

(2) The directors shall be appointed by the Lieutenant-Governor

in Council, shall hold office during pleasure only and are eligible for

reappointment.

(3) Except where otherwise prescribed under this

Act, the corporation may exercise its powers by a resolution of the board.

(4) The directors shall be paid the salary or

other remuneration that the Lieutenant-Governor in Council may determine, and

the salary or remuneration together with all reimbursable expenses shall be

paid by the corporation out of its funds.

(5) Where a vacancy occurs on the board because of

the death, illness, resignation, removal of a member, or for another reason,

the Lieutenant-Governor in Council may appoint a person to fill the vacancy.

(6) Exercise of the powers of the corporation is

not impaired because of a vacancy on the board.

(7) Until the board makes other provision under

section 10 , a majority of the directors who

then hold office constitutes a quorum of the board.

(8) Notwithstanding that it is afterward discovered

that there was some defect in the appointment or qualification of a person purporting

to be a director, all acts done by the corporation and the board shall be as

valid as if that defect had not existed.

Chairperson and

CEO

(1) There

shall be a chairperson of the board to be appointed by the Lieutenant-Governor

in Council from among the directors.

(2) The chairperson holds office for the period

in Council or in an agreement made under

section 9 ,

(3) There shall be a chief executive officer of

the corporation, to be appointed by the Lieutenant-Governor in Council, who

shall, subject to the terms of appointment that may be established by the Lieutenant-Governor

in Council, or in an agreement made under

section 9

and, subject to the directions of the board, be charged with the general direction,

supervision and control of the business of the board and the corporation.

(4) The same person may not hold the offices of

chairperson and chief executive officer simultaneously.

(5) During the incapacity or absence of the

chairperson, one of the other directors, other than the chief executive

officer, where the chief executive officer is a director, elected by the board

for the purpose shall act as chairperson of the board.

(6) During the absence or incapacity of the chief

executive officer, the board may appoint an acting chief executive officer who

shall perform the duties of the chief executive officer until his or her return

or resumption of duties or until a new chief executive officer is appointed.

Minutes

8. The

chairperson shall ensure that regular minutes are kept of the meetings of the

board.

Service contract

(1) With

the approval of the Lieutenant-Governor in Council the corporation may enter

into an agreement with a person that provides for his or her appointment to the

office of chairperson or chief executive officer of the corporation.

(2) An agreement under this

section may prescribe

remuneration, including the salary, pension and other rights and benefits that

appointment may be terminated and by whom before the expiration of the term of

the appointment.

(3) A person with whom an agreement is made under

this

section in relation to an office

(

a) holds that office in accordance with the agreement

and shall vacate it or them accordingly; and

(

b) does not, by reason only of the appointment to

that office, become an employee of the province.

By-laws

10. The

board may make by-laws

(

a) respecting the calling of meetings of the

board;

(

b) establishing a quorum of the board;

(

c) respecting the conduct of business at meetings

of the board and the establishment of committees of the board and the

delegation of duties to those committees;

(

d) respecting the duties and conduct of the

directors and of the officers and employees of the corporation;

(

e) respecting the common seal of the corporation

and the use of it;

(

f) respecting the execution of a contract or

instrument on behalf of the corporation;

(

g) respecting the lithographing or mechanical

reproduction of signatures on bonds, debentures, securities, or other evidence

of indebtedness of the corporation or upon coupons and the mechanical

reproduction of the common seal of the corporation on the bonds, debentures,

securities, other evidence of indebtedness or coupons;

(

h) respecting the management and use of any or

all of its property by employees, invitees, licensees or permittees of the

corporation and by another person; and

(

i) generally, for the conduct and management of

the affairs of the corporation.

Affixing seal

11. Until

the board makes other provision under

section 10 ,

the affixing of the common seal of the corporation shall be witnessed by at

least 2 directors.

Appointment of

staff

(1) The

board may appoint those officers, managers, other staff and employees and

retain consultants, advisors and other professional persons that it considers

necessary and may fix their remuneration and terms of service.

(2) A person who is appointed under this

section

does not, by reason only of the appointment, become an employee of the

province.

Subsidiaries of

corporation

(1) A

company is considered to be a subsidiary of the corporation if

(

a) it is controlled by

(

i) the corporation,

(ii) the corporation and one or more companies,

each of which is controlled by the corporation, or

(iii) one or more companies, each of which is

controlled by the corporation; or

(

b) it is a subsidiary of a company which is a

subsidiary of the corporation.

(2) For the purposes of this section, a company shall

be considered to be controlled by the corporation or one or more companies if

(

a) shares of the first-mentioned company carrying

more than 50% of the votes for the election of directors are held, otherwise

than by way of security only, for the benefit of the corporation or other

companies; and

(

b) the votes carried by the shares are

sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned

company.

General powers

(1) The

corporation may

(

a) on behalf of the Crown enter into contracts or

other agreements and acquire and dispose of and otherwise deal with real and

personal property and all rights of all kinds in the name of the corporation;

(

b) acquire, lease, establish, construct, maintain

and operate works in a part of the province or elsewhere in connection with the

attainment of its objectives as set out in

section 5;

(

c) purchase power from a person and transmit,

make available for use, distribute, deliver, sell, supply and generally use the

power for the purposes of the corporation;

(

d) contract with a person for the purchase of

petroleum products, notwithstanding another Act;

(

e) acquire by purchase, lease or otherwise, property,

both real and personal, and water privileges, water powers, rights, easements,

privileges, proprietary rights, interests, and works of every description which

the corporation considers necessary, convenient or advisable to acquire for or

incidental to the exercise of the powers and duties of the corporation and the

attainment of its objects;

(

f) sell or otherwise dispose of its property,

real or personal, of every nature and kind or an interest in it which is found

by the corporation to be unnecessary for the purposes of the corporation, and

grant an estate, term, easement, right or interest in, over or respecting the

property;

(

g) contract with a person for

(

i) the supply, transmission and distribution of

power to that person, and

(ii) the construction, maintenance and operation of

works for or incidental to the generation, transmission and distribution of

power on behalf of that person, to be done by the corporation or a person

designated by the corporation to do the things referred to in this paragraph,

for the consideration that the corporation

may prescribe;

(

h) deposit money or securities with a bank,

trustee, trust company, or other depositary in Canada or

outside of Canada ;

(

i) lend money to or invest in a subsidiary of the

corporation;

(

j) guarantee the repayment by a subsidiary of the

corporation of money advanced to that subsidiary by a lender, together with the

payment of interest on it and of all charges incurred in connection with it;

(

k) guarantee the performance by a subsidiary of

the corporation of an obligation of that subsidiary contracted by it with a person

to perform, fulfil or observe a covenant, obligation or provision of an

agreement, deed, bond, promissory note or other document or instrument;

(

l) exercise and enjoy all of the privileges and

immunities conferred on it by this Act and do all acts necessary or incidental

to the attainment of the objects of the corporation referred to in

section 5 ;

(

m) carry on business incidental and subsidiary to

the carrying out of the objects referred to in

section 5 and necessary to enable the company profitably to

carry out those objects; and

(

n) generally, do all things which the corporation

considers necessary, convenient or advisable for or incidental to the exercise

of the powers and the discharge of the obligations of the corporation.

(2) The powers of the corporation include

(

a) the power to acquire, lease, construct,

maintain, operate and use in the province and elsewhere land, works, plants,

buildings, structures, machinery, equipment, devices, pole lines, conduits,

pipe lines, tunnels and other property used or useful for carrying out the

objects of the corporation;

(

b) the powers conferred on the corporation under

this Act; and

(

c) all other powers that are incidental or

conducive to the attainment of the objects of the corporation.

(3) Except with the prior approval of the Lieutenant-Governor

in Council, the corporation shall not organize or maintain a subsidiary of the

corporation or purchase, sell, otherwise dispose of or deal in shares of a

subsidiary of the corporation or of another company, and where the approval is

given, the corporation may do the things referred to in this subsection only

where it is expressly mentioned in and to the extent provided by the approval.

Acts applicable

(1) The Labour Relations Act applies to the

corporation.

(2) All collective bargaining agreements and other

agreements of the corporation with a trade union, council of trade unions,

employee bargaining agent or affiliated bargaining agent shall continue in

force as if made under the Labour

Relations Act.

(3) A trade union, council of trade unions,

employee bargaining agent or affiliated bargaining agent that is party to a

collective bargaining agreement with the corporation under subsection (2) shall

be considered to be certified for the purpose of the Labour Relations Act.

(4) Section 11.1 of the Public Sector Restraint Act, 1992 applies to the corporation and

its employees.

Application of Acts

16. Notwithstanding

that the corporation is an agent of the Crown

(

a) the

Mechanics' Lien Act applies in respect of the corporation and all property

to which title is vested in the name of the corporation; and

(

b) the

Workplace Health, Safety and Compensation Act applies in respect of the corporation

and its employees.

Application of

Acts

(1) The corporation is subject to the Water Resources Act .

(2) The corporation is not a utility as defined by

the Public Utilities Act and that Act

does not apply to the corporation.

Borrowing power

(1) Subject

to the prior approval of the Lieutenant-Governor in Council, the corporation

may

(

a) borrow money for purposes related to the

attainment of its objects as set out in

section 5 ;

and

(

b) to secure the repayment of money borrowed

(

i) issue bonds, debentures, or other securities

of the corporation,

(ii) execute and deliver mortgages, assignments,

conveyances, charges or other encumbrances of and over property of every nature

and kind, both present and future, title to which is vested in the corporation,

and

(iii) enter into, execute and deliver a trust deed,

trust indenture or an agreement with a lender, a trustee acting for the holders

of bonds and debentures or other person,

and the money may be borrowed at the rate

documents may be issued or executed and delivered in the form, that the Lieutenant-Governor

in Council, or, where the authority to do so is delegated to the Minister of

Finance by the Lieutenant-Governor in Council, the Minister of Finance,

approves.

(2) The securities of the corporation may be made

payable in a currency approved by the Lieutenant-Governor in Council and expressed

in the security.

Guarantee of

loans

19. Subject

to the prior approval of the Lieutenant-Governor in Council, the Minister of

Finance acting for and on behalf of the Crown may unconditionally guarantee

both as to principal and interest, including interest on overdue interest,

premium and sinking fund payments, loans authorized under

section 18 to be raised by the corporation, and the loan may

be raised by bonds, debentures, or other securities to be issued by the

corporation

(

a) in a principal amount not exceeding the

amount;

(

b) at a rate of interest;

(

d) with provision for redemption at the time,

that may be approved by the Lieutenant-Governor

in Council, or, where the authority to do so is delegated to the Minister of

Finance by the Lieutenant-Governor in Council, the Minister of Finance, and the

bonds, debentures or other securities may be issued or sold in the numbers and

amounts, at the times, at the prices, and upon the terms that the Lieutenant-Governor

in Council or that minister may approve.

Manner and form

of guarantee

20. Notwithstanding

the Financial Administration Act or

another Act or law, when a guarantee is given under

section 19 of this Act, it shall be given in the manner and

form that the Lieutenant-Governor in Council approves, and the form of

guarantee shall be signed on behalf of the province by the Minister of Finance,

his or her deputy minister or another minister whom the Lieutenant-Governor in

Council may designate, and that signature may be engraved, lithographed or

otherwise mechanically reproduced on the bonds, debentures or other securities

in respect of which the guarantee is given.

Guarantee of

payment

21. Where

the payment of interest or a premium or a sinking fund payment has been

guaranteed under this Act, the Crown may incur liability in excess of the

principal amount of the loan to be raised by way of bonds, debentures, or other

securities, to the extent of the guarantee of the interest, premium and sinking

fund payment.

Guarantee of repayment

22. The

power conferred by

section 19 to guarantee the

repayment of bonds, debentures or other securities includes the power to

guarantee the repayment of part of the bonds, debentures or other securities.

Short-term loans

(1) The

corporation may, for its purposes, raise short-term loans

(

a) in the manner and form;

(

b) in the amounts;

(

c) in the currencies;

(

d) for the period, not exceeding 2 years;

(

e) at the rates of interest, including interest

on overdue interest; and

(

f) on the conditions, including conditions

relating to discounts, premiums, charges and commissions,

that the corporation may determine.

(2) The total of the short-term loans raised under

subsection (1) and outstanding at any time shall not exceed a limit to be fixed

by the Lieutenant-Governor in Council, and it is the duty of the Minister of

Finance to see that this total is not exceeded.

(3) The Minister of Finance acting on behalf of

the Crown may unconditionally guarantee the repayment of a sum raised under

subsection (1), the payment of interest, including interest on overdue interest

and the payment of a premium.

(4) The total of the guarantees made under subsection

(3) and outstanding at any time shall not exceed a limit to be fixed by the Lieutenant-Governor

in Council, and it is the duty of the Minister of Finance to see that this

total is not exceeded.

(5) A guarantee given under this

section shall be

in the form that the Minister of Finance approves, and the form of guarantee

shall be signed on behalf of the province by that minister whose signature may

be engraved, lithographed or otherwise mechanically reproduced on the bonds,

debentures or other securities in respect of which the guarantee is given.

Agreements

24. The

Minister of Finance, acting on behalf of the Crown, may enter into, execute and

deliver a trust deed, trust indenture or an agreement with the corporation, a

lender, a trustee acting for the holders of bonds, debentures or other

securities of the corporation or other person or company setting out the terms

and conditions of a guarantee of a loan to be made under this Act.

Performance guarantee

25. Subject

to the prior approval of the Lieutenant-Governor in Council, the Minister of

Finance acting on behalf of the Crown may guarantee the performance by the

corporation of an obligation of the corporation contracted by it with a person

(

a) to pay money or an instalment; or

(

b) to perform, fulfil or observe a covenant,

obligation or provision of an agreement, deed, bond, promissory note or other

document or instrument.

Loans by government

26. Notwithstanding

the Financial Administration Act or

another Act or law, the Lieutenant-Governor in Council may advance to the

corporation a sum to enable the corporation to reach its objects or to carry on

its business, and the advance may be made in the amount, for the term, at the

in Council.

Performance under

guarantee

27. A

payment or advance that the Crown may approve in the exercise of a power

conferred by this Act or be required to make under this Act shall be paid by

the Minister of Finance out of the Consolidated Revenue Fund or, where the

payment is to be made in performance of a guarantee, it may be paid out of

funds provided in the manner prescribed in

section 55 of the Financial Administration Act.

Total amount of

loan

(1) The

total of money to be raised by the corporation by loans shall not exceed

$600,000,000 in Canadian currency or its equivalent in the currency of another

country.

(2) The total of all loans to the corporation to

be guaranteed by or on behalf of the Crown shall not exceed $600,000,000 in

Canadian currency or its equivalent in the currency of another country.

(3) In calculating the maximum amount of money

raised by way of loans by the corporation and of guarantees given under this

Act, no account shall be taken of amounts raised by way of loan that have been

repaid or of a part of the proceeds of a loan to be raised for, or that has

been spent on, the repayment, refinancing, refunding, redemption, retirement or

purchase of the whole or a part of loans or securities of the corporation.

Financial year

29. The

financial year of the corporation shall be the calendar year.

Capital and operating

expenses

30. The

corporation shall, not later than November 30 in each year, provide to the

minister a budget containing the estimated capital and operating expenses of

the corporation for its next succeeding financial year.

Audit and financial

statement

(1) The

board shall annually appoint an auditor who shall annually audit the financial

statement of the corporation.

(2) The board shall, not later than April 30 in

each year, prepare and submit to the minister a report containing

(

a) an audited consolidated financial statement

setting out the assets and liabilities of the corporation as at the end of the

immediately preceding financial year and the results of its operations for that

financial year; and

(

b) a report by the board giving an account of the

activities of the corporation during the immediately preceding financial year

and setting out other matters that may appear to it to be of public interest in

relation to the affairs or activities of the corporation,

and the statement and report shall be laid before the Legislature

within 15 days after they are submitted to the minister, if the Legislature is

then in session, or, if it is not in session, then within 15 days after the

beginning of the next session.

(3) The financial statement referred to in

subsection (2) shall be signed by 2 directors and shall have attached to it the

auditor's report referred to in subsection (5).

(4) The remuneration of the auditors referred to

in subsection (1) shall be fixed annually by the board and shall be paid by the

corporation out of its funds.

(5) The report of the auditors shall be sent to

the minister with each annual report of the corporation referred to in

subsection (2), and it shall state whether the financial statements present

fairly the financial position of the corporation and the results of its

operations for the period under review and whether the financial statements

were prepared in accordance with generally accepted accounting principles

applied on a basis consistent with that of the preceding period.

(6) The Lieutenant-Governor in Council may, by

order, designate or appoint other auditors for carrying out the specific audit

of the corporation's accounts and business that he or she may specify in the order,

and the auditor general may conduct the additional examination and

investigation of the records and operations of the corporation that he or she

considers necessary.

(7) For the purposes of an audit, examination or

investigation conducted under subsection (6), the person designated or

appointed by the Lieutenant-Governor in Council, or the auditor general, may

request and shall be supplied by the board with all books, vouchers, records,

schedules, working papers and other documentation which he or she considers

necessary.

Fund established

(1) The

corporation shall establish a fund in the name of the corporation to be

determined under subsection 3(2) which shall be separate and distinct from the

Consolidated Revenue Fund.

(2) All money and revenues of the corporation,

including the proceeds of loans raised by the corporation, when they come into

the hands of the corporation, shall be deposited to the credit of the fund referred

to in subsection (1) and the corporation shall have full authority to

administer the money so deposited for the purposes and objects of this Act.

Financial

provisions to have full effect

33. Notwithstanding

the Financial Administration Act or

another Act or law, paragraph 14 (1)(

h) and

section 32 of this Act shall have full effect.

Actions

(1) Actions,

suits or other legal proceedings in respect of a right or obligation acquired

or incurred by the corporation may be brought by or against the corporation in

the name of the corporation in a court and a judgment shall be carried into

effect by the corporation, and where the judgment is for the payment of money,

it may be enforced by execution against the money, lands and effects of the

corporation as in ordinary cases between party and party.

(2) The corporation is liable in tort for damages

for which, if it were a private person of full age and capacity, it would be

liable in respect of

(

a) torts committed by its employees or agents; or

(

b) a breach of duty attaching to the ownership,

occupation, possession or control of property.

(3) This

section has effect, notwithstanding

anything to the contrary contained in the

Proceedings Against the Crown Act or another Act or law.

Offences

(1) A

person who

(

a) contravenes this Act;

(

b) interferes with or

obstructs an inspector or other person in the discharge of his or her duties

under this Act

is guilty of an offence and liable on

summary conviction to a fine not

exceeding $1,000 and in default of payment of the fine to imprisonment for a

period not exceeding 12 months, or to both a fine and imprisonment.

(2) The conviction of a person under paragraph

(1)(

a) or (

b) does not operate as a bar to further prosecution under this Act

for a continuance of the offence.

Transitional

(1) Until

the board of directors is appointed under

section 6, the directors of Newfoundland and

Labrador Hydro on the day this Act comes into force are the directors of the

corporation.

(2) Until a chief executive officer is appointed

under

section 7, the chief executive officer of Newfoundland and

Labrador Hydro on the day this Act comes into force is the chief executive

officer of the corporation.

Commencement

37. This Act shall come into force on a day to be

proclaimed by the Lieutenant-Governor in Council.

Earl G. Tucker, Queen's Printer