First Session, 47th

General Assembly

61 Elizabeth II,

BILL 61

AN ACT TO AMEND THE ELECTRICAL

POWER CONTROL

ACT, 1994, THE ENERGY CORPORATION ACT AND

THE HYDRO CORPORATION ACT, 2007

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

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

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

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

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

HONOURABLE JEROME

P. KENNEDY, Q.C.

Minister of Natural

Resources

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Electrical Power Control Act, 1994, the

Energy Corporation Act and the Hydro Corporation Act, 2007 to advance

the implementation of the Muskrat

Falls Project.

The Bill would amend the Electrical Power Control Act, 1994 to

expand the scope of the

direction that the Lieutenant-Governor in Council may give to the Public

Utilities Board as relates to the Muskrat

Falls Project;

provide to Newfoundland and

Labrador Hydro the exclusive right to supply, distribute and sell electrical power

or energy to a retailer or an industrial customer in respect of the business or

operations of that retailer or industrial customer on the island portion of the

province, subject to certain exceptions; and

require that a retailer or an industrial

customer buy electrical power or energy from Newfoundland and Labrador Hydro in respect

of the business or operations of that retailer or industrial customer on the island

portion of the province.

The Bill would amend the Energy Corporation Act to

define the Muskrat Falls

Project;

clarify the Crown agency status

of the corporation as relates to the Muskrat

Falls Project; and

exempt borrowing for the Muskrat Falls Project from the limit currently

prescribed in the Act for the corporation and its subsidiaries.

The Bill would also amend the Hydro Corporation Act, 2007 to clarify

the Crown agency status of the corporation as relates to the Muskrat Falls Project.

A BILL

AN ACT TO AMEND THE ELECTRICAL POWER CONTROL

ACT, 1994, THE ENERGY CORPORATION ACT AND THE HYDRO CORPORATION ACT, 2007

Analysis

ELECTRICAL POWER CONTROL ACT, 1994

S.2 Amdt.

Definitions

S.5.1 Amdt.

Direction to board

Part II.1 Added

PART II.1

EXCLUSIVE RIGHT

14.1 Exclusive right to

supply, transmit,

distribute and sell

14.2 No liability

ENERGY CORPORATION ACT

S.2 Amdt.

Definitions

S.2.1 Added

Muskrat Falls Project

S.3.1 Added

Crown agency status

7. S.14 Amdt.

General powers

8. S.16 R&S

Application of Acts

S.27 Amdt.

Performance under guarantee

S.28 R&S

Total amount of loan

HYDRO CORPORATION ACT, 2007

S.2 Amdt.

Definitions

S.3.1 Added

Crown agency status

S.5 Amdt.

Corporation's objects

14. S.14 Amdt.

General powers

S.18 R&S

Application of Acts

16. S.29 Amdt.

Performance under guarantee

17. Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

ELECTRICAL POWER CONTROL ACT, 1994

SNL1994 cE-5.1

as amended

(1) Section 2 of the Electrical Power Control Act, 1994 is amended by adding immediately

after paragraph (

j) the following:

(j.1) "Muskrat Falls Project" means the Muskrat

Falls Project as defined in the Energy

Corporation Act ;

(2) Section 2 of the Act is amended by adding

immediately after paragraph (

o) the following:

(o.1) "public utility" means a public utility as

defined in the Public Utilities Act;

Section 5.1 of the Act is amended by renumbering it as subsection 5.1(1) and by adding

immediately after that subsection the following:

(2) Notwithstanding a provision of this Act or

the

Public Utilities Act, for the purpose

of the Muskrat Falls Project the Lieutenant-Governor in Council may direct the

public utilities board to implement policies, procedures and directives

respecting the exercise of powers and the performance of the duties of the

public utilities board under this Act or the

Public Utilities Act , including policies, procedures and directives

respecting

(

a) the costs, expenses and allowances that

are to be included in the rates, tolls and charges approved for a public

utility, and the terms of that inclusion;

(

b) the terms of the interim orders, orders or

approvals determining rates, tolls and charges of a public utility;

(

c) the criteria to be applied by the public

utilities board for the approval or confirmation of an approval by the public

utilities board;

(

d) the annual rate of return of a public

utility;

(

e) whether or not a hearing shall be held;

(

f) the commencement, suspension, continuation

or termination of a hearing or process; and

(

g) the parameters, criteria and timing of the

exercise or restraint from exercise of a power or performance of a duty of the

public utilities board under this Act or the

Public Utilities Act.

(3) The public utilities board shall implement

the policies, procedures and directives of the Lieutenant-Governor in Council as

directed under subsection (2).

3. The Act is amended by adding immediately after

section 14 the following:

PART II.1

EXCLUSIVE RIGHT

Exclusive right to

supply, transmit, distribute and sell

14.1

(1) Notwithstanding

another provision of this Act or another Act,

(

a) Newfoundland and Labrador Hydro shall have

the exclusive right to supply, distribute and sell electrical power or energy to

a retailer or an industrial customer in respect of the business or operations of

that retailer or industrial customer on the island portion of the province; and

(

b) a retailer or an industrial customer shall

purchase electrical power or energy exclusively from Newfoundland and Labrador Hydro in respect of

the business or operations of that retailer or industrial customer on the island

portion of the province.

(2) Notwithstanding another provision of this

Act or another Act, a retailer or an industrial customer shall not develop, own,

operate, manage or control a facility for the generation and supply of

electrical power or energy either for its own use or for supply directly or

indirectly to or for the public or an entity on the island portion of the

province.

(3) Subsection (1) does not apply to an

industrial customer if that industrial customer is purchasing electrical power

or energy in respect of its business or operations on the island portion of the

province exclusively from a retailer to whom subsection (1) applies.

(4) Subsections (1) and (2) do not apply to

generation facilities owned, operated, managed or controlled by a retailer or an

industrial customer where the electrical power or energy generated is used by

the retailer or industrial customer exclusively in emergency circumstances.

(5) Subsection (2) does not apply to

generation facilities owned, operated, managed or controlled by a retailer or an

industrial customer where those

facilities existed on December 31, 2011, including the refurbishment of those

facilities.

(6) A contract or arrangement entered into

before or after the coming into force of this

section which is contrary to this

section is unenforceable.

(7) Notwithstanding another provision of this

section, the Lieutenant-Governor in Council may, by order, exempt a retailer or

an industrial customer from the application of this

section or a subsection of

it.

No liability

14.2

(1) A person is not entitled to compensation or damages from the Crown or a

minister, employee or agent of the Crown arising from, resulting from or

incidental to the operation of this Part.

(2) An action or proceeding does not lie or

shall not be instituted or continued against the Crown or a minister, employee

or agent of the Crown based on a cause of action arising from, resulting from or

incidental to the operation of this Part.

(3) For the purpose of this section, the

corporation established by the Energy

Corporation Act and Newfoundland

and Labrador Hydro are agents of the Crown.

ENERGY CORPORATION ACT

SNL2007 cE-11.01

as amended

4. The Energy

Corporation Act is amended by adding immediately after paragraph 2(

f) the

following:

(f.1) "Muskrat Falls Project" means the Muskrat

Falls Project as described in

section 2.1;

5. The Act is amended by adding immediately after

section 2 the following:

Muskrat Falls Project

2.1

(1) For the purpose of this Act, "Muskrat Falls Project" means a project by the

corporation, a subsidiary of the corporation, Newfoundland and Labrador Hydro

and Emera Inc., whether individually or by any combination of them, for

(

a) the design, engineering, planning,

construction, commissioning, ownership, operation, maintenance, management and

control of equipment and facilities, to be comprised of

(

i) the new hydroelectric plant to be

constructed at Muskrat Falls on the Churchill River, and all associated

facilities, including the intake structures, penstock, powerhouse, dams and

spillways,

(ii) a new HVdc transmission line and all

related components to be constructed between the Muskrat Falls hydroelectric

plant on the Churchill River and Soldier's Pond, including

(

A) foundations, underground services, subsea

services, roads, buildings, erections and structures, whether temporary or

permanent,

(

B) all other facilities, fixtures,

appurtenances and tangible personal property, including inventories, of any

nature whatsoever contained on or attaching to the transmission line, and

(

C) all mechanical, electrical and other

systems and other technology installed under or upon anything referred to in

clause (

A) or (B),

(iii) new transmission facilities to be

constructed between the Muskrat Falls hydroelectric plant on the Churchill River and

the generating plant located at Churchill Falls ,

(iv)

new transmission facilities to be constructed by Emera Inc. between the island

portion of Newfoundland and Labrador and Cape Breton , Nova

Scotia including

(

A) foundations, underground services, subsea

services, roads, buildings, erections and structures, whether temporary or

permanent,

(

B) all other facilities, fixtures,

appurtenances and tangible personal property, including inventories, of any

nature whatsoever contained on or attaching to them, and

(

C) all mechanical, electrical and other

systems and other technology installed under or upon anything referred to in

clause (

A) or (B), and

(

v) any associated upgrades to the bulk

electrical system or related control facilities on the island portion of the

province required as a result of subparagraphs (

i) to (iv);

(

b) the production, generation, storage,

transmission, delivery or provision of electrical power and energy from the

facilities in paragraph (a);

(

c) the negotiation, conclusion, execution and

performance of agreements for activities referred to in paragraphs (

a) and (b),

and in particular agreements respecting the

(

i) construction, operations, maintenance and

administration,

(ii) acquisition of easements, rights-of-way,

permits, licences, certificates, consents and other authorizations,

(iii) engineering and procurement,

(iv) arrangements with aboriginal peoples,

(

v) demobilization and decommissioning, and

(vi) any agreements, contracts or instruments

necessary or incidental to any activity described in this paragraph; and

(

d) raising and securing equity or debt financing and any related derivative

contracts necessary to construct the facilities and otherwise engage in the

activities referred to in paragraphs (

a) to (c), including without limitation

the negotiation, conclusion and execution of agreements and security

documentation with a lender providing that financing or refinancing to the

projects.

(2) The Lieutenant-Governor in Council may

designate any activities, agreements and amendments in connection with or in

respect of subsection (1) entered into by the corporation, a subsidiary of the

corporation,

Newfoundland

and Labrador Hydro, and Emera Inc., whether individually or by any combination

of them

(

a) to be included as part of the Muskrat

Falls Project where that activity, agreement or amendment may not otherwise

qualify under this section; and

(

b) to be excluded from the Muskrat Falls

Project, notwithstanding another provision of this section.

(3) For the purpose of this section, "Emera

Inc." includes all affiliates, subsidiaries, successors and assigns of that

corporation.

6. The Act is amended by adding immediately after

section 3 the following:

Crown agency

status

3.1

(1) Notwithstanding subsections 3(5), (6) and (7), where the corporation enters

into contracts and ancillary arrangements relating to the Muskrat Falls Project,

the corporation shall be considered to have entered into those contracts and

ancillary arrangements in its own capacity and not as an agent of the Crown, and

the Crown shall not be liable as principal in contract, tort or otherwise at law

or equity for the liabilities of the corporation created directly or indirectly

by those contracts or arrangements.

(2) Notwithstanding subsection (1), the

corporation may execute contracts relating to the Muskrat Falls Project as an

agent of the Crown where

(

a) the Lieutenant-Governor in Council has

approved the contract; and

(

b) the contract explicitly states that the

corporation signs the contract as an agent of the Crown.

7. Paragraph 14(1)(

a) of the Act is repealed and

the following substituted:

(

a) where it is an agent of the Crown, on

behalf of the Crown, or where it is not an agent of the Crown, in its own

capacity, 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;

Section 16 of the Act is repealed and the

following substituted:

Application of

Acts

Whether or not 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.

Section 27 of the Act is amended by renumbering

it as subsection 27(1) and by adding immediately after that subsection the

following:

(2) Notwithstanding subsection (1), in respect

of the Muskrat Falls Project, 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.

Section 28 of the Act is repealed and the

following substituted:

Total amount of

loan

(1) The total amount of money to be raised by the corporation and its

subsidiaries in the aggregate by loans shall not exceed $600 million in Canadian

currency or its equivalent in the currency of another country.

(2) The total of all loans to the corporation

and its subsidiaries in the aggregate to be guaranteed by or on behalf of the

Crown shall not exceed $600 million 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 its subsidiaries and of guarantees

given under this Act, no account shall be taken of amounts raised by way of loan

(

a) that have been repaid or 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; or

(

b) by the corporation or its subsidiaries in

respect of the Muskrat Falls Project.

HYDRO CORPORATION ACT, 2007

SNL2007 cH-17

Section 2 of the Hydro Corporation Act, 2007 is amended by adding immediately after

paragraph (

f) the following:

(f.1) "Muskrat Falls Project" means the Muskrat

Falls Project as defined in the Energy

Corporation Act;

12. The Act is amended by adding immediately after

section 3 the following:

Crown agency

status

3.1

Notwithstanding subsections 3(4), (5) and (6), where the corporation enters into

contracts and ancillary arrangements relating to the purchase of electrical

energy, capacity and transmission services including contracts providing for

direct cost reimbursement to the Muskrat Falls Project, the corporation shall be

considered to have entered into those contracts and ancillary arrangements in

its own capacity and not as an agent of the Crown, and the Crown shall not be

liable as principal in contract, tort or otherwise at law or equity for the

liabilities of the corporation created directly or indirectly by those contracts

or arrangements.

13. Subsection 5(2) of the Act is repealed and the

following substituted:

(2) Notwithstanding subsection (1), the

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

Council may approve.

14. Paragraph 14(1)(

a) of the Act is repealed and

the following substituted:

(

a) where it is an agent of the Crown, on

behalf of the Crown, or where not an agent of the Crown, in its own capacity

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;

Section 18 of the Act is repealed and the

following substituted:

Application of

Acts

Whether or not 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.

Section 29 of the Act is amended by renumbering

it as subsection 29(1) and by adding immediately after that subsection the

following:

(2) Notwithstanding subsection (1), in respect

of the Muskrat Falls Project, 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.

Commencement

17. This Act, or a section, subsection, paragraph or

subparagraph of this Act, comes into force on a day or days to be proclaimed by

the Lieutenant-Governor in Council.

Queen's Printer