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2003 Legislative Session: 4th Session, 37th Parliament

FIRST READING

The following electronic version is for informational

purposes only.

The printed version remains the official version.

HONOURABLE RICHARD NEUFELD

MINISTER OF ENERGY AND MINES

BILL 40 – 2003

UTILITIES COMMISSION AMENDMENT ACT, 2003

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Section 2 (9) and (10) of the Utilities Commission Act, R.S.B.C

1996, c. 473, is repealed and the following substituted:

(9) The chair may appoint a deputy chair or commissioner to act as chair for any purpose specified in the appointment.

Section 4 is amended

(

a) by repealing subsection (2) and substituting the following:

(2) The chair may organize the commission into divisions.

(

b) by repealing subsection (5) and substituting the following:

(5) At a sitting of the commission or of a division of

the commission, one commissioner is a quorum. ,

(

c) by repealing subsection (6) and substituting the following:

(6) The chair may designate a commissioner to serve as

chair at any sitting of the commission or a division of it. , and

(

d) by repealing subsections (8) and (9).

Section 11 (1) (

a) is amended by striking out "2 or" .

Section 13 (1) is amended by striking out "for the preceding

calendar year," and substituting "for the preceding fiscal year," .

Part 2 is repealed.

Section 45 is amended

(

a) in subsection (3) by striking out "a regulated project under

this Act or" , and

(

b) by adding the following subsections:

(6.1) A public utility must file the following plans with the commission in the form and at the times required by the commission:

(

a) a plan of the capital expenditures the public utility anticipates making over the period specified by the commission;

(

b) a plan of how the public utility intends to meet the demand for energy by acquiring energy from other persons, and the expenditures required for that purpose;

(

c) a plan of how the public utility intends to reduce the demand for energy, and the expenditures required for that purpose.

(6.2) After receipt of a plan filed under subsection (6.1), the commission may

(

a) establish a process to review all or part of the plan and to consider the proposed expenditures referred to in that plan,

(

b) determine that any expenditure referred to in the plan is, or is not at that time, in the interests of persons within British Columbia who receive, or who may receive, service from the public utility, and

(

c) determine the manner in which any expenditures referred to in the plan can be recovered in rates.

Section 60 (1) (

b) is repealed and the following substituted:

(

b) the commission must have due regard to the setting of a rate that

(

i) is not unjust or unreasonable within the meaning of

section 59,

(ii) provides to the public utility for which the rate is set a fair and reasonable return on any expenditure made by it to reduce energy demands, and

(iii) encourages public utilities to increase efficiency, reduce costs and enhance performance,

(b.1) the commission may use any mechanism, formula or

other method of setting the rate that it considers advisable, and may order

that the rate derived from such a mechanism, formula or other method is to remain

in effect for a specified period, and .

Part 4 is repealed and the following substituted:

Part 4 – Carriers, Purchasers and Processors

Definition

64.1 In this Part, "sufficient notice"

means notice in the manner and form, within the period, with the content and

by the person required by the commission.

Common carrier

(1) In this section, "common carrier"

means a person declared to be a common carrier by the commission under subsection

(2) (a).

(2) On application by an interested person and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, the commission may

(

a) issue an order, to be effective on a date determined by it, declaring a person who owns or operates a pipeline for the transportation of

(

i) one or more of crude oil, natural gas and natural gas liquids, or

(ii) any other type of energy resource prescribed by the Lieutenant Governor in Council,

to be a common carrier with respect to the operation of the pipeline, and

(

b) in the order establish the conditions under which the common carrier must accept and carry energy resources.

(3) On application by a person that uses or seeks to use facilities operated by a common carrier, the commission, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, may establish the conditions under which the common carrier must accept and carry crude oil, natural gas, natural gas liquids or prescribed energy resources referred to in subsection (2) (a).

(4) A common carrier must not unreasonably discriminate

(

a) between itself and persons who apply to the common carrier to transport, in its pipeline, crude oil, natural gas, natural gas liquids or prescribed energy resources referred to in subsection (2) (a) (ii), or

(

b) among the persons who so apply.

(5) A common carrier must comply with the conditions in any order applicable to the common carrier that is made under this section.

(6) The commission may, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary an order made under this section.

(7) If an agreement between a common carrier and another person

(

a) is made before an order is made under this section, and

(

b) is inconsistent with the conditions established by the commission in an order made under this section,

the commission may, in the order or in a subsequent order, after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary the agreement between the parties to eliminate the inconsistency.

(8) Subject to subsection (9), if an agreement is varied under subsection (7), the common carrier and the commission are not liable for damages suffered as a result of that variation by the other party to the agreement.

(9) Subsection (8) does not apply to a common carrier referred to in that subsection in relation to anything done or omitted by that person in bad faith.

Common purchaser

(1) In this section, "common purchaser"

means a person declared to be a common purchaser by the commission under subsection

(2).

(2) On application by an interested person and after a hearing, sufficient notice of which has been given to persons the commission believes may be affected, the commission may issue an order, to be effective on a date determined by it, declaring a person who purchases or otherwise acquires, from a pool designated by the commission, crude oil, natural gas or natural gas liquids to be a common purchaser of the crude oil, natural gas or natural gas liquids.

(3) On application by a person whose crude oil, natural gas or natural gas liquids is or will be purchased by a common purchaser, the commission, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, may establish the conditions under which the common purchaser must purchase crude oil, natural gas or natural gas liquid.

(4) A common purchaser must not unreasonably discriminate

(

a) between itself and persons who apply for the services offered by the common purchaser, or

(

b) among the persons who so apply.

(5) A common purchaser must comply with the conditions in any order applicable to the common purchaser that is made under this section.

(6) The commission may, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary an order made under this section.

(7) If an agreement between a common purchaser and another person

(

a) is made before an order is made under this section, and

(

b) is inconsistent with the conditions established by the commission in an order made under this section,

the commission may, in the order or in a subsequent order, after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary the agreement between the parties to eliminate the inconsistency.

(8) Subject to subsection (9), if an agreement is varied under subsection (7), the common purchaser and the commission are not liable for damages suffered as a result of that variation by the other party to the agreement.

(9) Subsection (8) does not apply to a common purchaser referred to in that subsection in relation to anything done or omitted by that person in bad faith.

Common processor

(1) In this section, "common processor"

means a person declared to be a common processor by the commission under subsection

(2).

(2) On application by an interested person and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, the commission may issue an order, to be effective on a date determined by it, declaring the person that owns or operates a plant for processing natural gas to be a common processor of natural gas.

(3) On application by a person that uses or seeks to use facilities operated by a common processor, the commission, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, may establish the conditions under which the common processor must accept and process natural gas.

(4) A common processor must not unreasonably discriminate

(

a) between itself and persons who apply for the services offered by the common processor, or

(

b) among the persons who so apply.

(5) A common processor must comply with the conditions in any order applicable to the common processor made under this section.

(6) The commission may, by order and after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary an order made under this section.

(7) If an agreement between a common processor and another person

(

a) is made before an order is made under this section, and

(

b) is inconsistent with the conditions established by the commission in an order made under this section,

the commission may, in the order or a subsequent order, after a hearing, sufficient notice of which has been given to all persons the commission believes may be affected, vary the agreement between the parties to eliminate the inconsistency.

(8) Subject to subsection (9), if an agreement is varied under subsection (7), the common processor and the commission are not liable for damages suffered as a result of that variation by the other party to the agreement.

(9) Subsection (8) does not apply to a common processor referred to in that subsection in relation to anything done or omitted by that person in bad faith.

Section 68 is amended

(

a) by repealing the definition of "electricity transmission

contract" ,

(

b) by repealing the definition of "energy supply contract"

and substituting the following:

"energy supply contract" means a contract under

which energy is sold by a seller to a public utility or another buyer, and includes

an amendment of that contract, but does not include a contract in respect of

which a

schedule is approved under

section 61 of this Act; , and

(

c) by adding the following

definitions:

"gas marketer" means a person who holds a gas marketer licence issued under

section 71.1 (6) (a);

"low-volume consumer" has the meaning ascribed

to it under rules made by the commission under

section 71.1 (10); .

Section 69 is repealed.

Section 71 is amended

(

a) in subsection (1) by striking out "A person" and substituting

"Subject to subsection (1.1), a person" , and

(

b) by adding the following subsection:

(1.1) Subsection (1) does not apply to an energy supply contract for the sale of natural gas unless the sale is to a public utility.

12 The following

section is added to

Part 5:

Gas marketers

71.1

(1) A person must not perform a gas marketing

activity within the meaning of subsection (2) unless

(

a) the person is a public utility and the public utility performs the gas marketing activity within any area in which it is authorized to provide service, or

(

b) the person holds a gas marketer licence issued to the person under subsection (6) (a).

(2) For the purposes of subsection (1), a person performs a gas marketing activity if the person

(

a) sells or offers to sell natural gas to a low-volume consumer,

(

b) acts as the agent or broker for a seller in a sale of natural gas to a low-volume consumer, or

(

c) acts or offers to act as the agent or broker of a low-volume consumer in a purchase of natural gas.

(4) A gas marketer must not carry on or offer to carry on business as a gas marketer in a name other than the name in which it is licensed unless authorized to do so in the licence.

(5) If a person is not in compliance with subsection (1), (3) or (4), the commission may do one or more of

(

a) declare an energy supply contract between the person and a low-volume consumer unenforceable, either wholly or to the extent the commission considers proper, in which event the contract is enforceable to the extent specified, and

(

b) if the person is a gas marketer,

(ii) suspend or cancel the gas marketer licence.

(6) The commission may

(

a) on application, issue a gas marketer licence to any person who is not a public utility,

(

d) suspend or cancel a gas marketer licence.

(8) The commission may order that some or all of the security posted by a gas marketer in accordance with a requirement imposed under subsection (7) be paid out to those persons who the commission considers have been or may be affected by

an act or omission of the gas marketer.

(9) Section 43 applies to each gas marketer as if that gas marketer were a public utility.

(10) The commission may make the following rules:

(

a) defining "low-volume consumer";

(

b) respecting the process by which application may be made for a gas marketer licence and specifying the form and content of applications for that licence;

(

d) requiring an applicant for a gas marketer licence to obtain a bond, letter of credit or other specified security and requiring the filing with the commission of proof, satisfactory to the commission, of that security;

(

e) respecting the form and content of security that may be required under paragraph (

d) and the person by whom and the terms on which it is to be held;

(

f) respecting the circumstances in which and the persons to whom disbursement of some or all of the security required under paragraph (

d) is to be made.

13 The following sections are added:

Alternative dispute resolution

86.1 The commission may encourage the use of alternative

dispute resolution methods for the purpose of resolving disputes relating to

the commission's discretion, functions and duties under this or any other enactment.

When oral hearings not required

86.2

(1) Despite any other provision of this Act,

in any circumstance in which, under this Act, a hearing may or must be held,

the commission may conduct a written hearing.

(2) The commission may make rules respecting the circumstances in which and the process by which written hearings may be conducted and specifying the form and content of materials to be provided for written hearings.

Section 88 is amended

(

a) in subsection (2) by striking out ", other than under

Part

2," , and

(

b) in subsection (3) by striking out ", other than

Part 2,

or may limit or vary the application of this Act, other than

Part 2."

and substituting "or may limit or vary the application of this Act."

Section 106 (1) (

g) is repealed.

Section 107 (1) (

a) and (2) is repealed.

Section 108 is amended

(

a) by striking out "section 15 or" , and

(

b) in paragraph (a) (

i) by striking out "energy project certificate,

energy operation certificate or energy removal certificate" and substituting

"energy project certificate or energy operation certificate" .

Section 109 (

a) is repealed.

Section 110 is amended by striking out "Subject to

the Economic Development Electricity Rate Act , the" and substituting

"The" .

Section 124 (4) is repealed.

Consequential Amendments

Economic Development Electricity Rate Act

21 The Economic Development Electricity Rate Act, R.S.B.C. 1996,

c. 104, is repealed.

Hydro and Power Authority Act

Section 32 (7) (

f) of the Hydro and Power Authority Act, R.S.B.C.

1996, c. 212, is repealed.

Oil and Gas Commission Act

23 Sections 19 to 21 of the Oil and Gas Commission Act, S.B.C.

1998, c. 39, are repealed.

Explanatory Notes

SECTION 1: [Utilities Commission Act, amends

section 2] provides

discretion to the chair of the Utilities Commission to determine who may act

as chair for any specified purpose.

SECTION 2: [Utilities Commission Act, amends

section 4] allows

one commissioner to sit as a division of the Utilities Commission and provides

discretion to the chair of the Utilities Commission to designate a commissioner

to serve as chair at any sitting of the Utilities Commission or at any division

of it.

SECTION 3: [Utilities Commission Act, amends

section 11 (1) (a)]

is consequential to the repeal of

Part 2 of the Act by this Bill.

SECTION 4: [Utilities Commission Act, amends

section 13 (1)]

requires that Utilities Commission annual reports be made for fiscal years rather

than calendar years.

SECTION 5: [Utilities Commission Act, repeals

Part 2] removes

from the Act the provisions dealing with energy removal certificates and regulated

projects.

SECTION 6: [Utilities Commission Act, amends

section 45]

harmonizes the language of this

section with the repeal of

Part 2 of the

Act by this Bill;

requires public utilities to file plans with the Utilities Commission;

authorizes the Utilities Commission to review the public utilities' plans

and determine how, if at all, the expenditures referred to in those plans

should be accommodated in the public utilities' rates.

SECTION 7: [Utilities Commission Act, amends

section 60 (1)]

requires the Utilities Commission, when setting rates, to allow public

utilities a fair return on expenditures designed to reduce energy demands

and to provide incentives to public utilities to increase efficiency;

allows the Utilities Commission to set rates by reference to any method

considered advisable by the Utilities Commission and to retain rates set by

a particular method for a specified period.

SECTION 8: [Utilities Commission Act, re-enacts

Part 4] reassigns

responsibility for declaring and dealing with common carriers, common purchasers

and common processors from the Oil and Gas Commission to the Utilities Commission.

SECTION 9: [Utilities Commission Act, amends

section 68]

(

a) is consequential to the repeal of

section 69 of the Act by this Bill,

(

b) broadens the definition of "energy supply contract" to cover all contracts

for the sale of energy regardless of how the energy is delivered, and

(

c) adds new

definitions required for

section 71.1 of the Act as enacted

by this Bill.

SECTION 10: [Utilities Commission Act, repeals

section 69] removes

Utilities Commission oversight of contracts under which the electricity transmission

facilities of a public utility are used by another person.

SECTION 11: [Utilities Commission Act, amends

section 71] limits

the application of

section 71 of the Act to energy supply contracts for the

sale of natural gas to a public utility.

SECTION 12: [Utilities Commission Act, enacts

section 71.1] establishes

Utilities Commission jurisdiction over gas marketing activities.

SECTION 13: [Utilities Commission Act, enacts sections 86.1 and 86.2]

provides for the Utilities Commission's use of alternative dispute resolution

methods and written hearings.

SECTION 14: [Utilities Commission Act, amends

section 88] harmonizes

the language of this

section with the repeal of

Part 2 of the Act by this Bill.

SECTION 15: [Utilities Commission Act, repeals

section 106 (1) (g)]

harmonizes the language of this

section with the repeal of

Part 2 of the Act

by this Bill.

SECTION 16: [Utilities Commission Act, repeals

section 107 (1) (

a) and

(2)] harmonizes the language of this

section with the repeal of

Part

2 of the Act by this Bill.

SECTION 17: [Utilities Commission Act, amends

section 108] harmonizes

the language of this

section with the repeal of

Part 2 of the Act by this Bill.

SECTION 18: [Utilities Commission Act, repeals

section 109 (a)]

harmonizes the language of this

section with the repeal of

Part 2 of the Act

by this Bill.

SECTION 19: [Utilities Commission Act, amends

section 110] harmonizes

the language of this

section with the repeal of the Economic Development

Electricity Rate Act by this Bill.

SECTION 20: [Utilities Commission Act, repeals

section 124 (4)]

harmonizes the language of this

section with the repeal of

Part 2 of the Act

by this Bill.

Economic Development Electricity Rate Act

SECTION 21: [Economic Development Electricity Rate Act, repeals the Act]

is self explanatory.

Hydro and Power Authority Act

SECTION 22: [Hydro and Power Authority Act, repeals

section 32 (7) (f)]

harmonizes the language of this

section with the repeal of the Economic Development

Electricity Rate Act by this Bill.

Oil and Gas Commission Act

SECTION 23: [Oil and Gas Commission Act, repeals sections 19 to 21]

is consequential to the reassignment of responsibility for common carriers,

common purchasers and common processors from the Oil and Gas Commission to the

Utilities Commission by this Bill.

Copyright (c) 2003: Queen's Printer, Victoria, British Columbia, Canada