IN THE MATTER OF the Energy Act, and Section 30 thereof, and IN THE MATTER OF Applications by Inland Natural Gas Co. Ltd. DECISION June 17, 1980 Before Norman R. Gish, Commissioner and R. John Ludgate, Commissioner
TABLE OF CONTENTS Page APPEARANCES LIST OF EXHIBITS DECISION Application related to the City of Prince George dated May 9, 1980 1 Application related to Chetwynd, Hudson's Hope and 100 Mile House dated May 21, 1980 ...... . 4
APPEARANCES J. J. Camp Pat G. Foy P. W. Butler for David F. Tyson J. Galt Wilson for R. B. Wallace for Prince George Pulp and Paper L. E. Bennett for Pacific Northern Gas Ltd. Tim Wood for The Village of 100 Mile House Clerk-Administrator Mr. Amos Commission Counsel Inland Natural Gas Co. Ltd. The City of Prince George The Corporation of the District of Hudson's Hope The Corporation of the Village of Chetwynd Limited Observer
LIST OF EXHIBITS In Respect of the Application Related to the City of Prince George 1. Letter, Inland Natural Gas, May 29, 1980 2. Letter, Inland Natural Gas, May 9, 1980 3. Schedules, 1977 Hearings 4. 1979 Annual Report 5. Schedules A and B 6. Letter dated March 10, 1980 7. Prepared Direct Testimony, K. MacMillan In Respect of the Application Related to the Village of Chetwynd, the District of Hudson's Hope and the Village of 100 Mile House l. Letter, May 29, 1980 2. Letter, May 21, 1980 3. Operating Agreement - Chetwynd 4. Operating Agreement - Hudson's Hope 5. Operating Agreement - 100 Mile House
INLAND NATURAL GAS CO. LTD. DECISION DATED JUNE 17, 1980 The applications by Inland Natural Gas Co. Ltd. ("Inland") under the Energy Act, RSBC 1979 Chapter 108 seek approval of an extension of certain terms and conditions of a Certificate of Public Convenience and Necessity covering the provision of natural gas service in the Prince George area and the approval of operating agreements with the Village of Chetwynd, the District of Hudson's Hope and the Village of 100 Mile House. The applications were set for hearing on ~ay 29, 1980 by Order G-25-80. Application related to the City of Prince George dated May 9, 1980 The Certificate held by Inland with attached Schedule A and B constitutes the whole of the authority of Inland to distribute natural gas in the Prince George area. There is no separate franchise agreement as is generally the case in the balance of the communities that Inland serves. This occurred as the result of certain difficulties Inland encountered in the initial stages of attempting to secure l
2 rights to distribute natural gas in the Prince George area in the late 1950's. The existing Certificate was issued by the Public Utilities Commission on July 14, 1958 and amended October 7, 1958. Schedules A and B, attached to the Certificate by P.U.C. Order dated June 12, 1959, contain provisions "normally" found in the franchise agreements that Inland holds in other parts of the service area and constitute the equivalent of a franchise agreement. It is these specific Schedules which have expired and which Inland is seeking approval to extend for a further period of 21 years. The application was supported by the City of Prince George. However, Prince George Pulp and Paper Co. Ltd. intervened in the hearing of the application and specifically opposed that part of t.he application which would continue the franchise fee. The evidence led by Prince George Pulp and Paper and their argument went to the justification for a franchise fee. The argument relied heavily on findings of this Commission in a report issued out of a general inquiry into franchise fees issued in February 1978. Counsel for Prince George Pulp and Paper quoted extensively from the findings and conclusions of the Commission at pages 4 through 8 of that report and suggested that circumstances had not changed
3 and the Commission should not approve a continuation of the franchise fee in extending Schedule A and B for a further period of 21 years. The Commission has considered this argument carefully. We have further taken into account that Order G-8-78 was overturned by the Court of Appeal of British Columbia on January 24, 1979. The Commission has approved a number of franchise renewals since the decision of the Court of Appeal and considers that it would be discriminatory to deal with the present application in a different manner. We consider that the extension of the term of Schedule A and B to the Certificate is necessary to maintain the privilege or concession for the public convenience of the consumers of natural gas in the Inland service area and properly conserves the public interest. We will therefore issue an Order approving the application of Inland herein extending for a further period of 21 years the Schedules forming part of a Certificate of Public Convenience and Necessity held by Inland to provide natural gas service in the Prince George service area.
4 Application related to Chetwynd, Hudson's Hope and 100 Mile House dated May 21, 1980 The application to approve operating agreements between Inland and the three communities of Chetwynd, Hudson's Hope and 100 Mile House were filed with the Commission on May 21, 1980 and set down by Order G-25-80 for hearing on May 29th. The application is supported by agreements containing operating conditions between each municipality and Inland related to the provision of natural gas service. The operating conditions contain the basic provisions of a typical franchise agreement utilized by Inland in its service area, with the exception of a provision for a franchise fee and a specific term. We think the concession proposed by the operating agreements in each case is necessary for the public convenience of the consumers of natural gas in Chetwynd, Hudson's Hope and 100 Mile House and properly conserves the public interest. In order that equity be maintained between these municipalities and those other municipalities served by Inland we will also order that a franchise fee of 3% be paid by Inland to each municipality running with the Certificate issued herein which
5 shall be for a term of 21 years. The fee will be calculated and paid in a manner consistent with that presently utilized with the other municipalities. DATED at the City of Vancouver, in the Province of British Columbia, this 1980. • R.
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