D 1987
OF . Gas II AND l. Cost 3. and Rates under Inland ~'· v 1. of Gas 2. of of Granisle VI A 61 c (ii) I l 2 lj. 7 8 12 1 15 16 Inland 1 and
D.M . . 0. J.O. R. P.MURRAY HYRAPET A. Natural for Inc. for Officer
for Re: of 5 of 7 I - 1 .5 1987
I BACKGROUND l. Gas Co. Ltd. Gas Co. British Fort 1 shares turn owns A Convenience delivered to truck in an the view to to to is second in West Oil construct a lot in of the Ltd. with
also an shares of were unable to acted on the Com the transfer of shares was In 1986, (nSuperior"), turn, and common and in turn. In as one The structure and embedded cost debt/equity structure of the Lim to use is serving 700 customers. the all of the then Utilities and as Inc., the of unsecured 1986, funds to the company, Noreen in of distribution is a d on
3 In '-'"'rYtPm 1966, Products to I a to 40 houses and a on 1 a Public Commission for the distribution to serve the Granisle This on October 27, 1972 to to ''""nrnv 160 customers. name not a a of $343,000 as at 31' 1 For purposes, Granisle to the structure of it uses tax
II THE APPLICATIONS AND HEARING Inland made 18, l to it would "cause i) to finance to (v) transfer its to l) of the for of such assets II covenants l of service into to be to Gas
on to escrow for date not to the assets based on net asset 987, with of 61 Commission issued Order No. G-62-87 dated to commence November 19, 1987 in of dated 31' of ies made on l common an Order 31' was for the of 3 ' after which states: 1987 a B.C.
Mr. a of to alternate fuels (i.e. a document in of of of rates for the circumstances the customers. of times ive with
7 III THE ISSUES issues were case. l. cost was an cost a propane for is 1/10 in response to company undertake Inland if on 90 the mission in its for the and Granisle one to as ified the concern so cost source 1 of its the if
In response to the file to propane Pursuant to are to be to the mission. a mechamsm for a deferral account the the to aoorove a account at the matter as will be allowed to fluctuate one cent per litre before customer rates are the cost. of steel the to current state of the assets The four propane to the is for the current at met to from 93 further notice Director of at Inland the books of some it is not tirne the of to re is rail tank car. it is of the to a
of the assets in re survey assessments done on Commission The concludes that is at an est of 9 the most Canadian is leak that the the be currently to ensure rected to to to to that new area and the some contract
10 notes the to current rate of to the of Inland customers of any mams extension in excess 3. In (Exhibit to to any by consumers to the of service. The Mr. Powell, Executive in to a rates to customers retroact a rate review test reduced rates were found would would not of ial in and is 1 s exoanswn olans on "' "'' it of rates for if to reduce its on an cross-examination if a review based on be still 1987, but if to rate of return on rates
1 l In the course of to look into future revenue the tax account Inland has services in the the range of per year. of to the Commission's reauest tor addlt 2, P· in the to for outcome of as of its ion for of matters These include structure costs of the an fees to to Gas s and the ion Gas The fees Inland a
12 (e) it no Certificate to so to ex tens ion test on in the event that a e in has until of "
l3 5. Inland was Gas and of to to its case. and access. assumes that access and make the effort to etc. to was Inland to and is risk when are undertaken. the Commission notes in 11 re: it believes there is (!ro notes that to what costs would l upon the customers of has any cont on its it was Tab 1, P· for the not to of a useful amount and from if and that while that of ial in the service area, but contention. if it were to rn, Gas. be as was to ion reason
4 ies to at its cost to necessary to assessment of concurs be this in to
l 5 IV COMMISSION CONCLUSIONS On the customers w to the Sect accordine:lv concludes that. in an exoenencea unJnv ooerawr is with P<:nPrT to contained concludes that there no On benefit is assets to the result assets
V THE DECISIONS l. is to rates to be rnatter will lf and area. any to be filed with by The is The Commission has is a Ltd. an the 100% 1 the Commission over will not be recovered in customers at becomes in free access to Com on a to se II the assets to Section .59 of the that .for the assets of Granisle for to continue to
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"'s~ co ~ Q;) - yY :-,;T,'":'f,l -. , . .. . t .. . .. , . . , ~ ~ ''" " ~>·' , " " '~ ' \ , .\Yihl'f"\ ....,, \~' :,, > " j ;;~ s cotfl\ PROVINCE OF BRITISH COLUMBIA BRITISH COLUMBIA UTILITIES COMMISSION IN THE MATTER OF the Utilities Commission Act, S.B.C. 1980, c. 60 as amended and IN THE MATTER OF Applications by Inland Natural Gas Co. Ltd., and Superior Propane Inc. BEFORE: J.D. V. Newlands, Deputy Chairman; D.B. Kilpatrick, Commissioner; and N. Martin, Commissioner WHEREAS Inland Natural Gas Co. Ltd. ("Inland") applied June 18, 1987 pursuant to Section 61 of the Utilities Commission Act ("the Act") for an Order of the Commission approving its acquisition of 30,000 6% Non-Cumulative Redeemable Preferred and 125,000 Common shares of Squamish Gas Co. Ltd. ("Squarnish ("Superior") for $773,635; and WHEREAS Inland and Superior by agreement dated June 18, 1987 specified that following Commission approval of the acquisition by of Gas Squarnish Gas Granisle Grid as at March 31, 1987 from Superior Propane Inc. for $126,365; and WHEREAS Superior Propane Inc. applied June 18, 1987 pursuant to Section 61(4) of the Act for Commission approval of the transfer of the ownership of all of the shares of WHEREAS Superior also applied pursuant to Section 59(1) of the Act to dispose of the whole of its Granisle Grid operations to Squarnish Gas at the closing of the transfer of Squarnish Gas shares to Inland; and FOURTH FLOOR, bOO SM!fHf:; SlREET VANCOIIVE:R, B C l .u;z, ~ v UTILITIES COMMISSION ..,. , _ .A . · ,. · , ~ <;;. L~ q 0 ORDER ~ " "' ' C :! NUMBER G-76-87 November 25, 1987 Gas") from Superior Propane Inc. acquire the assets of the Gas owned by Superior to Inland; and ... /2 V6Z 2t:1 CANADA RAP!COM. 1~0 {604) 660· i 102 W,1105
2 WHEREAS by Order No. G-62-87 the Commission ordered a public hearing of the Applications to commence Thursday, November 19, 1987 at Squamish, B.C.; and WHEREAS the Commission has considered the evidence adduced at the NOW THEREFORE the Commission hereby orders as follows: A. The acquisition of Squamish Gas Co. Ltd. by Inland Natural Gas Co. Ltd. is approved effective the date of this Order subject to the following conditions: (i) That any premium over the net book value as at March 31, 1987 of the equity of Squarnish Gas to be paid by Inland will not be recovered in the rates to be paid by the customers of Squamish Gas. (ii) That Squarnish Gas will be given free access by Superior Propane Inc. to any information substantiating the propane prices to Squarnish Gas by monthly reports Commission. B. The acquisition of the Assets of Granisle Grid by Squamish Gas is approved effective the date of this Order but such approval is not to be construed by indicating that the Commission has recognized any specific value for the assets of Granisle Grid for regulatory purposes. C. Inland and Squarnish Gas will comply with the several conditions contained in the Commission Decision issued concurrently with this Order. D. Inland and Squarnish Gas will comply with the commitments concerning customer rates as enunciated during the hearing by Mr. Randall Powell, Executive Vice-President of Inland. E. The costs of these proceedings are to be shared equally by Inland and Superior. DATED at the City of Vancouver, in the Province of British Columbia, this J?,5 1 laay of November, 1987. 265A/30 ORDER NUMBER G-76-87 Superior, with thereon to be filed with the the Applicants as BY O 0 / R : ~~ ! o / /; ~ ') ~ ~ , ' ~: . . , ~d I
APPENDIX A Section 61 of the Utilities Commission Act of British Columbia Reviewable interests 61. (1) In this section "offeree" means a person to whom a take over bid is made; "offeror" means a person, other than an agent, who makes a take over bid and includes 2 or more persons (a) whose bids are made jointly or in concert, or (b) who intend to exercise jointly or in concert any voting rights attaching to the shares for which a take over bid is made; "take over bid" has the same meaning as in the Securities Act; "voting share" means a share which has, or may under any special rights or restrictions attached to the share have, the right to vote for the election of directors and for this purpose "share" includes a security convertible into such a share and options and rights to acquire such a share or such a convertible security. 2419184 23 l ( 3)
SBC CHAP. 60 UTILITIES CO.'v1\1!SSJOC' 29 Euz. 2 (Replacing RS 1979, c. 108 and 40 J \ (2) For the purposes of this section, persons are associates where (a) one of the persons is a corporation (i) of which more than 10% of the shares outstanding of any class of the corporation are beneficially owned or controlled, directly or indirectly, by the other person, or (ii) of which the other is a director or officer, (b) each of the persons is a corporation and (i) more than 10% of the shares outstanding of any class of shares of one are beneficially owned or controlled, directly or indirectly, by the other, or (ii) more than 10% of the shares outstanding of any class of shares of each are beneficially owned or controlled, directly or indirectly, by the same person, (c) they are partners or one is a partnership of which the other is a partner, (d) one is the spouse or child of the other, (e) one is a trust in which the other has a substantial beneficial interest or for which the other serves as trustee or in a similar capacity, (f) one is a relative of the other or of the other's spouse and has the same home as the other, or (g) they are obligated to act in concert in exercising a voting right in respect of shares of the utility, and for the purpose of this definition (h) "spouse" includes a man or woman not married to each other who are living together and have lived together as husband and wife for a period of not less than 2 years, and "child" includes a child in respect of whom that person stands in place of a parent, and (i) where a person has more than one associate, those associates are associates of each other. (3) For the purpose of this section, a person has a reviewable interest in a public utility where he owns or controls, or he and his associates own or control, in the aggregate more than 20% of the voting shares outstanding of any class of the utility. (4) A public utility shall not, without the approval of the commission, issue, sell, purchase or register on its books a transfer of shares in the capital of the utility or create or attach to any shares, whether issued or unissued, any special rights or restrictions where the issue, sale, purchase or registration or the creation or attachment of the special rights or restrictions would (a) cause any person to have a reviewable interest, (b) increase the percentage of voting shares owned by a person who has a reviewable interest, (c) be a registration of a transfer of shares, the acquisition of which was contrary to subsection (6) or (7), or (d) increase the voting rights attached to any shares owned by a person has a reviewable interest. (5) Failure of a public utility to ::omply with subsection (4) does not give rise to an offence where the public utility acts in the bona fide belief based on an enquiry made with reasonable care, that the issue, sale, purchase or registration, or the creation or attach-24 2 ( 3) 249 8~
1980 UTILITIES CoMMISsio:--; SBC CHAP. 60 (Replacin£ RS 1979, c. l 08 and 40 II ment of the special rights or restrictions, would not have the effects referred to in subsection (4) (a) to (d). !\o person shall acquire or shall acquire control of such numbers of any class of shares of a public utility as in themselves or together with shares already owned or controlled by the person and his associates, cause him to have a reviewable interest in a public utility unless he has obtained the commission's approval. (7) Except where the acquisition or acquisition of control does not increase the percentage ofvoting shares held, owned or controlled by the person or by the person and his associates, no person having a reviewable interest in a public utility and no associate of that person shall acquire or acquire control of any voting shares in the public utility unless he has obtained the commission's approval. (8) The commission may give its approval under this section subject to conditions and requirements it considers necessary or desirable in the public interest, but the commission shall not give its approval under this section unless it considers that the public utility and the users of the service of the public utility will not be detrimentally affected. (9) Where the commission determines that there has been a contravention of subsection (4), (6) or (7), the commission may, on notice to the public utility and after a hearing, make an order imposing on the public utility conditions and requirements respecting the management and operation of the utility. (1 0) No proceeding shall be brought against the commission or the government by reason of the exercise by the commission of its powers under subsection (8) or (9). (11) Every offeror who makes a take over bid for shares of a public utility shall (a) tile a copy of the take over bid and all supporting or supplementary material with the commission within 5 days after the date the material is ftrst sent to offerees, and (b) include in or attach to the take over bid a notice setting forth the provisions of this section and stating the number, without duplication, and designation of any shares of the public utility held by the offeror and his associates. (12) Nothing in subsection (11) relieves a person from any requirement of or under the Securities Act or its regulations. 1982-54-20, proclaimed July 28, 1982, effective July 9, 1982; 1984-25-66. 3 ( 3)
APPENDIX B Section 59(1) of the Utilities Commission Act of British Columbia Restraint on disposition 59. (1) Except for a disposition of its property in the ordinary course of business, a public utility shall not, without first obtaining the commission's approval, dispose of or encumber the whole or a part of its property, franchises, licences, permits, concessions. privileges or rights. or by any means. direct or indirect, merge, amalgamate or consolidate in whole or in part its property. franchises. licences permits, concessions. pivileges or rights with those of another person. (}) The commission may give its approval under this section subject to conditions and requirements considered necessary or desirable in the public interest. l9XO-h0-59: 191>2-54-18. prnclatmec July 2R. 198:2. effective July 9. 1982.
APPENDIX C THIS AGREEMENT made this 30th day of June 1987 BETWEEN SUPERIOR PROPANE INC. a federal corporation hereinafter called "Superior" OF THE FIRST PART AND SQUAMISH GAS CO. LTD. a company duly incorporated under the laws of the Province of British Columbia, herinafter called "Squamish" OF THE SECOND PART (1) WHEREAS Superior is engaged in the business of supplying propane and Squamish is engaged in the business of distributing propane through its grid system to consumers and to certain off grid customers. (2) AND WHEREAS Squamish also distributes propane through its Granisle Grid System. NOW THEREFORE this Agreement witnesseth that in consideration of the mutual covenants herein contained and other good and valuable consideration, Superior and Squamish hereby agree as follows:
-2-PART 1 1. During the term of this Agreement Squamish hereby agrees to purchase all its requirements of propane from Superior for the purposes of supply through the Squamish and Granisle grid systems in the province of British Columbia and Superior agrees to supply all such requirements upon the terms and conditions hereinafter set forth. 2. The initial term of this Agreement for the supply of propane shall co~~ence on the date of closing as contemplated in the agreement between Superior and Inland Natural Gas. Co. Ltd. dated the 18th day of June 1987, (the "June 18, 1987 Agreements"). The Agreement shall renew automatically for subsequent one year terms commencing April 1st of each year, unless cancelled in writing by either party giving notice of not less than ninety (90) days prior to the expiration of the initial or any subsequent term created hereunder. 3. Superior agrees to supply stenched Grade 1 propane (HDS) to the Squamish and the Granisle facilities. 4. Superior agrees that it shall supply propane to Squamish and Granisle at the current rack price at point of purchase plus taxes, plus freight, plus 1/10 cent per litre. The
-3-current rack price is subject to change as the refinery source may direct and Superior will advise Squamish of such change at the time and place of each delivery. 5. Squamish agrees to pay Superior for the propane purchased within thirty ( 30) days from the receipt of invoices supplied by Superior to Squamish. 6. Squamish acknowledges that while Superior shall use its best efforts to supply propane, Superior shall not be liable for Superior's failure or delay in delivering propane due to any event or occurrence which is beyond the control of Superior, but Superior shall immediately notify Squamish of such event or occurrence. 7. Superior and Squamish agree that during the initial term of this Agreement or any subsequent renewal thereof that the following procedure shall govern orders and deliveries of propane to Squamish. (1) Squarnish shall set out and advise Superior one full month's delivery schedule, sixty (60) days in advance, of the prescribed monthly requirement. (2) Superior will permit cancellation of any scheduled shipment upon five (5) days notice by
-4-Squamish to Superior. (3) Squamish will endeavour to keep Superior advised of their supply pattern. PART 11 8. Except as provided herein Squamish agrees that Superior shall have the right to continue to utilize the Squamish facility as a terminal for a period of five (5) years from date of closing as contemplated in the June 18, 1987 Agreement, from which Superior may draw its requirements of propane for the purposes of supply and servicing to the customers of Superior. This arrangement may, however, be terminated at any time by either party upon the giving to the other party one hundered and eighty (180) days written notice. 9. In consideration of the arrangement as set out in Paragraph 8 herein, Superior shall pay to Squamish Squamish's cost of product as determined in Paragraph 4 herein, together with 1/2 cent per litre, said amount payable on the quantity of product acquired by Superior from Squamish and payable thirty (30) days from receipt of invoices supplied by Squamish to Superior.
-5-10. During the term of this Agreement, Squamish, Superior shall conduct storage facilities on a time and hourly rate chargeable herein shall be $27.00 per hour man. Superior shall supply to Squamish motors and pumps at current list price less 20% and the other parts required to maintain the plant at current list price less 30%. 11. As requested by Superior, provide to Superior for Superior's operations in and the municipality of Squamish, services such as: office services, collections and payments, meter reading, supervision and other services provide to Superior from Squamish's local employees. For such requested services, shall reimburse Squamish a·t the rate of $1,000.00 per month for the month in which the said services are utilized. 12. As and when requested Superior agrees, subject to availability of manpower, to make available to Squamish and Granisle the services necessary to assist Squamish and Granisle in customer service, plant operation and at the request of the maintenance of the materials basis. The per and Granisle the Squamish agrees to about monthly administrative customer service, customer sign ups, which Squamish may local office and Superior requested and by Squamish and Granisle, service, standby maintenance, new customer
-6-connections and other propane grid system services. For such services Squamish and Granisle shall reimburse Superior at the rate of $20.00 per hour, per man, plus accommodation and meals; said rate to be effective for the first six (6) months as to Squamish from date of closing as contemplated in the June 18, 1987 Agreements and for the first twelve (12) months as to Granisle from the date of closing as contemplated in the June 18, 1987 of these Agreements as it affects Granisle; and thereafter the rate shall be increased to $27.00 per hour, per man. 13. As requested by Squamish, Superior shall supply a bulk truck and driver to effect deliveries to the customers of Squamish who are within the rate base of Squamish but who are off-grid customers. For this service, Squamish and shall pay to Superior the sum of 4 cents per litre. 14. The term of the Agreement for the supply of services under clause 8 shall be for a period of five (5) years commencing upon the date of closing as contemplated in the June 18, 1987 Agreements and subject to termination at any time as set out in clause 8. The term of the provisions of clauses 11, 12, 13 shall be for a period of twelve ( 12) months commencing upon the date of closing as contemplated in the June 18, 1987 Agreements. Such terms shall renew automatically for subsequent twelve (12) month terms unless cancelled in writing by either party giving notice not less
-7-than ninety (90) days prior to the expiration of the initial and any subsequent term created hereunder. PART 111 15. Squamish and Superior acknowledge and agree that the terms and conditions expressed in this agreement constitute the entire agreement and that there are no representations and warranties relied upon by either party not expressed herein. 16. Squamish and Superior agree that the terms and provisions of this agreement shall be governed by and be interpreted by the laws of the province of British Columbia. 17. Any notice required or omitted to be given pursuant to this agreement shall be in writing and shall be forwarded by prepaid registered mail to the parties at the following addresses: Squamish Gas Co. Ltd. c/o Inland Natural Gas Co. Box 12603, 1066 West Hastings Street Vancouver, B.C. V6F 3G3 Attn: G. M. 0. Solly, Vice-President Operations and to Superior Propane Inc. 8474 Keele Street Concord, Ontario L4K 255 Attention: Vice-President, Marketing
-8-and to Superior Propane Inc. 715 - 5th Avenue S.W. Calgary, Alberta T2P 2X7 18. This Agreement shall enure to and be for the benefit of and be binding upon the parties hereto, their respective successors and assigns. IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. SQUAMISH GAS CO. LTD. Per: ~J--;; L:'-<-~.::1.~=== Per: XD~cJ~ SUPERIOR PROPANE INC. / Per: ·-? 1---/--- ·-; £::,< {---Per: X.~ c::J~-n/
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.