IN THE MATTER OF
the Utilities Commission Act, R.S.B.C. 1996, Chapter 473
and
An Application by Quicksilver Resources Canada Inc.
for an Exemption from Part 3 of the Utilities Commission Act
for Natural Gas Transportation and Processing Facilities
BEFORE: D.M. Morton, Commissioner June 14, 2012
O R D E R
WHEREAS:
A. Quicksilver Resources Inc. (Quicksilver) intends to enter into fee-for-service contracts with third parties for the transportation and processing of natural gas through the use of the Fortune Creek System and related facilities that Quicksilver owns;
B. By letter dated August 31, 2011, Quicksilver applied pursuant to section 88(3) of the Utilities Commission Act (Act) for an exemption from Part 3 of the Act for the Fortune Creek system and related facilities (Application);
C. By letter dated September 21, 2011, the British Columbia Utilities Commission (Commission) requested that Quicksilver provide a copy of the Application and Commission letter to potentially affected parties including those Quicksilver anticipates are likely to want to contract for service in the Quicksilver facilities and that these potentially affected parties should submit any comments on the Application by October 6, 2011. No comments have been received;
D. By letter dated September 29, 2011, Quicksilver responded to an Information Request from the Commission;
E. Facilities which have been exempted from Part 3 of the Act may continue to be regulated under the Act on a complaint basis;
F. The Commission has considered the Application and is satisfied that an Order, under section 88(3) of the Act, exempting the Quicksilver Fortune Creek system and related facilities from the requirements under Part 3 properly conserves the public interest;
G. On May 31, 2012, the Lieutenant Governor in Council issued Order in Council No. 370 (Order in Council) that is attached as Appendix II of this Order, giving approval to the Commission to exempt Quicksilver from certain provisions of the Act for the purpose and subject to the terms set out in this Order;
H. The Commission may find it is in the public interest to exempt a Quicksilver transportation or processing facility that is not listed in Appendix I to the draft Order attached to the Order in Council after Quicksilver advises the Commission in writing that it will begin to use the facility to transport or process natural gas for others;
I. Section 99 of the Act provides that the Commission may reconsider, vary or rescind an Order made by it.
NOW THEREFORE the Commission orders as follows:
1. Pursuant to section 88(3) of the Act and subject to paragraphs 2, 3 and 4 of this Order, the Commission approves for Quicksilver an exemption from Part 3 of the Act of the facilities listed in Appendix I which Quicksilver uses to transport or process natural gas for others, effective the date of this Order.
2. Facilities listed in Appendix I to this Order will be regulated under the Act on a complaint basis, with a complaint taking the form of a written application to the Commission from a person whose interests are affected.
3. This exemption, granted pursuant to this Order, shall remain in effect until the Commission orders that it be reconsidered, varied or rescinded, for reasons that may include the determination of any complaint the Commission receives from a person whose interests are affected.
4. Quicksilver is directed to advise the Commission, in writing, of any facility that is not listed in Appendix I and which Quicksilver intends to use to transport and process natural gas for others, so that the Commission, on finding that the exemption of such facility is in the public interest can, by Order, issue a revised Appendix I.
5. Quicksilver is responsible for the safe and proper operation of its facilities consistent with the requirements of the Oil and Gas Activities Act and other regulatory requirements.
6. Quicksilver is directed to file an annual report regarding each exempted facility in the form set out in Appendix III, or as the Commission may otherwise require, and to distribute copies to the shippers using the facility.
7. Quicksilver is directed to pay fees to the Commission in the amounts that the Commission determines are required to defray costs associated with the regulation of Quicksilver facilities.
DATED at the City of Vancouver, in the Province of British Columbia, this 15th day of June 2012.
BY ORDER
Original signed by:
D.M. Morton
Commissioner
Attachments
QUICKSILVER RESOURCES CANADA INC.
Transportation and Processing Facilities in British Columbia
Exempted from Part 3 Regulation
1. Fortune Creek system of Northeastern British Columbia –
1.0 Compressor facility, dehydrator, pipelines and related facilities.
ANNUAL REPORTING REQUIREMENTS
Complaint Regulation of Companies that Transport or Process Gas for Others
A Report is required for each Separate, Significant Pipeline System or Processing Facility
(Companies are to file Reports within 90 days after fiscal year-end)
1.1 Previous Year Actuals
• Facility name, location, function, capacity.
• Any significant changes in capacity during the year.
• Throughput during the year.
• Names, address, contact name and telephone number for each shipper.