ORDER NUMBER

G-150-20

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

City of Coquitlam

Application for Reconsideration and Variance of Order G‐80‐19 in the matter of the FortisBC Energy Inc. Application for Use of Lands under Sections 32 and 33 of the Utilities Commission Act in the City of Coquitlam for the Lower Mainland Intermediate Pressure System Upgrade

BEFORE:

R. I. Mason, Panel Chair

W. M. Everett, QC, Commissioner

on June 11, 2020

ORDER

WHEREAS:

A.      On May 16, 2019, pursuant to section 99 of the Utilities Commission Act (UCA), the City of Coquitlam (City) filed with the British Columbia Utilities Commission (BCUC) an application for Reconsideration and Variance of Order G‐80‐19 (Application);

B.      By Order G‐80‐19 and accompanying reasons for decision dated April 15, 2019, the BCUC issued its decision regarding FortisBC Energy Inc.’s (FEI) application for use of the City’s lands for the construction and operation of the Lower Mainland Intermediate Pressure System Upgrade Projects (LMIPSU Projects), including the disposition of the Nominal Pipe Size (NPS) 20 Pipeline which FEI proposed to decommission (Original Proceeding). The BCUC ordered, among other things, the following:

1.       Pursuant to section 121 of the UCA, it is affirmed that FEI is authorized to abandon the decommissioned NPS 20 Pipeline in place; and

2.       Pursuant to section 32 of the UCA, upon request by the City in circumstances where it interferes with municipal infrastructure, the costs of removal of any portion of the decommissioned NPS 20 Pipeline shall be shared equally between FEI and the City;

C.      In its Application, the City requests that the BCUC reconsider and vary Order G‐80‐19 on the grounds that the BCUC erred in law by:

1.       Finding that the BCUC had jurisdiction to authorize FEI, within the meaning of the term “authorization” as used in section 121 of the UCA, to abandon in place FEI’s decommissioned NPS 20 pipes located in Como Lake Avenue; and

2.       Finding that section 32 of the UCA provides the BCUC with jurisdiction to specify the manner and terms under which the City may request FEI to remove any portion of the NPS 20 pipes abandoned in place;

D.      By Order G‐75‐20 dated April 2, 2020, The BCUC ordered as follows:

1.       The City’s Reconsideration Application seeking that the BCUC rescind directive 1 of Order G‐80‐19 is dismissed.

2.       Parties are requested to make submissions on further process in accordance with the regulatory timetable attached as Appendix B to this order, on the following matters:

                                 i.            Whether the BCUC’s determination on the cost allocation formula was made based on fair process; and

                               ii.            If the BCUC determines that the evidentiary record should be re‐opened with respect to the cost allocation formula:

o   What is the appropriate regulatory process, including proposed timelines; and

o   The nature and scope of any additional evidence to be filed, and why this evidence could not have been filed as part of the Original Proceeding; 

E.       By letter dated April 23, 2020, the City provided its submission on further process. By April 30, 2020 FEI, British Columbia Hydro and Power Authority (BC Hydro) and Commercial Energy Consumers of BC (CEC) provided their submissions on further process. By letter dated May 7, 2020, the City provided its reply;

F.       By letter dated May 11, 2020, the BCUC sought further submissions respecting the administrative efficiency of continuing with or adjourning this reconsideration proceeding;

G.     By letter dated May 20, 2020, the City provided its further submissions. On May 27, 2020, FEI, BC Hydro and CEC provided their further submissions and on June 3, 2020, the City provided its reply; and

H.      The BCUC has reviewed the submissions on further process and considers that further regulatory process is warranted.

NOW THEREFORE the BCUC orders a further regulatory timetable is established, as set out in Appendix A, and for the reasons set out in Appendix B.

DATED at the City of Vancouver, in the Province of British Columbia, this                 11^th                 day of June 2020.

BY ORDER

Original signed by:

R. I. Mason

Commissioner

Attachment

City of Coquitlam 

Application for Reconsideration and Variance of Order G‐80‐19 in the matter of the FortisBC Energy Inc. Application for Use of Lands under Sections 32 and 33 of the Utilities Commission Act in the City of Coquitlam for the Lower Mainland Intermediate Pressure System Upgrade Projects

City of Coquitlam

Application for Reconsideration and Variance of Order G‐80‐19 in the matter of the FortisBC Energy Inc. Application for Use of Lands under Sections 32 and 33 of the Utilities Commission Act in the City of Coquitlam for the Lower Mainland Intermediate Pressure System Upgrade Projects

1.0              Background

On May 16, 2019, the City of Coquitlam (City) filed an application for Reconsideration and Variance of Order
G‐80‐19 in the matter of the FortisBC Energy Inc.’s (FEI) Application for Use of Lands under Sections 32 and 33 of the Utilities Commission Act (UCA) in the City of Coquitlam for the Lower Mainland Intermediate Pressure System Upgrade (LMIPSU) Projects (Reconsideration Application) with the British Columbia Utilities Commission (BCUC).

In its Reconsideration Application, the City seeks an order that the BCUC rescind directives 1 and 2 of Order
G‐80‐19 in their entirety. With respect to directive 2, the City alleges that the BCUC erred in law by specifying a cost allocation formula which applies when the City requests FEI to remove any portion of the gas pipeline, which has been abandoned in place (cost allocation formula). The City submits that the BCUC made that decision arbitrarily and based on an unfair process, and that had the BCUC sought evidence and submissions from the parties on this issue, it is likely that an alternative approach could have been devised.[1]

In establishing a regulatory timetable for the review of the Reconsideration Application, the BCUC also stated in directive 2 of Order G-150-19 dated July 8, 2019: “The potential need for new evidence regarding the cost allocation methodology for the removal of the decommissioned NPS 20 Pipeline is adjourned, pending a determination on the BCUC’s jurisdiction under section 32 of the UCA, as outlined in the Application.”

By Order G‐75‐20 dated April 2, 2020 the BCUC ordered as follows:

1.       The City’s Reconsideration Application seeking that the BCUC rescind directive 1 of Order G‐80‐19 is dismissed.

2.       Parties are requested to make submissions on further process in accordance with the regulatory timetable attached as Appendix B to this order, on the following matters:

                     i.      Whether the BCUC’s determination on the cost allocation formula was made based on fair process; and

                   ii.      If the BCUC determines that the evidentiary record should be re‐opened with respect to the cost allocation formula: 

o   What is the appropriate regulatory process, including proposed timelines; and

o   The nature and scope of any additional evidence to be filed, and why this evidence could not have been filed as part of the Original Proceeding. 

2.0              Submissions on Further Process

The City submits that the BCUC should continue the adjournment ordered by Order G-150-19 because there is not a final determination on the BCUC’s jurisdiction at this time. As noted in the cover letter to the Reconsideration Application, the City filed and served on the BCUC a Notice of Application for Leave to Appeal from Order No. G-80-19, paragraphs 1 and 2. The City submits that it would not be an efficient use of the BCUC’s resources to proceed with reconsideration of the remaining issues with the cost allocation formula specified in paragraph 2 of Order G-80-19 when the BCUC’s jurisdiction to make such an order is under appeal. In the circumstances, the City requests that the BCUC continue the adjournment ordered by Order G-150-19 until the appeal is decided. The City further submits that there is no urgent need to proceed with reconsideration of the remaining issues with the cost allocation formula at this time.[2]

By later dated May 11, 2020, the BCUC requested further submissions from the parties on the following matters:

•         that the City advise whether it intends to continue to pursue reconsideration of the procedural fairness issue, or whether it is abandoning this ground as a separate basis for reconsideration; and

•         why administrative efficiency is not better promoted by requiring the parties to complete the determination of all issues in the reconsideration process at this time so the Court of Appeal could deal with all appealable issues in one rather than possible multiple proceedings.[3]

In its further submission, the City confirms it is not abandoning its application for reconsideration in relation to the procedural fairness issue. It also submits it does not have the right to defer its appeal of decisions the BCUC made pursuant to Orders G-80-19 and G-75-20 until the BCUC makes a decision on the remaining issues. The City is proceeding at this time with its appeal of decisions the BCUC made pursuant to Orders G-80-19 and G-75-20.[4]

FEI[5] and British Columbia Hydro and Power Authority[6] do not object to continued adjournment but are prepared to continue the reconsideration if the BCUC so determines. Commercial Energy Consumers of BC submits it may be more cost effective and practical if all aspects of the Reconsideration Aare dealt with in advance of proceeding to the Court of Appeal.[7]

Panel Determination

For the reasons set out below, the Panel determines that it is appropriate to continue with the Reconsideration Application and establish further regulatory process to address the remaining issue in the proceeding.

As noted in Exhibit A-9, the Panel expressed concerns about the administrative efficiency of adjourning the reconsideration proceeding, stating:

The Panel understands that the City's proposed process would be administratively efficient if the City is successful in the Court of Appeal proceedings, but its preliminary view is that it may well be inefficient if the City is unsuccessful. If the City were unsuccessful, the reconsideration proceeding would need to resume to address the remaining outstanding issues in the reconsideration leading to possible further Court of Appeal proceedings, entailing greater time and expense for all parties.[8]

These concerns remain for the Panel. Additionally, while the City states it intends to proceed with its appeals, the Panel observes that it may well be a significant time (particularly during the interruptions to the Court system as a result of COVID-19) before the Court of Appeal renders its final decision if leave to appeal is granted. To ensure continuity of BCUC resources, such as the Panel, we consider that it would be preferable to conclude the Reconsideration Application expeditiously. Further, the Panel believes that if the Reconsideration proceeding is completed in a timely manner, it may allow the Court of Appeal to deal with all the issues in one rather than possibly multiple proceedings.

With respect to addressing the remaining issue in the Reconsideration proceeding, the Panel is willing to consider allowing submissions regarding the introduction of new evidence at this time with respect to the cost allocation formula. The Panel notes that the City did not address the Panel’s request to outline the nature and scope of any new evidence it seeks to file in either its April 23, 2020 submission or its subsequent submissions. The Panel is therefore unable to consider the admissibility of any new evidence regarding the remaining issues in the Reconsideration proceeding until further submissions have been made.

The Panel therefore directs that it will proceed with its hearing of this Reconsideration proceeding in respect of the remaining issues of whether the BCUC’s determination on the cost allocation formula was made based on fair process, and seeks submissions on further process, including the following matters:

•         Whether the City seeks to file additional evidence respecting the cost allocation formula, and if so, a description of the nature and scope of such evidence and why the City considers the evidence to be admissible

•         If so, interveners’ submissions on the admissibility of such evidence; and

•         The City’s reply submissions on the admissibility of such evidence.

Following a determination by the Panel on the admissibility of new evidence, further process will be determined.