ORDER NUMBER
G-157-22
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
Ka:’yu:'k't'h' / Che:k'tles7et'h' First Nations
Reconsideration of Order G-368-21 Directives 1 & 2
BEFORE:
D. M. Morton, Panel Chair
C. M. Brewer, Commissioner
T.A. Loski, Commissioner
on June 10, 2022
ORDER
WHEREAS:
A. On January 14, 2022, pursuant to section 99 of the Utilities Commission Act (UCA), the Ka:’yu:'k't'h' / Che:k'tles7et'h' First Nations (KCFN) submitted to the British Columbia Utilities Commission (BCUC) an application to reconsider Directives 1 and 2 of Order G-368-21 on the grounds that the BCUC erred in law in finding that the flat administrative fee collected by KCFN constitutes compensation for an electrical service provided by KCFN. In the alternative, KCFN requests the BCUC exempt KCFN from all of Part 3 and s. 71 of the UCA (Reconsideration Application);
B. On February 10, 2022, by Order G-27-22, the BCUC established a public hearing to review the Reconsideration Application and established a regulatory timetable seeking submissions on:
1. Whether nominal fees, such as those charged by KCFN to its citizens, can be considered compensation, as defined in the UCA; and
2. The applicability of the UCA to KCFN, as a Treaty Nation.
C. By Order G-368-21 and accompanying reasons for decision dated December 10, 2021, the BCUC determined, in part, that KCFN is a public utility as defined in Section 1(1) of the UCA and directed KCFN and Kyuquot Power Ltd. (KPL) to negotiate an agreement concerning the joint use of facilities within three months of issuance of the order;
D. The KPL power distribution system (KPL System) is interconnected to the British Columbia Hydro and Power Authority (BC Hydro) electric system and supplies customers, including KCFN, the Village of Houpsitas and others on the outer coast of Kyuquot Sound, with electricity;
E. Crown Corridor is defined in Chapter 7 of the Maa-nulth First Nations Final Agreement;
F. On April 28, 2021, by Order G-129-21, the BCUC established a regulatory timetable seeking submissions on:
1. Whether, with respect to the portion of the line on the Crown Corridor, KCFN meets the definition of a public utility; and
2. Submissions on the applicability of section 27 of the UCA on shared KCFN infrastructure.
G. On May 28, 2021, pursuant to Order G-129-21, KCFN filed its submissions and stated that KCFN does not meet the definition of a public utility. KCFN further submitted that even if it did meet the definition of public utility under the UCA, the BCUC should recommend an exemption for KCFN from all portions of the UCA.
On May 28, 2021, KPL filed its submissions pursuant to Order G-129-21;
H. On June 2, 2021, KCFN submitted correspondence to KPL addressing a number of safety, reliability and legal matters, including concerns that KPL is transmitting power across KCFN’s infrastructure on the Crown Corridor without appropriate legal agreements and KCFN’s concerns over the safety of KPL’s “fly-over” line through Houpsitas;
I. On July 9, 2021, by Order G-212-21, the BCUC established a further regulatory timetable seeking submissions from parties on whether the BCUC has jurisdiction on treaty land, with respect to the fly-over line through Houpsitas on shared KCFN/KPL poles and KPL-owned poles and submissions on who is currently responsible for the maintenance of the fly-over line through Houpsitas on shared KCFN/KPL poles and KPL-owned poles;
J. Section 88(3) of the UCA states: “the commission, may, on conditions it considers advisable, with the advance approval of the minister responsible for the administration of the Hydro and Power Authority Act, exempt a person, equipment or facilities from the application of all or any of the provisions of this Act or may limit or vary the application of this Act”;
K. By March 2, 2022, KPL and Zone 1B Ratepayers Group registered as interveners and on March 23, 2022; KPL made submissions pursuant to Order G-27-22;
L. On April 21, 2022, by Order G-105-22, the BCUC established a further regulatory timetable, including one round of BCUC and intervener information requests (IR) followed by final arguments and KCFN reply;
M. On April 21, 2022, the BCUC issued IR No. 1 to KCFN and by April 26, 2022, no interveners had submitted IR No. 1 in accordance with the regulatory timetable;
N. On May 3, 2022, KCFN requested a 21-day extension of the regulatory timetable to support ongoing coordination with staff (Extension Request) and on May 4, 2022, the BCUC approved KCFN’s Extension Request and amended the regulatory timetable;
O. On May 26, 2022, KCFN submitted its response to BCUC Information Request No. 1;
P. On June 2, 2022, KCFN submitted its Final Argument on IR No. 1 Response in accordance with the regulatory timetable;
Q. By June 9, 2022, no interveners had submitted Final Arguments in accordance with the regulatory timetable; and
R. The BCUC, after considering the evidence and submissions made finds that the following determination is warranted.
NOW THEREFORE pursuant to section 99 of the Utilities Commission Act and the reasons attached as Appendix A to this order, the BCUC rescinds directives 1, 2 and 4 of Order G-368-21, dated December 10, 2021.
DATED at the City of Vancouver, in the Province of British Columbia, this 10th day of June 2022.
BY ORDER
Original signed by:
D. M. Morton
Commissioner
Attachment
Ka:’yu:'k't'h' / Che:k'tles7et'h' First Nations
Reconsideration of Order G-368-21 Directives 1 & 2
REASONS FOR DECISION
Table of Contents
Page no.
2.0 Legislative and Regulatory Framework
1.0 Introduction
On January 14, 2022, pursuant to section 99 of the Utilities Commission Act (UCA), the Ka:’yu:'k't'h' / Che:k'tles7et'h' First Nations (KCFN or Nation) submitted to the British Columbia Utilities Commission (BCUC) an application to reconsider Directives 1 and 2 of Order G-368-21 on the grounds that the BCUC erred in law in finding that the flat administrative fee collected by KCFN constitutes compensation for an electrical service provided to the public by KCFN. In the alternative, KCFN requests the BCUC to exempt KCFN from all of Part 3 and s. 71 of the UCA (Reconsideration Application).
1.1 Background
By Order G-368-21 and accompanying reasons for decision dated December 10, 2021, the BCUC determined, in part, that KCFN is a public utility as defined in Section 1(1) of the UCA and directed KCFN and the Kyuquot Power Ltd. (KPL) to negotiate an agreement concerning the joint use of facilities within three months of issuance of the order.
The KPL power distribution system (KPL System) is interconnected to the British Columbia Hydro and Power Authority (BC Hydro) electric system and supplies customers, including KCFN, the village of Houpsitas and others on the outer coast of Kyuquot Sound, with electricity. The KPL System is located, in part, on KCFN Treaty Lands, and includes infrastructure located on structures owned by KCFN and operated by KPL without a written joint-use agreement.
KCFN is a self-governing Nation and a signatory to the Maa-Nulth First Nations Final Agreement between KCFN, Canada and British Columbia, a tri-partite comprehensive land claim agreement within the meaning of s. 35 of the Constitution Act, 1982[1], and became effective in 2011 (MFA).[2] The village of Houpsitas is on lands included in the MFA.[3] The BCUC established a regulatory timetable to review the safety and reliability of the KPL System following a complaint by a representative of the KCFN.[4]
The BCUC proceeding investigating the safety and reliability of the KPL system was adjourned and directives of Order G-368-21 were stayed pending the outcome of the Reconsideration Application.
2.0 Legislative and Regulatory Framework
The framework that guides the process to determine whether to reconsider a BCUC decision includes both the Utilities Commission Act and the BCUC Rules of Practice and Procedure (Rules).[5]
Section 99 of the UCA provides “the commission, on application or on its own motion, may reconsider a decision, an order, a rule or a regulation of the commission and may confirm, vary or rescind the decision, order, rule or regulation.[6]
Rule 26.05 of the Rules provides that an application for reconsideration must contain a concise statement of the grounds for reconsideration and include one or more of the following grounds:
a) the BCUC has made an error of fact, law, or jurisdiction which has a material bearing on the decision;
b) facts material to the decision that existed prior to the issuance of the decision were not placed in evidence in the original proceeding and could not have been discovered by reasonable diligence at the time of the original proceeding;
c) new fact(s) have arisen since the issuance of the decision which have material bearing on the decision;
d) a change in circumstances material to the decision has occurred since the issuance of the decision; or
e) where there is otherwise just cause.[7]
The following sets out the key legislative provisions at issue in this proceeding.
Public utility legislative provisions
Section 1(1) of the UCA defines a public utility, in part as follows:
“public utility” means a person, or the person’s lease, trustee, receiver or liquidator, who owns or operates in British Columbia, equipment or facilities for
(a) the production, generation, storage, transmission, sale, delivery or provision of electricity, natural gas, steam or any other agent for the production of light, heat cold or power to or for the public or a corporation for compensation..
but does not include
(d) a person not otherwise a public utility who provides the service or commodity only to the person or the person’s employees or tenants, if the service or commodity is not resold to or used by others.
Section 1(1) of the UCA defines compensation and tenant as follows:
“compensation” means a rate, remuneration, gain or reward of any kind paid, payable, promised, demanded, received or expected, directly or indirectly, and includes a promise or undertaking by a public utility to provide service as consideration for, or as part of, a proposal or contract to dispose of land or any interest in it.
“tenant” does not include a lessee for a term of more than 5 years.
3.0 Regulatory Process
On February 10, 2022, by Order G-27-22, the BCUC established a public hearing to review the Reconsideration Application and established a regulatory timetable seeking submissions on:
(i) Whether nominal fees, such as those charged by KCFN to its citizens, can be considered compensation, as defined in the UCA; and
(ii) The applicability of the UCA to KCFN, as a Treaty Nation.
KPL and Zone1B Ratepayers Group (Zone 1B-RPG) registered as interveners to the proceeding. On March 23, 2022, KPL provided its written submission[8]. On April 13, 2022, KCFN provided its reply to intervener submissions.[9]
On April 21, 2022, by Order G-105-22, the BCUC further amended the regulatory timetable and included one round of Information Requests (IR). On April 21, 2022, the BCUC issued IR No. 1 to KCFN. No interveners submitted IR No. 1 in accordance with the regulatory timetable.
On May 26, 2022, KCFN provided its responses to BCUC IR No. 1 and on June 2, 2022, KCFN filed its Final Argument on the response to IR No. 1 in accordance with the regulatory timetable.
No interveners submitted Final Arguments on KCFN’s response to IR No. 1.
4.0 Summary of Evidence
KCFN requested the BCUC to reconsider its finding that KCFN is a public utility as defined in the UCA, on the grounds that, among other things:
a. the Order (BCUC Order G-368-21) is not responsive to KCFN’s particular status as a modern Treaty Nation;
b. the BCUC erred in finding that the flat administrative fee collected by KCFN constitutes compensation for an electrical service provided by KCFN, when in fact the fee merely serves as a partial offset for a subsidy provided by KCFN to its citizens for electricity delivered by KPL;
c. the citizens from which KCFN collects this fee are not members of the public at large, but rather are akin to tenants residing on KCFN-owned land; and
d. the BCUC did not consider whether, on a purposive reading of the UCA, a nominal administrative fee should trigger s.1(1) definition of “public utility.[10]
In response to BCUC IRs, KCFN clarified that as a modern Treaty Nation, KCFN only have citizens living on Treaty Settlement Lands (TSL) and the land is owned by KCFN. Further, the citizens rent from the Nation, with approximately 85% of the homes in the village of Houpsitas having explicit rental agreements with the Nation for their residences and 15% of the homes in Houpsitas being inhabited by KCFN citizens without a formal tenancy agreement. KCFN submit that in both these cases, the land title remains with the Nation and therefore, residents are akin to tenants of KCFN and there are no leases of more than five years in the village of Houpsitas.[11]
In its submission, KCFN also indicated that the KCFN tenancy agreement provides a lease of one year, which continues thereafter on a month-to-month basis.[12]
KCFN also clarified that there are no agreements between KCFN and residents respecting electricity services, and that the tenancy agreements between KCFN and residents provide clarity regarding terms of rentals and utilities, including payments that defray some of the Nation’s electrical costs, with residents paying a flat energy fee of $100 per month, or $60 per month if they have a wood stove for heat.[13]
KCFN submitted that KPL is currently making unauthorized use of one of KCFN’s three-phase conductors, which KCFN’s engineering team does not see a feasible means of continuing to accommodate without jeopardizing service to its own citizens.[14] KCFN previously submitted that it receives no compensation for KPL’s use of the KCFN-owned line which transmits power to KPL’s downstream customers.[15]
5.0 Panel Determination
The Panel finds that KCFN does not operate as a public utility pursuant to section 1(1) of the UCA. The parties from which KCFN collects an administrative fee reside entirely on land owned by KCFN and do not include lessees for a term of more than 5 years, and therefore satisfy the definition of tenant in section 1(1) of the UCA. Accordingly, KCFN is excluded from regulation by the BCUC because it meets the exclusion in paragraph (d) of the definition of a public utility in section 1(1) of the UCA. The Panel takes no position as to whether the administrative fee collected by KCFN constitutes compensation within the meaning of the UCA.
Although portions of the KPL system are located on structures owned by KCFN, KCFN does not collect an administrative fee or receive any form of compensation for electricity transmitted to any parties outside of KCFN-owned land. Therefore, KCFN does not act as a public utility for electricity transmitted through KCFN-owned infrastructure for the use of KPL or its ratepayers. The Panel also notes that KCFN receives no compensation for KPL’s use of the KCFN-owned line which transmits power to KPL’s downstream customers.
Accordingly, the Panel rescinds directives 1, 2 and 4 of Order G-368-21, dated December 10, 2021. The panel emphasizes the importance of a joint-use agreement to ensure safe and reliable operation of shared infrastructure; however, given that KCFN is not a public utility under the UCA, the BCUC does not have jurisdiction to direct KCFN to negotiate such an agreement. Regardless of whether KPL is able to negotiate a joint-use agreement with KCFN, it is incumbent on KPL to ensure the safety and reliability of its system for all users of that system including KCFN and its residents.
[1] Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c. 11.
[2] Exhibit C2-9, p. 2.
[3] Exhibit C2-14, p. 1.
[4] Order G-115-20.
[6] Utilities Commission Act, RSBC 1996, c. 473, s. 99.
[7] BCUC Rules of Practice and Procedure, Order G-15-19, dated January 22, 2019, Appendix A., pp. 15-16
[8] Exhibit C1-2
[9] Exhibit B-2
[10] Exhibit B-1, pp. 1-2
[11] Exhibit B-4, p. 1
[12] Exhibit B-4, p. 1
[13] Exhibit B-4, p. 2
[14] Exhibit B-1, p. 5
[15] Investigation Into the Safety and Reliability of the KPL System, Exhibit C2-11, p.4