ORDER NUMBER

F-27-23

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

FortisBC Energy Inc.

Application for a Certificate of Public Convenience and Necessity

for the Tilbury Liquefied Natural Gas Storage Expansion Project

Interim Participant Assistance/Cost Award Application

 

BEFORE:

A. K. Fung, KC, Panel Chair

T. A. Loski, Commissioner

R. I. Mason, Commissioner

D. M. Morton, Commissioner

on August 2, 2023

 

ORDER

WHEREAS:

 

A.      On December 29, 2020, FortisBC Energy Inc. (FEI) filed an application with the British Columbia Utilities Commission (BCUC) for the approval of a Certificate of Public Convenience and Necessity for the Tilbury Liquefied Natural Gas (LNG) Storage Expansion Project (Application);

B.      The regulatory process included: A workshop dated March 11, 2021; an in-camera technical session to address the confidentiality of security sensitive information in the Application; two rounds of written information requests (IRs); filing of intervener evidence, rebuttal evidence, and IRs on the same; one round of Panel IRs; a further round of written IRs regarding the signing of the Tilbury LNG Projects Agreement by the Musqueam Indian Band and FortisBC Holdings Inc.; and written final arguments by FEI and interveners, and reply argument by FEI;

C.      The following parties registered as interveners in this proceeding: British Columbia Old Age Pensioners’ Organization et al. (BCOAPO); BC Sustainable Energy Association (BCSEA); Citizens for My Sea to Sky Society (MS2S); Commercial Energy Consumers Association of British Columbia (the CEC); Musqueam Indian Band; Residential Consumer Intervener Association (RCIA); Sentinel Energy Management Inc. (Sentinel Energy); and Tsleil-Waututh Nation (TWN);

D.      By Order G-62-23 dated March 23, 2023, the BCUC adjourned the proceeding, pending the filing of evidence by FEI;

E.       The following interveners filed Interim Participant Assistance/Cost Award (PACA) applications with the BCUC with respect to their participation in the proceeding:

F.       By letters dated May 8, June 12 and July 24, 2023, FEI provided its comments on the Interim PACA applications; and

G.      The BCUC has reviewed the Interim PACA applications in accordance with the criteria and rates set out in the PACA Guidelines, attached to BCUC Order G-97-17, and concludes that the cost awards should be approved with adjustments for certain interveners.

 

NOW THEREFORE pursuant to section 118(1) of the Utilities Commission Act, the BCUC orders as follows:

 

1.       Funding is awarded to the following interveners as a final award for costs already incurred in the listed amounts for their participation in the proceeding:

 

2.       FEI is directed to reimburse the above-noted interveners for the awarded amounts in a timely manner.

DATED at the City of Vancouver, in the Province of British Columbia, this   2^nd   day of August 2023.

 

BY ORDER

 

Original signed by:

 

A. K. Fung, KC

Commissioner

 

Attachment

FortisBC Energy Inc.

Application for a Certificate of Public Convenience and Necessity

for the Tilbury Liquefied Natural Gas Storage Expansion Project

Interim Participant Assistance/Cost Award Application

 

1.0              Introduction

On December 29, 2020, FortisBC Energy Inc. (FEI) filed an application with the British Columbia Utilities Commission (BCUC) for the approval of a Certificate of Public Convenience and Necessity for the Tilbury Liquefied Natural Gas (LNG) Storage Expansion Project (Application).

 

The regulatory process included: A workshop dated March 11, 2021; an in-camera technical session to address the confidentiality of security sensitive information in the Application; two rounds of written information requests (IRs); filing of intervener evidence, rebuttal evidence, and IRs on the same; one round of Panel IRs; a further round of written IRs regarding the signing of the Tilbury LNG Projects Agreement by the Musqueam Indian Band and FortisBC Holdings Inc.; and written final arguments by FEI and interveners, and reply argument by FEI.

 

The following parties registered as interveners in this proceeding:

•         British Columbia Old Age Pensioners’ Organization et al. (BCOAPO);

•         BC Sustainable Energy Association (BCSEA);

•         Citizens for My Sea to Sky Society (MS2S);

•         Commercial Energy Consumers Association of British Columbia (the CEC);

•         Musqueam Indian Band;

•         Residential Consumer Intervener Association (RCIA);

•         Sentinel Energy Management Inc. (Sentinel Energy); and

•         Tsleil-Waututh Nation (TWN).

 

By Order G-62-23 dated March 23, 2023, the BCUC adjourned the proceeding, pending the filing of evidence by FEI.

 

The following interveners filed Interim Participant Assistance/Cost Award (PACA) applications with the BCUC with respect to their participation in the proceeding:

 

 

By letter dated May 8, 2023, FEI provided its comments on the Interim PACA applications of BCOAPO, BCSEA, the CEC, MS2S, RCIA, and TWN’s Interim PACA application dated February 16, 2023. Generally, FEI notes that there is a wide disparity between the total amounts claimed and the associated time for each participant. With respect to TWN, FEI notes that the daily rates claimed for each of the seven legal counsel exceed the maximum daily fees set out in Attachment A of the PACA Guidelines. FEI submits that it has reviewed the noted PACA Interim applications giving consideration to these comments and if the BCUC is satisfied that the participants have met the eligibility requirements, that the funding days claimed are appropriate, and that the level of participation has met with the BCUC’s criteria and requirements, then FEI has no further comment.

 

By letters dated June 12 and July 24, 2023, FEI provided the same comments regarding Sentinel Energy’s Interim PACA application, and TWN’s additional Interim PACA application dated June 7, 2023:

if the BCUC is satisfied that the participant has met the eligibility requirements, that the funding days claimed are appropriate, and that the level of participation has met with the BCUC’s criteria and requirements, then FEI has no further comment.

1.1              Outline of Reasons for Decision

The Panel has reviewed the Interim PACA applications in accordance with the PACA Guidelines attached to Order G-97-17 (Guidelines).

 

In section 2 of these reasons, the Panel outlines its determination regarding the participants’ eligibility for interim funding. In the remaining sections, the Panel provides an explanation for the adjustments made to the interim funding awards sought by the CEC, Sentinel Energy, and TWN respectively.

2.0              Eligibility for Interim Funding

With respect to eligibility for interim funding, section 5.1 of the PACA Guidelines states:

Participants must make an application for interim funding to the Commission. The Commission will consider eligibility and amount for interim funding applications by applying Sections 3.0 and 4.0. In addition, the Commission must be satisfied that: (a) the participant has demonstrated a need for financial assistance; and (b) the proceeding is lengthy.

Pursuant to section 5.5, the BCUC may make determinations on whether interim funding:

(a) constitutes a final award for costs already incurred; or

(b) constitutes an advance against the final cost award determination after the conclusion of the proceeding.

 

Panel Determination

The Panel determines that all applicants are eligible for interim funding, and the funding awards will constitute a final award for costs already incurred.

 

The Panel observes that considerable time has passed since FEI filed the Application in December 2020. Although the proceeding has been adjourned rather than completed, we consider it reasonable for interveners to be reimbursed for costs incurred to date given the lengthy proceeding so far and uncertain timelines for resumption of the proceeding. Further, such costs should constitute a final award in consideration of participants’ contributions to the proceeding up to the point of adjournment.

3.0              The CEC

CEC’s Interim PACA application of $142,861.60 comprises of:

•         A combined 23.35 funding days for its legal counsel C. Weafer and P. Weafer; and

•         A combined 40 funding days for its consultants D. Craig and J. Rhodes.

 

Panel Determination

The Panel determines that CEC’s interim funding award be adjusted to align with the amount of funding requested by BCOAPO in this proceeding, and accordingly the CEC is awarded $75,298.93.

 

In making its determination, the Panel relies upon the following provisions in section 4.3 of the Guidelines:

•         Has the participant contributed to a better understanding by the BCUC of the issues in the proceeding?

•         To what degree will the participant be affected by the outcome of the proceeding?

•         Are the costs incurred by the participant fair and reasonable?

 

Additionally, we note section 7.1 of the Guidelines states:

•         The Commission expects participants to use professional services in a cost-effective manner and to make efforts to avoid duplication of services among legal counsel, consultants, specialists, expert witnesses and case managers. The Commission may adjust cost awards where any duplication appears to have occurred. [Emphasis added]

 

Overall, the Panel views CEC’s funding request as excessive and disproportionate to its contribution to the proceeding. We are concerned that the CEC has failed to use its professional services in a cost-effective manner, which is reflected in the high amount of funding days and total cost award for both its legal counsel and consultants when compared against other interveners in this proceeding.

 

The Panel agrees with FEI’s observation that there is a wide disparity between the participants with respect to the total amounts claimed and the associated time. Other than TWN, the costs sought by the CEC are approximately 43 percent higher than the next highest intervener (RCIA). However, the Panel finds TWN and RCIA are not fair comparisons to the CEC. Both TWN and RCIA delivered intervener evidence and responded to IRs on same, and it is fair and reasonable to expect that participation in additional procedural steps would incur higher costs. Additionally, TWN and RCIA addressed unique perspectives and issues in depth, e.g. in the case of TWN, consultation and confidentiality of Traditional Knowledge; and in the case of RCIA, the implications of and responses to zero-pressure events. The Panel considers these contributions were material, and therefore we conclude both TWN and RCIA contributed to a better understanding of issues in the proceeding to a greater extent than did CEC. Finally, we find no evidence that the CEC may be affected by the outcome of this proceeding to a greater degree such as to warrant higher or similar costs to TWN and RCIA.

 

Accordingly, the Panel considers other interveners besides TWN and RCIA in order to determine a fair and reasonable cost award for the CEC, and finds that CEC’s participation and contribution to a better understanding of issues in the proceeding was relatively similar to BCOAPO, whose funding application is the next highest. We also note that BCOAPO utilized legal counsel and consultants with a similar experience profile to that of the CEC. On this basis, the Panel determines it is fair and reasonable to adjust CEC’s funding award to align with the costs sought by BCOAPO.

4.0              Sentinel Energy

Sentinel Energy’s Interim PACA application comprises the following:

•         1.575 funding days for its legal counsel C. Bois at a daily rate of $4,000;

•         25 funding days for J. Langley at the specialist rate of $2,150; and

•         $45.34 for courier delivery for legal counsel.

 

Panel Determination

The Panel determines Sentinel Energy’s interim funding award should be adjusted downwards and that a funding award of $46,748.29 is reasonable. The adjustment is based on three factors outlined in turn below.

 

Firstly, the daily rate of $4,000 exceeds the maximum daily rate of $2,800 for legal counsel with 12+ years of experience outlined in Attachment A of the Guidelines. The Panel finds it is fair and reasonable for the daily rate for legal counsel to be capped at the maximum fees outlined in Attachment A, and accordingly, Sentinel Energy’s award for legal counsel is adjusted to $4,939.20.[3]

 

Secondly, Sentinel Energy’s timesheets for J. Langley include 3 funding days associated with “Referenced Studies” and 0.5 days associated with “Billing.” The Panel finds it is not reasonable to award funding associated with these tasks. The “Referenced Studies” detailed in the timesheet appear to have only tangential relevance to the key issues in this proceeding. Further, Sentinel Energy did not file these studies in evidence, and therefore the Panel concludes that performance of these tasks did not contribute to a better understanding by the BCUC of issues in the proceeding, and the associated 3 funding days should be disallowed. Furthermore, the Panel does not consider it appropriate for FEI’s ratepayers to have to fund what appears to be research to further the training of Sentinel Energy’s consultant.

With respect to billing, the BCUC has previously stated that the intent of the Guidelines is that the BCUC will consider compensating a participant’s efforts directly related to the proceeding, such as preparation of information requests, final arguments, and letters of comment. The BCUC has previously disallowed funding associated with billing related activities.[4] The Panel therefore determines that disallowing the 0.5 funding days associated with billing is warranted. Accordingly, the Panel reduces the total funding days for J. Langley from 25 days to 21.5 days.

 

Thirdly, the 7.6 of the Guidelines states, “Specialists are expected to provide services related to their specialized technical expertise and may be paid in accordance with the maximum daily fee in Attachment A.” [Emphasis added] The Panel has reviewed the experience of J. Langley, and determines that while the experience is relevant, it is not sufficiently specialized in the context of the key technical issues in this proceeding. Accordingly, the Panel adjusts the rate to align with the maximum daily fee of $1,850 outlined in Attachment A for a consultant with 7+ years of experience.

 

Taken together, the adjustments for J. Langley result in a funding award of $41,763.75.[5] Therefore, Sentinel Energy’s total cost award is $46,748.29.[6]

5.0              TWN

TWN filed two separate Interim PACA applications for legal counsel (February 15, 2023) and Traditional Knowledge Experts (June 7, 2023) respectively, consisting of:

•         47 funding days charged by seven legal counsel, for a total of $147,473.50; and

•         26.6 funding days for Traditional Knowledge Experts G. George and E. George, for a total of $47,133.00.

By Order F-29-21 dated October 14, 2021, the BCUC determined that TWN was awarded $33,469.00 in interim funding as an advance against the BCUC’s final cost award determination after the conclusion of the proceeding. Therefore, TWN is seeking a total funding award of $161,137.50.[7]

 

By letter dated May 15, 2023, TWN filed a response to FEI’s letter dated May 8, 2023. TWN states it provided its legal counsel’s hourly rates and identified what those equivalent rates would amount to for 8 hours of work, recognizing that TWN’s legal counsel’s hourly rates exceeded the daily fees outline in Attachment A of the Guidelines. This was done to ensure full transparency and ensure consistency with the invoices provided as well as to show to the BCUC the actual incurred costs to TWN to participate in the proceeding. The daily fees outline in Attachment A does not cover Tsleil-Waututh’s incurred fees for their preferred legal counsel.

 

TWN submits its filings were complex and required specific legal counsel. The legal fees TWN is seeking, while exceeding daily fees outline in Attachment A of the Guidelines, represent the complex legal arguments TWN brought forward, as well as the unique and important role that TWN had in the proceedings. TWN understands that the BCUC may be required to use the daily fees outline in Attachment A, which would result in adjusted total legal fees of $103,075 based on the table below:

Panel Determination

The Panel determines that TWN’s interim funding award should be adjusted downwards and that a funding award of $115,702 is reasonable.

 

As outlined in the table below, the daily rates for each of TWN’s seven legal counsel exceed the maximum daily fees outlined in Attachment A of the Guidelines:

 

Lawyer	Years Since Call	Daily Rate in PACA Application	Maximum Fees in PACA Guidelines
J. Walker	12+	$4000 (2021) $4200 (2022)	$2800
S. Remedios	5-7	$3040 (2021) $3400 (2022)	$2250
J. Ardanaz	0-4	$2640 (2021) $2800 (2022)	$1900
K. McKerracher	Student	$2320	$850
L. Lubke	0-4	$2640	$1900
CJ. Pollock	0-4	$2320	$1900
KJ. Curry	Student	$2320	$850

 

As previously outlined in these reasons for decision, the Panel finds it is fair and reasonable for legal counsel daily rates to be capped at the maximum fees outlined in Attachment A of the Guidelines. TWN acknowledged this outcome in its letter dated May 15, 2023, and calculated adjusted total legal fees of $103,075 based on the rates in Attachment A. The Panel notes an arithmetic error in the table provided by TWN and that the sum of the adjusted legal fees for the seven counsel equates to $102,038, and accordingly the Panel awards TWN $102,038 for legal counsel fees.

 

With respect to TWN’s funding request for Traditional Knowledge Experts, the Panel notes the Guidelines do not provide funding caps or further guidance on the daily rates that may be awarded. Section 11 of the Guidelines states:

11.1 Funding is available for Aboriginal peoples to participate in Commission proceedings for relevant matters regarding section 35 of the Constitution Act, 1982. This funding may be available for community consultations and for roles specific to Aboriginal peoples such as Traditional Knowledge Experts and Elders.
11.2 In determining a cost award, the Commission may take into consideration any capacity funding received by the Aboriginal peoples.

The Panel considers the funding request for TWN’s Traditional Knowledge Experts to be reasonable. However, we note that in future, the BCUC and applicants may benefit from further clarity about the funding that may be awarded to Indigenous peoples and groups under the Guidelines as well as the new provisions governing Participant Cost Awards under the recently revised BCUC’s Rules of Practice and Procedure. The Panel recommends that the BCUC review the appropriate sections of the Guidelines and the new Participant Cost Award Rules for possible changes to same.

 

Additionally, the Panel notes that TWN’s Interim PACA application for Traditional Knowledge Experts included certain costs incurred after the filing of arguments and the BCUC’s Decision and Order G-62-23. In response to questions from BCUC staff, by letter dated July 11, 2023, TWN noted that such costs were incurred due to reviews and discussions regarding FEI’s Reply Argument and Decision and Order G-62-23, including discussions and deliberations with TWN leadership regarding next steps in preparation for BCUC’s final decision and strategizing after the decision. Taking into account the explanation provided by TWN, the Panel finds that such costs are reasonable in this instance, but notes that generally, funding awards may not be provided for tasks incurred after arguments or the issuance of a decision.

 

In summary, taking into account the adjustments to legal fees and interim PACA funding already awarded to TWN, the Panel awards $115,702 to TWN.[8]