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ORDER NUMBER G-52-24

IN THE MATTER OF the Utilities Commission Act, RSBC 1996, Chapter 473

and British Columbia Utilities Commission Public Utility Safety Guidelines

BEFORE: M. Jaccard, Commissioner

WHEREAS:

on February 28, 2024 ORDER

A. On September 23, 2020, the British Columbia Utilities Commission (BCUC) established an inquiry to examine the role of the BCUC in the regulation of safety (Inquiry);

B. On December 22, 2022, the BCUC issued Decision and Order G-381-22 and the final Stage 1 report (Final Report) in the Inquiry;

C. In the Final Report, among other things, the BCUC set out a framework of key principles to guide the BCUC in carrying out its regulation of public utility safety;

D. By letter dated July 5, 2023, the BCUC requested, among other things, that all public utilities subject to the BCUC’s safety jurisdiction provide a comprehensive listing of historical material safety matters and inform the BCUC of any future material safety matters as soon as practicable (July 5 th Letter);

E. By Order G-318-23, dated November 20, 2023, the BCUC established a comment process regarding the proposed BCUC Draft Public Utility Safety Guidelines (Draft Guidelines) and invited public utilities to submit letters of comment on the Draft Guidelines; and

F. The BCUC has reviewed the letters of comment received and considers that the following determinations are warranted.

NOW THEREFORE for the reasons provided in the decision issued concurrently with this order, the BCUC orders the following:

1. The BCUC Public Utility Safety Guidelines (Safety Guidelines), attached as Attachment 1 to the decision, are made final and are effective immediately. The Safety Guidelines supersede and replace the reporting requirements set out in the July 5 th Letter.

Final Order with Reasons

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Order G-52-24

2. Public utilities subject to the BCUC’s safety jurisdiction, as described in the Safety Guidelines, are directed to file the annual safety declaration form, attached as Schedule 1 to the Safety Guidelines, and all supporting documents annually, by no later than four months following their fiscal year-end.

DATED at the City of Vancouver, in the Province of British Columbia, this 28 th BY ORDER Original signed by: M. Jaccard Commissioner

day of February 2024.

Attachment

Final Order with Reasons

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1.0 2.0

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British Columbia Utilities Commission Public Utility Safety Guidelines

REASONS FOR DECISION

Table of Contents

APPENDIX A to Order G-52-24

Page no.

Introduction ......................................................................................................................................... 2 Final Safety Guidelines .......................................................................................................................... 2 2.1 Annual Safety Declaration ............................................................................................................... 3 2.2 Potential Duplication of Reporting Requirements .......................................................................... 5 2.3 Applicability to Thermal Energy Systems (TES) ............................................................................... 6 2.4 Confidentiality ................................................................................................................................. 6 2.5 Request for Additional Details and Guidance ................................................................................. 7 Implementation .................................................................................................................................... 8

APPENDICES ATTACHMENT 1 Final BCUC Public Utility Safety Guidelines ATTACHMENT 2 Final BCUC Public Utility Safety Guidelines – Blackline

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APPENDIX A to Order G-52-24

1.0 Introduction On December 22, 2022, the British Columbia Utilities Commission (BCUC) completed Stage 1 of its inquiry into the regulation of public utility safety (Inquiry). 1 In the final Stage 1 report (Final Report), the BCUC established principles to guide the BCUC in carrying out its safety oversight. These guiding principles include:

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The BCUC should (i) refrain from actively regulating public utility safety in areas where it is satisfied that another regulatory body is providing adequate safety oversight; and (ii) avoid duplication by collaborating with other regulators to leverage information, knowledge, and expertise when carrying out its safety-related mandate;

The BCUC should ensure that any operational gaps that emerge in the regulation of public utility safety are filled;

The BCUC should not recommend an exemption for a public utility from its safety oversight without explicitly considering whether an exemption from safety regulation is in the public interest;

The BCUC should take active steps to keep itself informed regarding the safety of public utilities; and The BCUC should continue to consider relevant aspects of public utility safety in all its adjudications, including when determining whether an application is in the public interest and whether rates are just and reasonable. 2

In lieu of a previously contemplated Stage 2 of the Inquiry exploring the application of these guiding principles, the BCUC directed BCUC staff to prepare a set of proposed safety guidelines for the BCUC’s consideration. 3

On November 20, 2023, the BCUC issued a set of proposed public utility safety guidelines (Draft Guidelines), including an annual safety declaration form (Annual Declaration) and invited public utilities to file comments. Written comments were received from:

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FortisBC Energy Inc. (FEI), FortisBC Inc. (FBC), and FortisBC Alternative Energy Services Inc. (FAES) (collectively FortisBC);

Corix Multi-Utility Services Inc. (Corix); River District Energy (RDE); British Columbia Hydro and Power Authority (BC Hydro); and Pacific Northern Gas Ltd. and Pacific Northern Gas (N.E.) Ltd. (collectively, PNG).

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2.0 Final Safety Guidelines Having considered public utility submissions on the Draft Guidelines, the Panel approves the final version of the BCUC Public Utility Safety Guidelines, included as Attachment 1 to this decision (Safety Guidelines). With the exception of the areas discussed in the following sections, parties were supportive of, or provided no substantive comments on, the language proposed in the Draft Guidelines and the Panel adopts the proposed language as final. All differences between the Draft Guidelines and the Safety Guidelines are shown in the blacklined version included as Attachment 2 to this decision.

1 2 3 4

Order G-381-22 dated December 22, 2022. Order G-381-22 dated December 22, 2022, Appendix A, p. 10. Order G-64-23 dated March 28, 2023. Order G-318-23 dated November 20, 2023.

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APPENDIX A to Order G-52-24

2.1 Annual Safety Declaration Public Utility Comments Public utilities provided several recommendations regarding the specific language used in the draft Annual Declaration contained in the Draft Guidelines.

Firstly, the draft Annual Declaration proposed the following attestation by the public utility: “The public utility operated and maintained its property and equipment in a condition to enable it to provide service that is ‘adequate, safe, efficient, just and reasonable’ in accordance with section 38 of the UCA [Utilities Commission Act]”. 5

BC Hydro submits that the proposed language may be too absolute and could benefit from wording that recognizes that the attestation is being provided based on due diligence. 6 In support of its position, BC Hydro refers to the Final Report's findings and guidance that: 7

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section 38 of the UCA is not prescriptive about what the BCUC considers to be “…in all respects adequate, safe, efficient, just and reasonable” maintenance and operation of a utility’s equipment and property;

what the BCUC considers to be safe service should be informed by the statutory regime of and standards set by other regulators; and

how the BCUC ensures ongoing compliance with safety standards and requirements, particularly those imposed by other agencies, may vary with specific circumstances.

BC Hydro recommends the attestation be revised as follows: The public utility exercised due diligence in operating and maintaining its property and equipment to provide service that the public utility considers to be “adequate, safe, efficient, just and reasonable” in accordance with section 38 of the UCA and standards set by other regulators. 8

BC Hydro also suggests that the draft Annual Declaration be revised to replace current references to “material investigations” by other regulators with “investigations into material safety incidents” to improve alignment between the declaration and the materiality threshold set out in the Draft Guidelines. 9

In its comments, Corix requests clarification regarding the signatory of the Annual Declaration, questioning whether the “Authorized Signing Officer” should be an officially appointed officer of the utility or any employee the level of manager or above with sufficient signing authority and knowledge of the public utility’s safety management program and safety records. 10

5 Order G-318-23 dated November 20, 2023, Appendix B, Draft Guidelines, Appendix A, draft Annual Declaration, p. 1. 6 Exhibit C4-1, p. 2. 7 Exhibit C4-1, p, 2; see also Order G-381-22, Final Report, p. 8. 8 Exhibit C4-1, p. 3. 9 Exhibit C4-1, p. 3. 10

Exhibit C2-1, p. 2.

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APPENDIX A to Order G-52-24

Further, Corix recommends that the last sentence of the Authorized Signing Officer attestation, which in the Draft Guidelines read “I have read and understand the Utilities Commission Act”, be revised to focus on the sections of the UCA that are relevant to safety to limit the potential for ambiguity or misunderstanding by the signing officer. 11

Finally, PNG considers that there is a misalignment between the definitions of material safety matters and incidents as the terms are used in the Draft Guidelines and the Annual Declaration. Specifically, PNG notes that the Safety Reporting Requirements section of the Draft Guidelines states: 12

Public utilities are expected to use reasonable discretion in determining what constitutes a “material” safety matter. Generally, the BCUC expects that material safety matters would be of a magnitude that would attract the significant interest of the public of British Columbia.

In PNG’s view, this statement is at odds with the more granular reporting requirements contained in the draft Annual Declaration, such as the attestation that “[t]here were no material safety incidents that occurred to or on plant, equipment or other property of the public utility that endangered the safety, health or property of any person.” PNG recommends that the additional detail contained in the draft Annual Declaration be removed to maintain the flexibility for public utilities set out in the Draft Guidelines. 13

Panel Determination Regarding BC Hydro's submissions, the Panel finds that a revision to the first attestation in the Annual Declaration to reflect a standard of due diligence by the public utility is warranted. Section 38 of the UCA speaks to the service standard public utilities are to be held to by the BCUC, and as such it is preferable to include language in the attestation that speaks to reasonable steps taken by the utility to ensure compliance with the BCUC’s expectations, rather than language that implies a conclusive final determination of compliance by the public utility.

However, the Panel is not persuaded that the further edits proposed by BC Hydro to this attestation are required. As noted by BC Hydro, in the Final Report, the BCUC found that what the BCUC considers to be safe service should be informed by the statutory regime of and standards set by other regulators. As such, aligning the language in the attestation with the language of section 38 of the UCA is sufficient to reflect the importance of public utility compliance with the standards set by other regulators. Accordingly, the approved wording of the attestation reads as follows:

The public utility exercised due diligence in operating and maintaining its property and equipment in a condition to enable it to provide service that is “adequate, safe, efficient, just and reasonable” in accordance with section 38 of the UCA.

The Panel also finds that the phrase “investigations into material safety incidents” recommended by BC Hydro would provide greater clarity as to the nature of safety investigations public utilities are obligated to report on in the Annual Declaration, and that use of this phrase would improve alignment between the Safety Guidelines and the Annual Declaration. As such, references to “material investigations” are replaced with “investigations into material safety incidents” in the final declaration.

In response to Corix's questions regarding the signatory of the Annual Declaration, the Panel’s expectation is that the signatory would be an authorized company representative who occupies a senior position within the

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Exhibit C2-1, p. 2. Exhibit C5-1, p. 2. Exhibit C5-1, p. 2.

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APPENDIX A to Order G-52-24

public utility with accountability for public utility safety. A revision to the Annual Declaration section of the Safety Guidelines to clarify this expectation is warranted. Further, the Panel sees merit in focusing the final attestation in the Annual Declaration on the safety-related provisions of the UCA as recommended by Corix, as this focus is consistent with the purpose of the declaration and would limit the potential for regulatory burden and misunderstandings. As such, the final sentence in the Annual Declaration is revised to read: “I have read and understand the safety-related obligations set out in the Utilities Commission Act.”

Finally, the Panel does not share PNG’s view that there is a misalignment between the definition of material safety matters in the Draft Guidelines and the draft Annual Declaration. The first sentence in the Safety Reporting Requirements section of the Draft Guidelines reads, in part, that “[p]ublic utilities must file the annual safety declaration form… confirming that all material safety incidents, investigations, and penalties/fines have been reported to the BCUC.” The text that follows regarding “material safety matters” is intended to clarify the BCUC’s expectations as to how public utilities will determine what constitutes a material safety incident, investigation, and penalty/fine to be reported on. In light of the confusion surrounding the original language, the Panel finds a revision of the Draft Guidelines to clearly define the phrase “material safety matters” to be warranted. The approved language of the Safety Guidelines reads as follows:

Public utilities must file the annual safety declaration form attached as Schedule 1 (Annual Declaration), attesting to the safe operation of the public utility, and confirming that all material safety incidents, investigations into material safety incidents, and material penalties/fines (together, “material safety matters”) have been reported to the BCUC. Public utilities are expected to use reasonable discretion in determining what constitutes a material safety matter. Generally, the BCUC expects that material safety matters would be of a magnitude that would attract the significant interest of the public of British Columbia.

2.2 Potential Duplication of Reporting Requirements Public Utility Comments Corix considers that situations could occur where the same, or materially similar, information is submitted to other regulatory bodies and submits that the BCUC should collaborate with other regulators to avoid duplication of efforts. 14

RDE seeks further guidance on reporting safety incidents, safety investigations, and safety related penalties to the BCUC including how the requested summary would relate to that of similar summaries prepared for other safety regulators such as WorkSafe BC and Technical Safety BC. RDE indicates that it “wishes to see further consideration of how the BCUC’s requirements integrate with those of other safety regulators” to ensure the BCUC’s approach is complimentary to those of regulators whose primary responsibility is the regulation of safety. 15

Panel Determination The Panel sees merit in reducing the regulatory burden placed on public utilities by allowing safety-related information to be reported to the BCUC in formats already in use by public utilities due to other regulatory requirements. As such, the approved language in the Safety Guidelines has been revised to indicate that the supporting documentation attached to the Annual Declaration may be in the same format used in reports to other regulators, as appropriate.

14 15

Exhibit C2-1, pp. 2–3. Exhibit C3-1, p. 1.

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The Panel considers that this approach will allow the BCUC to keep informed of matters related to public utility safety, as required by the UCA, while recognizing the safety oversight of other regulators and avoiding unnecessary duplication of reporting effort.

2.3 Applicability to Thermal Energy Systems (TES) Public Utility Comments Corix states that BCUC’s TES Regulatory Framework Guidelines (TES Guidelines) provide a scaled regulatory framework to the regulation of TES, with increased regulatory oversight as the size and scope of the TES increases. Corix notes that only Stream B TES are fully regulated by the BCUC, while the other categories, namely Micro TES, Strata Corporation TES, and Stream A TES, are exempt from Part 3 of the UCA other than specific sections listed in the TES Guidelines. 16 Corix submits that the wording of the Draft Guidelines on applicability 17 indicates that the Draft Guidelines would apply to both Stream A and Stream B TES because Order G-121-14 only exempts Stream A TES from sections 44.1, 45-46 and 59-61 of the UCA. 18

Corix states that the inclusion of Stream A TES among the public utilities subject to the Safety Guidelines would result in an increased administrative burden on Stream A TES. 19

Corix submits that to the extent that Stream A TES safety is regulated by other organizations, Stream A TES should be exempt from the applicability of the Safety Guidelines. In addition, Corix submits that the Applicability section of the Safety Guidelines should clarify the applicability for each category of TES. 20

Panel Determination The Panel is not persuaded that a revision to the Applicability section of the Draft Guidelines is warranted. The Panel considers an approach where the Safety Guidelines are applied uniformly to all public utilities that are subject to BCUC’s safety jurisdiction, while allowing the BCUC to direct otherwise where aspects of the Safety Guidelines are found not to be necessary, to be appropriate. This approach provides clear guidance to public utilities and future BCUC panels as to the BCUC’s expectations regarding how it will regulate public utility safety, while maintaining flexibility for alternative approaches where specific circumstances warrant them. The Panel notes that BCUC’s Review of its TES Guidelines is ongoing. Should that panel determine that all or specific aspects of the Safety Guidelines are not necessary for a specific category of TES, that panel may consider issuing further directions based on the specific facts and information before it.

2.4 Confidentiality Public Utility Comments Corix notes that the Draft Guidelines do not address confidentiality and submits that the confidentiality provisions set out in the BCUC’s Rules of Practice and Procedure (Rules) “could create an administrative burden for small utilities with limited resources.” 21

16 Exhibit C2-1, p. 1. 17 The Draft Guidelines proposed that “These guidelines apply to all public utilities that are subject to the BCUC’s jurisdiction under sections 23, 25, 38, and 42 of the UCA, unless otherwise directed by the BCUC.” Order G-318-23 dated November 20, 2023, Appendix B, p. 1. 18 Exhibit C2-1, p. 1. 19 Exhibit C2-1, p. 1. 20 Exhibit C2-1, pp. 1–2. 21 Exhibit C2-1, p. 3.

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Corix argues that by default, details included in material safety incident reporting, safety investigations, and emergency reporting collected by the BCUC should be held confidentially, without the utility bearing the onus of establishing why the information should be treated as confidential for each submission. 22 Corix also notes that confidentiality submissions regarding safety matters may be challenging to operationalize as “[d]etailed reports are more difficult to review and redact than high-level reports.” 23

Corix recommends that the BCUC include a confidentiality section in the Safety Guidelines, addressing it in a manner that accounts for the uniqueness of safety issues reporting instead of relying on the Rules. Corix submits that this approach will improve regulatory efficiency for both public utilities and BCUC staff. 24

Panel Determination The Panel is not persuaded by Corix’s arguments that a default presumption of confidentiality for filings made pursuant to the Safety Guidelines is warranted.

The Panel considers that, where possible, information on material safety matters should be publicly available, as this improves transparency into the operation of BC’s public utilities as well as the BCUC’s oversight thereof. Further, contrary to Corix’s suggestion, the Panel does not consider the confidentiality processes set out in the Rules to be overly burdensome. Rule 18.01 allows public utilities to request confidential treatment when deemed necessary, and Rule 18.01(b) requires the filing of a proposed redacted version of a document subject to such a request “where possible”. This approach allows for an appropriate balancing of the costs and benefits of preparing public versions of confidential materials.

2.5 Request for Additional Details and Guidance Public Utility Comments RDE raises concerns regarding a lack of detail in the BCUC Safety Oversight section of the Draft Guidelines. RDE suggests explicitly incorporating the safety principles from the Final Report and emphasizes the need for better articulation of consistency and collaboration, ensuring BCUC interventions align with other safety regulators without hindering responses to incidents. 25

Panel Determination The Panel finds that the wording in the Draft Guidelines provides sufficient clarity on the BCUC’s expectations regarding safety oversight. While RDE suggests explicit inclusion of safety principles from the Final Report, the Panel is confident that the current framework adequately describes the BCUC’s responsibilities in this regard. The guiding principles from the Final Report have informed the development of the Safety Guidelines, as intended, and remain available in BCUC Order G-381-22 and the associated documents. Further, as the specific facts and circumstances of a public utility will be essential to determining whether inspections or safety-related proceedings are required, the benefits of providing additional specificity in the Safety Guidelines on this matter are outweighed by the potential for hampering necessary BCUC discretion and flexibility in this regard.

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Exhibit C2-1, p. 3. Exhibit C2-1, p. 3. Exhibit C2-1, p. 3. Exhibit C3-1, p. 1.

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APPENDIX A to Order G-52-24

3.0 Implementation Having finalized the language of the Safety Guidelines and the associated Annual Declaration, the Panel finds that implementing the Safety Guidelines, effective immediately, is appropriate to support the BCUC in effectively and efficiently carrying out its regulation of public utility safety.

The Panel recognizes that in advance of the preparation of these guidelines, on July 5, 2023, the BCUC issued a letter (July 5 th Letter) to public utilities requesting, among other things, that public utilities subject to the BCUC’s safety jurisdiction provide a comprehensive listing of historical material safety matters to the BCUC and inform the BCUC of any future material safety matters as soon as practicable. For clarity, the final Safety Guidelines supersede and replace the safety-related reporting requirements set out in the July 5 th Letter.

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