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ORDER NUMBER G-292-24
IN THE MATTER OF the Utilities Commission Act, RSBC 1996, Chapter 473
and Wyse Meter Solutions Inc. Application Under Section 53 of the Utilities Commission Act
BEFORE: E. A. Brown, Panel Chair B. A. Magnan, Commissioner
WHEREAS:
on November 12, 2024 ORDER
A. On September 9, 2024, Wyse Meter Solutions Inc. (Wyse) filed an application with the British Columbia Utilities Commission (BCUC), seeking approval under section 53 of the Utilities Commission Act (UCA) for the of Wyse (Application). Wyse also requested, pursuant to section 53(5) of the UCA, that the BCUC provide a report to the Lieutenant Governor in Council confirming that the would be beneficial in the public interest;
B. By Order G-257-24 dated October 4, 2024, the BCUC established a regulatory timetable for the review of the Application, which included public notice requirements, one round of BCUC information requests to Wyse, and Wyse’s final argument. The order also approved Wyse’s request to hold the unredacted version of the Application confidential until otherwise determined by the BCUC;
C. During the course of the proceeding, Wyse filed documents with the BCUC for which it requests the unredacted versions be held confidential due to their commercially sensitive nature, that if released could reasonably be expected to result in undue financial harm or prejudice to the competitive or negotiating position of Wyse in the market for submetering services; and
D. The BCUC has reviewed the Application, evidence and argument filed in the proceeding and makes the following determinations.
Final Order
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Order G-292-24 NOW THEREFORE pursuant to sections 53 and 54 of the UCA and for the reasons outlined in the decision accompanying this order, the BCUC orders as follows:
1. The transactions in the this order are approved.
set out in Section 3.1 of the decision accompanying
2. The BCUC determines that the , as set forth in the Application, is beneficial in the public interest and therefore submits the decision accompanying this order as its report to the Lieutenant Governor in Council confirming that determination.
3. Wyse’s request to hold confidential certain information filed confidentially during the course of the proceeding is approved unless otherwise determined by the BCUC.
DATED at the City of Vancouver, in the Province of British Columbia, this 12 BY ORDER Original signed by: E. A. Brown Commissioner
Final Order
th day of November 2024.
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1.0
2.0 3.0
Wyse Meter Solutions Inc. Application Under Section 53 of the Utilities Commission Act
DECISION
Table of Contents Page no. Introduction .......................................................................................................................................1
1.1 Background and Regulatory Process .............................................................................................. 1 ...........................................................................................................1 Panel Determination and Findings .......................................................................................................4 3.1 June Transactions and Reviewable Interest Determination ........................................................... 4 3.2 Determination ........................................................................................................ 5
Order G-292-24
1.0 Introduction On September 9, 2024, Wyse Meter Solutions Inc. (Wyse) filed an application with the British Columbia Utilities Commission (BCUC), seeking approval under section 53 of the Utilities Commission Act (UCA) in connection with the , which includes of entities (Application). Wyse requests, pursuant to section 53(5) of the UCA, a BCUC report to the Lieutenant Governor in Council (LGIC) with an opinion that the would be beneficial to the public interest and in turn should receive consent from the LGIC. 1
In June 2024, Wyse undertook steps to partially complete the . The final step in the involves the of a public utility, Wyse, , which requires the consent of the LGIC pursuant to section 53 of the UCA.
This decision consists of an overview of the in Section 2.0 followed by the Panel’s final determinations and findings on the Application in Section 3.0, including the Panel’s findings on the in Subsection 3.2.
1.1 Background and Regulatory Process Wyse is a submetering company serving approximately end-use customers across Canada, located in British Columbia (BC). The company is primarily based in eastern Canada and began operating in BC in 2018. 2
Wyse filed the unredacted version of the Application on a confidential basis, with a request for all related correspondence to remain confidential as well, on the basis that these documents contain commercially sensitive information that could cause undue financial harm or negatively impact its competitive and negotiating position in the submetering services market. 3
On October 4, 2024, by Order G-257-24, the BCUC established a regulatory timetable to review the Application. The regulatory timetable included public notice and one round of information requests from the BCUC followed by an opportunity for Wyse to file its final argument. The BCUC also granted confidential treatment for the unredacted version of the Application until otherwise determined by the BCUC.
2.0 In June 2024, Wyse undertook steps to partially complete the (June Transactions) by its lead shareholder, . 4 The following chart shows Wyse’s organizational structure prior to the June Transactions. 5
1 2 3 4 5
Exhibit B-1, p. 1. Exhibit B-1, p. 1. Exhibit B-2. Exhibit B-1, p. 1. Prepared by BCUC staff based on the information provided in Exhibit B-5-1, BCUC Information Request (IR) 1.1.
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Figure 1: Wyse’s organizational structure prior to the June Transactions
As a result of various tax considerations, the June Transactions
. Wyse states that are holding companies without significant assets, liabilities, or operations. Wyse also states that the June Transactions did not result in any significant changes to Wyse's management or day-to-day operations. 6 As shown in the following chart, following the June Transactions, Wyse’s indirect lead investor, did not change 7 .
Figure 2: Wyse’s organization structure after the June Transactions
Wyse states that the changes affected by the June Transactions are at the shareholder level and above for Wyse and will not result in any changes or disruptions to the business, day-to-day operations or management of the utility. 8
The final step in the Meter Solutions Inc.
6 7 8
entails the . After the
Exhibit B-1, p. 1, Exhibit B-5-1, BCUC IR 1.4. Exhibit B-1, p. 2, Exhibit B-5-1, BCUC IR 1.2.1. Exhibit B-5-1, BCUCU IR 1.5.
Order G-292-24
resulting in a Wyse will maintain the same management team and
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board of directors that were in place at Wyse prior to the is approved is shown below: 10
.
9
The organizational chart if the
Figure 3: Wyse’s organization structure after the
Wyse states the will provide economic and other benefits that are in the public interest to its customers. This is because it will enhance administrative efficiency by simplifying the corporate structure, leading to fewer financial statements and reports, reduced annual filings and/or returns with relevant ministries, and lower costs and improved regulatory efficiency. Additionally, Wyse explains that the supports the tax efficiency considerations of the because the June Transactions established the framework under which Wyse’s existing investors could continue their investment in the entity in a tax efficient manner. The concludes the which, according to Wyse, will enable Wyse to continue obtaining capital at a low cost and maintain greater rate stability. 11
Subject to the approval of the Application, Wyse anticipates completing the on . Wyse explains that the completion date is not expected to impact the public interest benefits of the , other than potentially impacting the tax efficiency considerations. 12
In addition to the public interest benefits, Wyse confirms that there will be no adverse impacts to the following items as a result of the , which includes the : 13
i) Wyse’s ability to raise equity and debt financing; ii) Wyse’s existing financial covenants; iii) Wyse’s conduct of business, including its level of service; iv) Wyse’s compliance with applicable enactments and regulations with respect to the ; v) The structural integrity or maintenance and operation of Wyse’s assets; and vi) Wyse’s agreements with building owners in relation to the provision of submetering services. During the proceeding, Wyse was asked to address whether the June Transactions resulted in any changes in the “reviewable interests” of Wyse under section 54 of the UCA. Wyse considers that there were no changes in reviewable interests because prior to the June Transactions, the only person considered to have a reviewable interest is , and afterwards, only and its “associates” as defined in the UCA have a reviewable
9 Exhibit B-1, p. 2. 10
11 12 13
Exhibit B-5-1, BCUC IR 2.2.1. Exhibit B-5-1, BUCU IR 2.2.1. Exhibit B-5-1, BCUC IR 2.3. Exhibit B-5-1, BCUC IR 2.4.
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interest in Wyse. Considering the lack of adverse impact of the June Transactions on Wyse and its customers, along with the timing of specific regulatory and compliance requirements and tax implications, Wyse explains that BCUC approval was not sought for the June Transactions. In addition, Wyse confirms that it had engaged local counsel in BC to investigate and consider the implications of the , including the applicable provisions of the UCA. After consultation among Wyse and its counsel in BC and Ontario, it concluded that BCUC approval would only be required for the . 14
3.0 Panel Determination and Findings As shown in the organizational charts above, the June Transactions resulted in changes in the of Wyse. Section 54 of the UCA addresses “reviewable interests” in a public utility and prohibits changes in the acquisition or control of the shares of a public utility unless BCUC approval has been obtained. Since the can only occur after the June Transactions, the Panel must first address whether there have been any changes in the reviewable interests of Wyse before addressing the .
3.1 June Transactions and Reviewable Interest Determination In reviewing the June Transactions, the Panel considers the following sections of the UCA as applicable: • Section 54(4), which states that a person has a “reviewable interest” in a public utility if (a) the person owns or controls, or (b) the person and the person’s associates own or control, in aggregate more than 20 percent of the voting shares outstanding of any class of shares of the utility;
•
•
•
•
Section 54(5)(a) and (c), which state that a public utility must not issue, sell, purchase or register on its books a transfer of shares in the capital of the utility without the approval of the BCUC if it could cause any person to have a reviewable interest;
Section 54(7), which states that a person must not acquire or acquire control of such numbers of any class of shares of a public utility that would cause the person, as (a) in themselves or (b) together with shares already owned or controlled by the person and the person's associates, to have a reviewable interest in a public utility unless BCUC approval has been obtained;
Section 54(8), which states that a person with an existing reviewable interest in a public utility and any associate of that person must not acquire or acquire control of any voting shares in the public utility unless the person or associate has obtained the BCUC’s approval if the acquisition or acquisition of control increases the percentage of voting shares held, owned or controlled by the person or by the person and their associates; and
Section 54(9), which states that the BCUC may give approval under section 54 of the UCA subject to conditions and requirements it considers necessary or desirable in the public interest. However, the BCUC must not give approval unless it considers that the public utility and the users of the service of the public utility will not be detrimentally affected.
The Panel finds that the June Transactions resulted in changes in reviewable interests under sections 54(5)(a) and (c), 54(7)(a), and 54(8) of the UCA.
The Panel considers that the June Transactions resulted in having each acquired a reviewable interest in Wyse under section 54(7)(a) of the UCA. The June Transactions included the , of Wyse, as well as established . These transactions resulted in having a reviewable interest in Wyse, which it previously did not have, through its . In addition, these transactions resulted in
14 Exhibit B-5-1, BCUC IR 1.7, BCUC IR 1.8. Order G-292-24
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having a reviewable interest in Wyse, which it previously did not have, because they caused of Wyse through its .
The Panel considers that the June Transactions resulted in Wyse registering on its books to have a reviewable interest in Wyse under sections 54(5)(a) and (c) of the UCA.
The Panel considers that the June Transactions resulted in an increase to reviewable interest in Wyse under section 54(8) of the UCA. Prior to the June Transactions, was the sole shareholder with a reviewable interest in Wyse through its ownership of percent of the shares of Wyse. After the June Transactions, continues to have a reviewable interest in Wyse because it has of Wyse through its ownership of percent of the shares of .
The Panel finds that Wyse and its customers will not be detrimentally affected by the changes in reviewable interests noted above resulting from the June Transactions. The Panel is satisfied that the June Transactions will not result in any significant changes to Wyse’s management or day-to-day operations nor will they cause any adverse impact on Wyse’s ability to provide service to its customers. Further, the Panel notes that the June Transactions introduce in Wyse’s organizational structure, of which one of the companies Wyse. Given that the are holding companies without significant assets, liabilities, or operations, the Panel considers that these companies do not pose any incremental risk to Wyse or its customers. Therefore, the Panel approves:
1. Wyse’s registration on its books of the percent of the shares of Wyse.
to reflect
2. percent of the shares of Wyse. 3. percent of the shares of . 4. percent of the shares of . The Panel notes that Wyse did not request approval from the BCUC regarding the changes in reviewable interests in advance of the June Transactions. The Panel acknowledges that Wyse engaged local counsel in BC when it concluded that BCUC approval under section 54 of the UCA is not required and the Panel understands that there were certain time sensitivities regarding completing the June Transactions. However, the Panel expects Wyse, as a public utility, to allow adequate time to consider and ensure compliance with the UCA before engaging in significant transactions. For future significant transactions, the Panel encourages Wyse to engage with local legal counsel that have expertise with the UCA and with BCUC staff before advancing them.
3.2 The Panel determines that the interest.
Determination , as set forth in the Application, is beneficial in the public
As described above, the is the second stage of a two-stage . The first stage, completed with the June Transactions (discussed above), established the framework in which Wyse’s existing investors could continue their investment in the utility in a tax efficient manner. The is the second stage and concludes the . Given the connected nature of the two events, the Panel considers it appropriate to assess the benefits of the as a whole when making its findings on the .
The Panel finds that the will likely result in several public interest benefits, which include enabling Wyse to continue raising capital from its lead investor and increased administrative efficiency, as described in Section 2.0 of this decision. Further, the Panel notes that Wyse’s management and
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day-to-day operations will remain unchanged following the June Transactions and this is expected to remain the case following the and as a result, there is no expected adverse impact or risk to Wyse or its customers.
DATED at the City of Vancouver, in the Province of British Columbia, this 12
th day of November 2024.
Original signed by: _________________________________ E. A. Brown Panel Chair
Original signed by: _________________________________ B. A. Magnan Commissioner
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Wyse Meter Solutions Inc. Application Under Section 53 of the Utilities Commission Act
APPENDIX A
EXHIBIT LIST
Exhibit No.
Description
COMMISSION DOCUMENTS
A-1
A-2
A-3
A-3-1 A-4
October 4, 2024 – Panel Appointment
CONFIDENTIAL – September 25, 2024 – BCUC response to Wyse Request for Confidentiality
CONFIDENTIAL – October 4, 2024 – BCUC Order G-257-24 establishing a regulatory timetable
PUBLIC – October 4, 2024 – BCUC Order G-257-24 establishing a regulatory CONFIDENTIAL – October 4, 2024 – Confidential BCUC Information Request No. 1 to Wyse
APPLICANT DOCUMENTS B-1 CONFIDENTIAL – September 9, 2024 – WYSE METER SOLUTIONS INC. (WYSE) – Application Under Section 53 of the Utilities Commission Act
B-1-1
B-2 B-3
B-4
B-5 B-5-1
PUBLIC – September 9, 2024 – Wyse submitting redacted Application Under Section 53 of the Utilities Commission Act
CONFIDENTIAL – September 18 – Wyse submitting request for confidentiality CONFIDENTIAL – September 27 – Wyse submitting response to BCUC regarding clarification of request for confidentiality
October 9, 2024 – Wyse providing notice of application in compliance with Order G-257-24 Directives
PUBLIC - October 16, 2024 – Wyse redacted responses to BCUC Information Request No. 1 CONFIDENTIAL - October 16, 2024 – Wyse confidential responses to BCUC Information Request No. 1
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