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BCUC Recommends Regulatory Exemption for Utilities Fully Owned and Operated by Local Government Corporations

Press Release

VANCOUVER – Today, the British Columbia Utilities Commission (BCUC) released its Final Report for Stage 1 of the Inquiry into the Regulation of Municipal Energy Utilities (Municipal Inquiry). In its Final Report, the BCUC recommended a partial exemption from the BCUC’s regulatory oversight be granted to Local Government Corporations (LGCs) that are fully owned and operated by a local government, if they provide energy utility services within that government’s boundaries.

The ways local governments offer energy services are constantly changing as they strive to achieve environmental and economic benefits for their communities. Through the Inquiry, the BCUC sought clarity on what types of energy utilities, affiliated with municipalities and regional districts (local governments), are captured under the Municipal Exclusion outlined in Section 1 of the Utilities Commission Act (UCA).

Stage 1 of the BCUC’s Municipal Inquiry focused solely on whether an LGC, wholly owned and operated by a local government and providing energy utility services exclusively within the boundaries of that local government, meets the Municipal Exclusion and, if not, whether they should be regulated under the UCA. It included participation from 25 registered interveners, 31 interested parties, and the BCUC also received 9 letters of comment from local governments and the public.

In its Stage 1 Final Report, the BCUC determined that the Municipal Exclusion only applies to a municipality or regional district providing services within its own boundaries, not an LGC that is wholly owned and operated by a local government. However, the BCUC recommended that the BC government approve an exemption from certain sections of the UCA for these LGCs. This is partly due to the fact that these types of LGCs serve customers who are also voters, and as such, they are held accountable through the local government frameworks and democratic processes. The recommended exemption does not include specific sections of the UCA, which allows the BCUC to investigate complaints that may be brought forward by customers.

This recommendation is currently with the Minister responsible for the administration of the Hydro and Power Authority Act.

The BCUC will now move to Stage 2 of the Municipal Inquiry to address the regulatory considerations for other variations of utilities affiliated with local governments, including but not limited to LGCs that are partly owned by a municipality or regional district.

To read the summary of the Stage 1 Final Report, please visit this link. For more information about the Stage 2 Municipal Inquiry, please visit the proceeding page here.

Background

The BCUC launched the Municipal Inquiry in August 2019. The proceeding was adjourned temporarily during the COVID-19 pandemic and resumed after the BC state of emergency was lifted on June 30, 2021.

The BCUC established a two-stage approach to this Inquiry:

  • Stage 1 focused solely on whether an LGC, wholly owned and operated by a local government and providing energy utility services exclusively within the boundaries of that local government, meets the Municipal Exclusion and, if not, whether they should be regulated under the UCA.
  • Stage 2 will address the regulatory considerations for other variations of utilities affiliated to municipalities and regional districts to provide clarity to stakeholders as to whether these various utilities are captured by the Municipal Exclusion, and if not, to explore how such utilities ought to be regulated by the BCUC.

Upon completion of Stage 2, the BCUC will consider if it is appropriate or necessary to:

  1. seek advance approval from the BC government to offer a class of persons exemption to municipalities and regional district energy systems in certain circumstances; and/or
  2. make a recommendation to the BC government to review the definition of a “public utility” within the UCA as it relates to such entities.

Section 1 of the UCA states, in part, that a “public utility” does not include “a municipality or regional district in respect of services provided by the municipality or regional district within its own boundaries” (Municipal Exclusion), thus providing an exclusion from regulation for these entities.

About the BCUC

The BCUC is an independent regulatory body, responsible for regulating BC’s public utilities, as well as its compulsory automobile insurance rates, and intra-and provincial pipelines rates. The BCUC is also responsible for administering BC’s Fuel Price Transparency Act. It is the BCUC’s role to balance the interests of customers with the interests of the businesses it regulates. The BCUC carries out fair and transparent reviews of matters within its jurisdiction and considers public input where public interest is impacted.

CONTACT INFORMATION

Krissy Van Loon

Manager, Communications

Phone: 604.660.4727

Email: [email protected]

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