PROVINCE OF BRITISH COLU~mIA BRITISH COLUMBIA UTILITIES COMMISSION IN THE MATTER OF the Utilities Commission Act, S.B.C. 1980, c. 60, as amended and IN THE MATTER OF an Application and an Alternative Application for an Energy Project Certificate to construct and operate Natural Gas Pipeline Transmission Facilities to and on Vancouver Island BEFORE: J.G. McIntyre, Chairman; and J.D. V. Newlands, Deputy Chairman ORO E R WHEREAS Pacific pursuant to Section 18 of the Utilities Commission Act, S.B.C. 1980, c. 60, as amended (lithe Act"), made an Application Alternative Application in December 1988, ("the Applications") for an Energy Project Certificate to the Minister of Energy, ~1ines and Petroleum Resources to construct and operate pipeline transmission facilities for the transmission of natural gas to, and on, Vancouver Island; and WHEREAS pursuant to Section 19(1)(a) of the Act the Minister of Energy, Mines and Petroleum Resources, Minister Responsible for Environment referred the Applications to the British Columbia Utilities Commission (lithe hearing within prescribed Terms of Reference dated December 20, 1988 and a ttached as Appendix A to this Order. NOW THEREFORE pursuant Commission hereby orders as follows: I=CJi-..,HiTH F:-OOR, soc SMiTHE STREET VAN:~OUVER. E.C TE ...EYHC),\E TELEX BRITiSH COlU BIA UTILITIES COMMISSION ORDER NUMBER _G_-_1_1_1-_8_8__ ) ) ) December 20, 1988 ) Coast Energy Corporation (IlPCEC"), in November 1988, and an with the concurrence of the Commission") for review at a public to Section 20 of the Act the .../2 VeZ 2E" CANADA R4P!COi\~. 120
I. A public hearing is to commence at 9:00 a.m. local time, Tuesday, January 24, 1989 in the Hearing Room at the Office of the Commission, Street, Vancouver, B.C. The Division of the Application will comprise of the following Commission members: Mr. John G. McIntyre, Chairman Mr. Norris Martin, Commissioner Mr. Frank C. Leighton, Commissioner 2. PCEC is to publish, not later than Tuesday, December 27, 1988, a Notice of Public Hearing, as per attached copy, in one issue each of Province and other properly provide adequate notice in the affected service areas of the pipeline. are to be supplemented by spot radio advertisements or community service announcements so as to provide for adequate public information in the service areas. 3. PCEC is to prepare Applications which will be filed with the Commission by January 6, 1989 and Interested Parties as they become registered with the Commission. 4. PCEC is to file with Friday, January 6, testimony and supplemental intends to rely. 5. Intervenors and Interested Parties intending to be present and participate in the public hearing should give written Notice of Intention to do so to the Commission Secretary and to the Applicant, Monday, January 9, 1989. nature of the interest in the proceeding. 6. Intervenors and Interested written submission should Commission Secretary and one copy to the Applicant, to be received not later than Wednesday, January 18, 1989. DATED~e City of Vancouver, in Columbia, this ~ ) day of December, 1988. 36I/69/cmsBRITISH COLU'~BIA UTILITIES cor'~USSION ORDER 2 NUMBER G-111-88 Fourth Floor, 800 Smithe Commission named to review the the Vancouver Sun, Vancouver local news publications as may Such newspaper advertisements an Executive Summary of the distributed to Intervenors and the Commission, not later than 1989, any additional prepared material upon which it to be received not later than Such notice should state the Parties intending to file a provide one copy to the the Province of British
s ,-: !2 ~ ("/ /).~ .....,C:> " S COt/l\'t' NOTICE OF PUBLIC HEARING THE APPLICATIONS Pacific Coast Energy Corporation ("PCEC") applied in November 1988 ("the Applica tion") and in December 1988 (lithe Alternative Application") to the Minister of Energy, Mines and Petroleum Resources for an Energy Project Certificate to construct and operate Natural Gas Pipeline Transmission Facilities to and on Vancouver Island ("the Applications"). The Applications were referred to the British Columbia Utilities Commission ("the Commission") to review the Applications; to conduct a public hearing thereon; and to submit a Report and Recommendations to the Lieutenant Governor in Council. THE PUBLIC HEARING The Commission has set down the Applications for public hearing commencing at 9:00 a.m. local time, Tuesday, January 24, 1989 at the Commission Hearing Room, Fourth Floor, 800 Smithe Street, Vancouver, B.C. The Division of the Commission named to review the Application will comprise of the following Commission members: Mr. John G. McIntyre, Chairman Mr. Norris Martin, Com missioner Mr. Frank C. Leighton, Commissioner PUBLIC INSPECTION OF THE APPLICATIONS The Applications and supporting material are available for inspection at the Head Office of Pacific Coast Energy Corporation, 1333 West Georgia Street, Vancouver, B.C. V6E 3K9, and at the main Public Libraries in Squamish, Sechelt, Powell River, Courtenay, Campbell River, Port Alberni, Nanaimo, Duncan, and Victoria. The Applications and supporting material are also available for inspection at the office of the British Columbia Utilities Commission, Fourth Floor, 800 Smithe Street, Vancouver, B.C. An Executive Summary is to be prepared and made available for inspection in PCEC office, community public libraries as above-noted and will be distributed by the Applicant to interested parties, as they become registered with the Commission. INTERVENTIONS Any person intending to be present at the public hearing and to give evidence or cross-examine witnesses should provide written notice, to be received not later than Monday, January 9, 1989, to the Commission Secretary and to the Applicant. The notice should include a brief statement of the nature of the interest in the proceedings. SUBMISSIONS BY INTERESTED PERSONS Any person intending to file a wri tten submission must do so, to be received not later than Wednesday, January 18,1989, one copy of the submission to the Commission Secretary and one copy to the Applicant. CLARIFICATION Persons intending to participate in the public hearing, and who are uncertain as to the manner in which to proceed, may contact Mr. R.J. Pellatt, Commission Secretary, or Mr. W.J. Grant, Director of Engineering and Accounting by telephone (660-4700) collect, or in writing. BY ORDER R ert J. Pellatt Commission Secretary 361/71 fcms FOURTH SNt:THE STQEET \!~t.,NCOUVER, S.C V6Z 2E~ CANADA RAo~CO!'l~ 420 io')4! 66{)·1
APPENDIX A Page 1 of 6 T~~SMISSION OF NATURAL GAS TO AND ON VANCOUVER ISLAND TE~~S OF REFERENCE IN THE r1ATTER OF THE UTILITIES COMMISSION ACT (lithe Act") S.B.C. 1980, c.60, and IN THE V~TTER OF AN APPLICATION BY PACIFIC COAST ENERGY CORPORATION ("PCEC") FOR AN ENERGY PROJECT CERTIFICATE TO CONSTRUCT NATURAL GAS PIPELINE TRANSMISSION FACILITIES TO AND ON VANCOUVER ISLAND (" the Proj ect ") DISPOSITION OF APPLICATION AND TEP~S OF REFERENCE FOR REVIEW BY THE B.C. UTILITIES COMMISSION WHEREAS, in October, 1987, the government of British Columbia called for proposals for the construction and operation of a natural gas pipeline to and on Vancouver Island; AND WHEREAS, following a review and evaluation of five proposals, in February, 1988, PCEC was invited to prepare an Energy Project Certificate Application; AND WHEREAS, in September, 1988, the governments of Canada and British Columbia executed a "Statement of Principles" regarding assistance in the construction of the Project; AND WHEREAS, the governments of Canada and British Columbia seek a number of undertakings from PCEC in respect of completion assurances, employment and procurement benefits, environmental safeguards, and other commitments as specified in the Statement of Principles: AND "'l}iEREAS, in November, '·1988, PCEC submitted an application for an Energy Project Certificate"· (lithe Application") ;
J..PPENDIX A - 2 - Page 2 of 6 AND w~EREAS, in December, 1988, PCEC submitted an Iternative application for an Energy Project Certificate (lithe Alternative Application") which is based upon sourcing project natural gas directly from the Westcoast Energy system near Kilgard in the Fraser Valley, rather than rc~ the B.C. Gas Inc. system near Coquitl~u; AND w~EREAS, provincial and federal agencies are reviewing the Application and the Alternative Application; NOW THEREFORE, pursuant to sections 19(1} (a) and 20 of the Act, the Minister of Energy, Mines and Petroleum Resources, with the concurrence of the Minister of Environment, hereby refers the Application and the Alternative Application to the British Columbia Utilities Commission (lithe Corrunission") for a review. The Commission shall hear the Application and Alternative Application in a public hearing in accordance with the following Terms of Reference, and shall invite co~ments from interested parties. 1. OBJECTIVE. The Commission shall recommend to the Lieutenant Governor in Council whether either the Application or the Alternative Application for an Energy Project Certificate should be issued or refused and, if issuance is recommended, the Co~~ission shall also recommend conditions it considers advisable for inclusion in an Energy Project Certificate, an Energy Operation Certificate, or both. The Commission shall base its recommendation on a review and assessment of PCEC's ability to: a) design, construct, and operate the Project; b) minimize and mitigate any adverse environmental, resource, land use, and socio-economic impacts associated with the Project; c) complete the Project on time and on budget; and d) purchase and market natural gas to mills and local distribution utilities. In order to expedite the hearing, the Commission maY limit discussion of matters which have previously been reviewed in hearings before the Co~mission, or for which conclusive documentation has been pr~vided to the proceedings.
APPENDIX A - 3 - Page 3 of 6 2. DESIGN, CONSTRUCTION AND OPERATION The Commission shall review and assess the design, construction, and operation of the project, having regard to liness, safety, reliability and efficie~cy. The review d assessment nay include evaluations of: a) the proposed land and marine routing; b) the adequacy of design specifications, flow diagrams, wall thicknesses and diameters, pipeline lengths, operating and design pressures, cathodic protection, grades, coatings, and swamp weights: c) the compatibility with transmission and distribution system tie-ins: d) the minimization of the potential for service interruptions from avalanche, rock slide, seismic, and other risks, and from any innovative construction procedures: . e) the construction and scheduling methods proposed for the marine crossings, river and stream crossings, and for areas used for domestic water supplies; f) operating, maintenance, and repair procedures after construction; g) the schedule and scope of detailed engineering design, environmental, and other studies; h) the construction schedule, matters which may affect the construction schedule, and in-service dates, having particular regard to the reasonableness of these schedules and their compatibility with each other. 3. ENVIRONMENTAL, RESOURCE, LAND USE, ~~D SOCIa-ECONOMIC ~~TTERS The Commission shall review and assess significant impacts of the Project on the physical environment, resources, land uses, local services, and the regional, provincial and national economies. The review and assessment may include evaluations of: a) the acceptability of the route. and aligp~ent from environmental, resource and land use perspectives; b) the Project's ~pacts on the physical and biological environment, resources, and land uses:
· . APPENDIX A - 4 - Page 4 of 6 c) PCEC's proposals for avoiding, managing, or compensating for any adverse impacts during construction and operation; d) the p~oposed level of B~itish Colurrbia and Canadian content with respect to labour, material and equipment procu~ement; e) the structure and responsibilities of a Project steering committee that would monitor the implementation of conditions, requirements, and other procedures associated with Project construction. 4. CAPITAL COSTS The Commission shall review and assess the Project's capital costs estimates. The review and assessment may include evaluations of: a) design and engineering costs; b) land and right of way acquisition costs; c) pipe, compressor station, and other materials costs; d) construction costs, including engineering and overheads; e) environmental assessment, design, impact mdtigation, and supervision costs; f) contingencies; g) allowance for funds used during construction; h) other capitalized costs; i) procedures for monitoring and controlling costs; j) methods to deal with possible costs overruns; k) estimates of Project completion above, on, and below budget. 5. COST OF SERVICE The Commdssion shall review and assess pro forma financial statements, rate base, and ~ost of service estimates fo~ the period 1990 through 2010 and the assumptions used in their prepa~ation. The review and assessment may include evaluations of: a) depreciation expense;
APPENDIX A - 5 - Page 5 of 6 b) interest and return on equity; c) corporate taxes; d) operating and maintenance costs, including costs of transmission fuel; e) property taxes; f} other expenses, taxes or costs added to the cost of service; g) ways to lower the cost of service during the first five years of operation, including deferral of depreciation, adjustments to the debt/equity structure, and allowable return on equity. 6. PURCHASES AND MARKETS The Commission shall review and assess proposed gas purchase plans and markets, using the load forecasts and unit cost of service estimates of the companies awarded distribution franchises. The review and assessment may include evaluations of: a) proposed gas purchase, storage and transportation arrangements; b} projected gas sales volumes; c) proposed gate station rates to local distribution utilities; d) proposed agreements and prices for heavy industrial users; e) the impact on load forecasts of any marketing or other programs that would accelerate load growth, including PCEC's proposals for administering the large industrial conversion assistance program. 7. OTHER MATTERS In its review of the Application and the Alternative Application, the Commission shall consider any other matters that may be specified in supplementary Terms of Reference jointly by the Minister of Energy, Mines and Petroleum Resources and the Minister ot Environment.
- 6 - 8. REPORT AND RECO~1ENDATIONS On conclusion of the public hearing, the Co~~ission s all submit a report and recommendations to the Lieutenant oYe~nor in Council by March 22, may be practical. In the event that there a~e impediments to the expeditious review of the Application and the Alternative Application, the Commission shall advise the Minister of Energy, Mines and Petroleum Resources, and indicate what measures may assist in expediting the review process. 9. TRANSMITTAL Pacific Coast Energy Corporation's Application and its Alternative Application are transmitted to the COmmission with this Disposition and Terms of Reference~ Honourable Minister O"''''-I~;.I. and Petroleum. Dated this ?o~ day of December, APPENDIX 'A Page 6 of 6 1989, or as soon the~eafter -- ( I(~ Honourable W. Bruce Strachan Minister of State for Cariooo and Minister Responsible for Environment 1988.
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