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ORDER NUMBER G-200-24

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

and Emanate Energy Solutions Inc. Application to Acquire Additional Units of Creative Energy Holdings Limited Partnership and Shares of Creative Energy Holdings GP Ltd.

BEFORE: E. B. Lockhart, Panel Chair W. E. Royle, Commissioner

WHEREAS:

A.

on July 25, 2024 ORDER

On May 21, 2024, Emanate Energy Solutions Inc. (Emanate Energy) filed an application (Application) with the British Columbia Utilities Commission (BCUC) for approvals pursuant to section 54(8) of the Utilities Commission Act (UCA) in connection to proposed capital calls involving the Creative Energy group of companies (Creative Energy Group). Specifically, the Application seeks an order approving Emanate Energy to:

1.

2.

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acquire additional Class A (common) units of Creative Energy Holdings Limited Partnership (CE Holdings LP) and a corresponding proportion of common shares in its general partner, Creative Energy Holdings GP Ltd. (CE Holdings GP), which will increase the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy to approximately 54.5 percent; and

acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in its general partner, CE Holdings GP, from time to time (including in response to a May 2024 capital call, as applicable) in accordance with the operation of the terms of the Second Amended and Restated Creative Energy Holdings Limited Partnership Agreement (Partnership Agreement) and the Amended and Restated Shareholder Agreement of CE Holdings GP (Shareholder Agreement) related to capital calls, each as further amended from time to time, which will further increase the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy.

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Order G-200-24 B. Certain entities within the Creative Energy Group own and operate Stream A and/or Stream B Thermal Energy Systems (TES) pursuant to the BCUC’s TES Regulatory Framework Guidelines, and are public utilities under the UCA;

C. The regulated TES in the Creative Energy Group are owned by entities below Creative Energy Developments Limited Partnership, which is wholly owned by CE Holdings LP;

D. Emanate Energy and Creative Energy Canada Platforms Corp. (Creative Canada) are parties to both the Partnership Agreement, which governs the operations of CE Holdings LP, and the Shareholder Agreement;

E. CE Holdings GP issued a capital call to Emanate Energy and Creative Canada in February 2024 (February 2024 Capital Call). Creative Canada subsequently opted not to fund its share, which resulted in Emanate Energy funding the entirety of the capital call. Pursuant to the Partnership Agreement, the Shareholder Agreement, and the agreement of Emanate Energy and Creative Canada, the issuance of Class A units of CE Holdings LP and common shares of CE Holdings GP to Emanate Energy in respect of this capital call will increase its indirect control of the voting shares of the public utilities in the Creative Energy Group to approximately 54.5 percent;

F. CE Holdings GP issued a further capital call to Emanate Energy and Creative Canada in May 2024 (May 2024 Capital Call). Creative Canada subsequently opted not to fund its share, which resulted in Emanate Energy funding the entirety of the capital call. Pursuant to the Partnership Agreement, the Shareholder Agreement, and the agreement of Emanate Energy and Creative Canada, the issuance of Class A units of CE Holdings LP and common shares of CE Holdings GP to Emanate Energy in respect of this capital call will further increase its indirect control of the voting shares of the public utilities in the Creative Energy Group to up to approximately 58.3 percent;

G. Emanate Energy anticipates that future capital calls by CE Holdings GP may result in further issuances of additional Class A units of CE Holdings LP and common shares of CE Holdings GP to Emanate Energy that would further increase its indirect control of the voting shares of the public utilities in the Creative Energy Group;

H. By Order G-157-24, the BCUC established a regulatory timetable for the review of the Application, which included public notice requirements, one round of BCUC Information Requests to Emanate Energy, letters of comment and Emanate Energy’s final argument and reply to letters of comment;

I.

During the course of the proceeding, Emanate Energy filed with the BCUC the Partnership Agreement, the Shareholder Agreement, a receipt related to the February 2024 Capital Call, and a consent and waiver related to the May 2024 Capital Call. Emanate Energy requests the unredacted version of these documents be held confidential due to their commercially sensitive nature;

J. The BCUC did not receive any letters of comments for this proceeding; and K. The BCUC has reviewed the Application, evidence, and Emanate Energy’s final argument and makes the following determinations.

NOW THEREFORE for the reasons outlined in the decision accompanying this order, the BCUC orders as follows: 1. Emanate Energy is approved under Section 54(8) of the UCA to acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in CE Holdings GP in response to the February 2024 Capital Call.

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Order G-200-24 2. Emanate Energy is approved under Section 54(8) of the UCA to acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in CE Holdings GP, including in response to the May 2024 Capital Call, in accordance with the terms of the Partnership Agreement and the Shareholder Agreement each as further amended from time to time, related to capital calls and associated equity issuances, as long as such acquisitions do not result in Emanate Energy directly or indirectly controlling more than 85 percent of the voting shares of the public utilities in the Creative Energy Group.

3. Emanate Energy must provide the following filings to the BCUC: a. If, subsequent to the May 2024 Capital Call there are issuances of limited partnership units of CE Holdings LP or shares of CE Holdings GP that result in an increase in the percentage of voting shares of the public utilities directly or indirectly controlled by Emanate Energy, then Emanate Energy is to inform the BCUC of such issuances within 30 days of the issuance; and

b. if there are any amendments to the Partnership Agreement or the Shareholder Agreement that change the provisions under which a party is entitled to increase its interest in CE Holdings LP and CE Holdings GP, then Emanate Energy is to inform the BCUC of such changes within 30 days following such amendments.

4. Emanate Energy’s request to hold confidential certain information filed confidentially during the course of the proceeding is approved until further order of the BCUC.

DATED at the City of Vancouver, in the Province of British Columbia, this 25 BY ORDER Original signed by: E. B. Lockhart Commissioner

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day of July 2024.

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Emanate Energy Solutions Inc. Application to Acquire Additional Units of Creative Energy Holdings Limited Partnership and Shares of Creative Energy Holdings GP Ltd.

DECISION

Table of Contents

Page no.

Executive Summary ........................................................................................................................................ i 1.0 Introduction .......................................................................................................................................1 1.1 Background .......................................................................................................................................1 1.2 Legislative Framework ......................................................................................................................1 2.0 Equity Financing of Creative Energy .....................................................................................................2 2.1 Capital Calls ......................................................................................................................................2

APPENDICES APPENDIX A

EXHIBIT LIST

Order G-200-24

Executive Summary On May 21, 2024, Emanate Energy Solutions Inc. (Emanate Energy) filed an application with the British Columbia Utilities Commission (BCUC) for approvals pursuant to section 54(8) of the Utilities Commission Act in connection to proposed capital calls involving the Creative Energy group of companies (Creative Energy Group). The proposed capital calls will increase Emanate Energy’s ownership interest in the public utilities in the Creative Energy Group.

Emanate Energy and Creative Energy Canada Platforms Corp. each have a 50 percent ownership interest in the public utilities in the Creative Energy Group. Emanate Energy submits that increases in the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy resulting from capital calls will not detrimentally affect the public utilities in the group and should be approved by the BCUC.

The Panel approves Emanate Energy to increase the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy resulting from capital calls as long as it does not result in Emanate Energy controlling more than 85 percent of the voting shares of the public utilities. The Panel also directs Emanate Energy to provide certain filings to the BCUC to enable BCUC oversight of future increases in Emanate Energy’s ownership interest in the public utilities in the Creative Energy Group.

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i

1.0 Introduction On May 21, 2024, Emanate Energy Solutions Inc. (Emanate Energy) filed an application (Application) with the British Columbia Utilities Commission (BCUC) for approvals pursuant to section 54(8) of the Utilities Commission Act (UCA) in connection to proposed capital calls involving the Creative Energy group of companies (Creative Energy Group).

On June 10, 2024, by Order G-157-24, the BCUC established the regulatory timetable for the review of the Application, which included public notice requirements, one round of BCUC Information Requests to Emanate Energy, letters of comment and Emanate Energy’s final argument and reply to letters of comment. The BCUC did not receive any letters of comments regarding the Application.

This decision addresses the Panel’s final determinations on the Application. 1.1 Background Certain entities within the Creative Energy Group own and operate Stream A and/or Stream B Thermal Energy Systems (TES) pursuant to the BCUC’s TES Regulatory Framework Guidelines, and are public utilities under the UCA. The regulated TES in the Creative Energy Group are owned by entities below Creative Energy Developments Limited Partnership (CEDLP), which is wholly owned by Creative Energy Holdings LP (CE Holdings LP). The Class A (common) units of CE Holdings LP are currently held 50 percent by Emanate Energy and 50 percent by Creative Energy Canada Platforms Corp. (Creative Canada). 1

Emanate Energy is a wholly owned indirect subsidiary of the InstarAGF Essential Infrastructure LP fund managed by Instar Asset Management Inc. and Creative Canada is a wholly owned subsidiary of Westbank Holdings Ltd. 2 In 2020 Emanate Energy acquired indirect control of the voting shares of the public utilities in the Creative Energy Group through its acquisition of an ownership interest in CEDLP. 3 Since then, Emanate Energy and Creative Canada have each held a 50 percent interest of the Class A (common) units of CEDLP or, after it became the new parent entity in the Creative Energy Group structure in a 2021 reorganization, CE Holdings LP. 4

1.2 Legislative Framework As defined by section 54 of the UCA, Emanate Energy has a reviewable interest in the public utilities in the Creative Energy Group.

Section 54(4) 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(8) of the UCA states that a person with a reviewable interest in a public utility must obtain the BCUC’s approval before acquiring additional voting shares of a public utility if the acquisition increases the percentage of voting shares controlled.

Section 54(9) of the UCA 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

1 Exhibit B-1, Application, pp. 2 – 3. 2 Exhibit B-1, Application, pp. 3 – 4. 3 Approved by Order C-1-20. 4 Exhibit B-1, Application, p. 4.

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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.

2.0 Equity Financing of Creative Energy Emanate Energy is seeking BCUC approval in connection to proposed capital calls involving the Creative Energy Group, which will increase its ownership interest in the public utilities in the Creative Energy Group. Specifically, it is seeking approval to: 5

1. acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in its general partner, Creative Energy Holdings GP Ltd. (CE Holdings GP), which will increase the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy to approximately 54.5 percent; and

2. acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in its general partner, CE Holdings GP, from time to time (including in response to a May 2024 capital call, as applicable) in accordance with the operation of the terms of the Second Amended and Restated Creative Energy Holdings Limited Partnership Agreement (Partnership Agreement) and the Amended and Restated Shareholder Agreement of CE Holdings GP (Shareholder Agreement), each as further amended from time to time, related to capital calls, which will further increase the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy.

Emanate Energy and Creative Canada are parties to the Partnership Agreement, which governs the operations of CE Holdings LP, and the Shareholder Agreement. 6 Pursuant to the terms of the Partnership Agreement, CE Holdings GP can issue capital calls to Emanate Energy and Creative Canada for the contribution of funds to CE Holdings LP to fund the requirements of regulated and non-regulated activities in the Creative Energy Group. 7

The Partnership Agreement establishes a capital call mechanism whereby CE Holdings GP will issue Class A Units to Emanate Energy and Creative Canada in return for their respective voluntary contribution of funds. Emanate Energy and Creative Canada are each entitled to contribute funds to CE Holdings LP in response to a capital call in proportion to their existing ownership of Class A Units, as well as further contributing funds to address funding shortfalls in the event a partner opts to not contribute its full share.

The Shareholder Agreement contemplates that Emanate Energy and Creative Canada will hold common shares of CE Holdings GP proportionate to their Class A Units of CE Holdings LP. 8 The Shareholder Agreement provides that a quorum for shareholder meetings shall consist of a representative of each shareholder. 9 In addition, the Shareholder Agreement includes provisions related to the appointment and composition of the board of directors for CE Holdings GP, CE Holdings LP, and their subsidiaries, as well as considerations for a quorum for board meetings. 10

2.1 Capital Calls On February 5, 2024, CE Holdings GP issued a funding notice to Emanate Energy and Creative Canada in respect of a capital call (February 2024 Capital Call). Emanate Energy funded its 50 percent share of the February 2024

5 Exhibit B-1, Cover letter, p. 1, Application, p. 2; Emanate Final Argument, p. 2. 6 Exhibit B-1, Application, p. 4. 7 Exhibit B-1, Application, p. 5. 8 Exhibit B-1, Application, p. 5. 9 Exhibit B-3, Shareholder Agreement, Section 4.11.2. 10 Exhibit B-3, Shareholder Agreement, Sections 4.1.2, 4.1.6, 4.2.

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Capital Call and was issued partnership units of CE Holdings LP, in accordance with the terms of the Partnership Agreement. Creative Canada subsequently advised CE Holdings GP that it had opted not to fund its 50 percent share of the February 2024 Capital Call.

Subsequently, Emanate Energy and CE Holdings GP agreed that Emanate Energy would contribute 100 percent of the shortfall amount not contributed by Creative Canada in respect of the February 2024 Capital Call. Further, Emanate Energy and Creative Canada agreed that Emanate Energy is entitled to be issued additional partnership units pursuant to the Partnership Agreement, and as a result, corresponding common shares in CE Holdings GP. As such, Emanate Energy would indirectly control approximately 54.5 percent of the voting shares of the public utilities in the Creative Energy Group. 11

On May 3, 2024, CE Holdings GP issued another capital call (May 2024 Capital Call) to Emanate Energy and Creative Canada. In light of the funding arrangements for the February 2024 Capital Call, Emanate is entitled to contribute approximately 54.5 percent of the capital call funds. Also, if Creative Canada opts not to contribute its pro rata portion of the May 2024 Capital Call funds, Emanate Energy is entitled to contribute the full amount of the May 2024 Capital Call and be issued a proportionate number of Class A Units of CE Holdings LP and a corresponding percentage of common shares of CE Holdings GP. This would result in Emanate Energy indirectly controlling approximately 58.3 percent of the voting shares of the public utilities in the Creative Energy Group. 12

Emanate Energy states that CE Holdings GP will from time to time issue additional capital calls to Emanate Energy and Creative Canada. Emanate Energy expects to fund its share of such capital calls over the near term, and intends to fund 100 percent of any amount that Creative Canada opts not to contribute in respect of any such capital calls. As such, the percentage of voting shares of the public utilities in the Creative Energy Group that Emanate Energy indirectly controls will increase from time to time in accordance with the Partnership Agreement and the Shareholder Agreement. 13

Emanate Energy states that the capital calls contemplated by the Partnership Agreement and the Shareholder Agreement are routine funding steps. 14 Emanate Energy anticipates that CE Holdings LP will continue to make regular capital calls for at least the next three years and potentially on a quarterly basis over the next 2 years. 15 Emanate Energy explains that the uncertainty associated with the requirement to obtain the BCUC’s approval before increasing its interest in CE Holdings LP and CE Holdings GP creates a disincentive to contribute capital. Further, the timeline for funding does not permit sufficient time to seek BCUC approval prior to the funding date. 16 Obtaining the BCUC’s approval of the associated equity issuances in advance of the future capital calls would promote regulatory efficiency and decrease Emanate Energy’s and the Creative Energy Group’s time and cost associated with a regulatory application. 17

Emanate Energy submits that increases in its indirect control of the voting shares of the public utilities in the Creative Energy Group will not detrimentally affect the public utilities or their customers. 18 However, if the BCUC does not approve Emanate Energy’s request and, as a result, CE Holdings GP does not receive any equity funding from its capital calls, there will be a material and adverse effect on the Creative Energy Group’s ability to finance its existing operations and any other planned future development projects. 19 Emanate Energy also states that its proposals would not impact the benefits of having two shareholders (e.g. additional expertise, diversity of

11 Exhibit B-1, Application, p. 5. 12 Exhibit B-1, Application, pp. 5 – 6, 8. 13 Exhibit B-1, Application, p. 6. 14 Exhibit B-1, Application, p. 8. 15 Exhibit B-6, BCUC IRs 1.4, 2.7. 16 Exhibit B-6, BCUC IR 2.7. 17 Exhibit B-1, Application, p. 9; Exhibit B-6, BCUC IR 2.7. 18 Exhibit B-1, Application, p. 8. 19 Exhibit B-6, BCUC IR 1.5.

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perspectives) that were described to the BCUC when Emanate Energy initially acquired indirect control of the voting shares of the public utilities in 2020. 20

The Partnership Agreement and the Shareholder Agreement do not limit the percentage of voting shares of the public utilities in the Creative Energy Group that Emanate Energy could indirectly control as a result of funding future capital calls. Emanate Energy states that increases in the percentage of voting shares that it indirectly controls will not impact CE Holding GP’s ability and CE Holdings LP’s subsidiaries’ ability to have a quorum for board of director meetings. Emanate Energy also states that the number of shareholders and the benefits the shareholders bring will not change as result of the approvals sought in the Application, and nor will the conduct of business of the public utilities in the Creative Energy Group. 21

Emanate Energy submits that the increase of the percentage of voting shares of the public utilities in the Creative Energy Group indirectly controlled by Emanate Energy resulting from the February 2024 Capital Call, the May 2024 Capital Call, and any future capital calls will not detrimentally affect the public utilities in the group and should be approved by the BCUC. 22

Emanate Energy submits that seeking BCUC approval prior to each increase in its ownership interest in the public utilities, as opposed to the advanced approval sought in the Application, would create detrimental uncertainty for Emanate Energy, potential delays of necessary funding for the Creative Energy Group, and unnecessary regulatory burden. Further, it would not be commercially practical for the Creative Energy Group, which may require funding on short notice. Moreover, Emanate Energy questions the need for duplicative review considering that if the BCUC finds Emanate Energy’s majority ownership of the Creative Energy Group acceptable, then further incremental increases in ownership pursuant to the capital call mechanism are unlikely to attract different regulatory considerations. 23

Emanate Energy states that the Partnership Agreement and the Shareholder Agreement may be amended from time to time to address the evolving commercial relationship of the parties. Future amendments to these agreements should not be material to the regulatory acceptability of further incremental increases to the majority ownership interest of Emanate Energy in the Creative Energy Group. Emanate Energy proposes the following to provide the BCUC with transparency and to enable oversight of future increases in Emanate Energy’s ownership interest in the Creative Energy Group: 24

(a) Emanate Energy will inform the BCUC (on a confidential basis due to the commercial sensitivity of the information) within 30 days after completion of a capital call funding cycle if any issuances of limited partnership units and shares of CE Holdings GP and CE Holdings LP subsequent to those approved in the BCUC’s order result in an increase in the percentage of voting shares of the utilities indirectly controlled by Emanate Energy; and

(b) if the parties agree to Partnership Agreement and Shareholder Agreement amendments that materially change the specific provisions under which Emanate Energy is entitled to increase its interest in CE Holdings LP and CE Holdings GP, Emanate Energy will inform the BCUC of such changes (on a confidential basis due to the commercial sensitivity of the information) within 30 days following such amendments. If the BCUC had a concern about such an amendment, the BCUC could reconsider the merits of the advance approval of future increases in the interests of Emanate Energy in CE Holdings LP and CE Holdings GP.

20 Exhibit B-6, BCUC IR 2.3. 21 Exhibit B-6, BCUC IRs 2.1, 2.2, 2.3, 2.4. 22 Emanate Energy Final Argument, p. 3. 23 Emanate Energy Final Argument, pp. 3 – 4. 24 Emanate Energy Final Argument, pp. 4 – 5.

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Panel Determination The Panel approves Emanate Energy to: i. acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in CE Holdings GP in response to the February 2024 Capital Call.

ii.

acquire additional Class A (common) units of CE Holdings LP and a corresponding proportion of common shares in CE Holdings GP, including in response to the May 2024 Capital Call, in accordance with the terms of the Partnership Agreement and the Shareholder Agreement, each as further amended from time to time, related to capital calls and associated equity issuances, as long as such acquisitions do not result in Emanate Energy controlling more than 85 percent of the voting shares of the public utilities in the Creative Energy Group.