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BILL NO. 6





Government Bill




5th Session, 56th General Assembly
Nova Scotia
46 Elizabeth II, 1997




An Act Respecting the Delivery

and Sale of Natural Gas in the Province





The Honourable Eleanor E. Norrie
Minister of Natural Resources




Halifax
Printed by Queen s Printer for Nova Scotia







An Act Respecting the Delivery

and Sale of Natural Gas in the Province




Be it enacted by the Governor and Assembly as follows:

1 This Act may be cited as the Gas Distribution Act.

2 The purpose of this Act is to

(a) provide a framework for the orderly development and operation of a gas delivery system in the Province; and

(b) allow for fair competition in the sale of gas for consumption in the Province.

3 In this Act,

(a) "Board" means the Nova Scotia Utility and Review Board;

(b) "franchise" means a franchise granted pursuant to this Act to construct and operate a gas delivery system;

(c) "gas" means

(i) natural gas after it has been subjected to any processing,

(ii) coal gas as defined in the Petroleum Resources Act,

(iii) any substance removed from natural gas, crude oil, oil sands or coal for delivery in gaseous state,

(iv) any substance declared by the Board to be gas;

(d) "gas delivery system" means

(i) any pipes, equipment, apparatus, mechanism, machinery, instrument or storage facility incidental to the delivery of gas for ultimate consumption,

(ii) any building or structure that houses or protects anything referred to in subclause (i),

but does not include a tank car, tank wagon, cylinder or vessel for the delivery of liquefied petroleum gas, including propane and butane, unless such are operated in conjunction with or ancillary to a gas delivery system;

(e) "person" includes a partnership;

(f) "prescribed" means, except where the context otherwise requires, prescribed by the Board by regulation.

GRANTING OF FRANCHISE

4 Notwithstanding any enactment, no person shall construct or operate a gas delivery system except pursuant to a franchise.

5 (1) A person may apply to the Board, in the time and in the manner prescribed, for a franchise.

(2) Notwithstanding subsection (1), the Board may invite applications for a franchise in the time and in the manner prescribed.

6 When submitting an application pursuant to Section 5, the applicant shall provide to the Board the prescribed information.

7 (1) Upon receipt of an application pursuant to subsection 5(1), the Board shall give notice to the public of the receipt of the application.

(2) Upon receipt of an application pursuant to Section 5, the Board shall invite public comment on the application and, where in the opinion of the Board it is advisable to do so, hold a public hearing.

8 (1) The Board may grant a franchise.

(2) Before granting a franchise, the Board shall be satisfied that the granting of the franchise is in the public interest and shall take into consideration the following factors:

(a) the existence of markets, actual or potential;

(b) the availability of adequate gas supplies;

(c) the economic feasibility of the proposed gas delivery system;

(d) the financial capability of the applicant;

(e) related experience of the applicant in the delivery of gas;

(f) the plans of the applicant to provide service in the franchise area; and

(g) such other factors as are prescribed by the Governor in Council.

(3) The granting of a franchise by the Board is subject to the approval of the Governor in Council.

(4) Notwithstanding anything contained in this Act, a public utility as defined in the Public Utilities Act shall not be granted a franchise pursuant to this Act.

(5) For greater certainty, nothing in subsection (3) precludes an affiliate or subsidiary of a public utility as defined in the Public Utilities Act from applying for and being granted a franchise pursuant to this Act.

9 A franchise

(a) shall be for such term as is determined by the Board and may be renewed in accordance with the regulations; and

(b) is subject to such terms and conditions as may be specified by the Board or prescribed by the Governor in Council.

10 (1) The holder of a franchise may apply to the Board, in the time and in the manner prescribed, to

(a) amend the terms or conditions of the franchise;

(b) expand the geographical boundaries of the franchise;

(c) consolidate non-contiguous franchises granted to the applicant.

(2) Upon receipt of an application pursuant to subsection (1), the Board shall give notice to the public of receipt of the application in the manner prescribed and may hold a public hearing on the application.

(3) A decision of the Board to amend the terms or conditions of a franchise or expand the geographical boundaries of a franchise has no force or effect unless and until it is approved by the Governor in Council.

11 No person shall transfer or assign a franchise without the approval of the Board.

12 Except in the ordinary course of maintenance or repair, no gas delivery system, or part thereof, may be taken up, removed or abandoned without the consent of the Board.

13 Subject to Section 14, a person to whom a franchise is granted has the exclusive right to construct and operate a gas delivery system within the geographical area to which the franchise extends.

14 (1) A person may apply to the Board for a franchise within the boundaries of an existing franchise in the manner prescribed.

(2) The Board shall give notice to the existing franchise holder and the public of an application received pursuant to subsection (1) and may hold a public hearing on the application.

(3) The Board shall not grant a franchise pursuant to this Section unless the Board is satisfied that the granting of the franchise will not unduly affect the economic interests of the existing franchise holder and the granting of the franchise complies with such other requirements as may be prescribed by the Governor in Council.

(4) Upon the granting of a franchise pursuant to this Section, the boundaries of the existing franchise shall be amended accordingly by the Board.

15 The holder of a franchise shall not make any unjust discrimination in tolls, service or facilities against any person or locality.

16 Where it is shown that the holder of a franchise makes any discrimination in tolls, service or facilities against any person or locality, the burden of proving that the discrimination is not unjust lies on the holder of the franchise.

17 Subject to such exemptions or conditions as prescribed, the holder of a franchise shall, without delay and with due care and diligence, receive, transport and deliver or store, without discrimination, all gas offered to its gas delivery system.

18 (1) Where the Board finds such action necessary or desirable in the public interest, the Board may direct the holder of a franchise to extend or improve its gas delivery system if the Board finds that no undue burden will be placed on the holder of the franchise.

(2) Subsection (1) does not empower the Board to compel the holder of a franchise to deliver gas to additional customers if to do so would impose undue burden on its existing customers or impair its ability to render adequate service to its existing customers.

CONSTRUCTION AND OPERATION OF GAS DELIVERY SYSTEM

19 A person to whom a franchise is granted shall not

(a) construct a gas delivery system or any part thereof, except pursuant to a permit; or

(b) operate a gas delivery system, except pursuant to a licence,

issued by the Board pursuant to the Pipeline Act.

20 The Pipeline Act applies to a gas delivery system and, for greater certainty, a reference in that Act to the Energy Board shall be read and construed as a reference to the Board.

RATES

21 The holder of a franchise shall not impose, observe or follow rates, tolls or charges except those that are

(a) specified in a tariff that has been filed with the Board and is in effect; or

(b) approved by an order of the Board.

22 (1) The Board may, on its own initiative or on the application of a person having an interest, by order in writing, approve or fix just and reasonable rates, tolls or charges for the delivery of gas by a gas delivery system, including related services.

(2) Before approving or fixing rates, tolls or charges pursuant to subsection (1), the Board shall invite public comment on the application and, where in the opinion of the Board it is desirable to do so, hold a public hearing.

(3) In approving or fixing rates, tolls or charges, the Board shall give due regard to the following criteria and may give appropriate weight to each of them relative to the others:

(a) the related practical attributes of simplicity, understandability, public acceptability and feasibility of application;

(b) freedom from controversies as to proper interpretation;

(c) effectiveness in yielding total revenue requirements under the just and reasonable return standard;

(d) revenue stability from year to year;

(e) stability of the rates, tolls or charges themselves, with a minimum of unexpected changes seriously adverse to existing customers;

(f) competition;

(g) fairness of the specific rates, tolls or charges in the apportionment of total costs of service among the different consumers;

(h) avoidance of undue discrimination in rate relationships;

(i) efficiency of the rates, tolls or charges in discouraging wasteful use of service while promoting all justified types and amounts of use in the control of

(i) the total amounts of service supplied by the applicant, and (ii) the relative uses of alternative types of service; and

(j) such other matters as the Board deems appropriate.

(4) Notwithstanding subsection (3), the Board may, by order in writing, approve or fix just and reasonable rates, tolls or charges that

(a) are intended to result in cost savings or other benefits to be allocated between the owner of the gas delivery system and its customers; and

(b) are otherwise in the public interest.

(5) The Board may specify terms and conditions that apply to an order made pursuant to subsection (4).

SALE OF GAS

23 In Sections 24 to 30, "consumer" means a person who consumes gas on an annual basis in an amount less than the amount prescribed.

24 No person shall sell gas to a consumer unless that person has been issued a licence by the Board.

25 A person may apply, in the time and in the manner prescribed, for a licence.

26 The Board may issue a licence upon such terms and conditions as the Board considers appropriate or as are prescribed.

27 (1) The Board may amend a licence upon application by the holder in the time and in the manner prescribed.

(2) Where an application is made pursuant to subsection (1), the Board may

(a) amend the licence, subject to such terms and conditions as the Board considers appropriate;

(b) cancel the licence and grant a new licence, subject to such terms and conditions as the Board considers appropriate; or

(c) deny the amendment.

28 The Board may, in its discretion or as prescribed, amend, suspend, reinstate or cancel a licence.

29 No person shall transfer or assign a licence without the approval of the Board.

30 (1) Notwithstanding anything contained in this Act, no public utility as defined in the Public Utilities Act or holder of a franchise shall be issued a licence pursuant to this Part.

(2) For greater certainty, nothing in subsection (1) precludes an affiliate or subsidiary of a public utility as defined in the Public Utilities Act or holder of a franchise from applying for and being issued a licence pursuant to this Part.

GENERAL

31 (1) At the conclusion of a hearing, the Board may award such costs as the Board deems appropriate.

(2) The costs awarded pursuant to subsection (1) shall be paid by the applicant.

32 The Board may, from time to time, make interim orders pending final disposition of matters before it.

33 (1) The Board may hold an inquiry as to whether any breach of a term or condition of a franchise has occurred.

(2) The Board shall give notice of an inquiry pursuant to this Section to the holder of the franchise and such other persons as the Board may determine in the time and in the manner prescribed.

(3) After an inquiry pursuant to this Section, the Board shall, if it finds that a breach of a term or condition of a franchise has occurred, amend or cancel the franchise.

(4) The amendment or cancellation of a franchise pursuant to subsection (3) has no force or effect until it is approved by the Governor in Council.

34 The Board may, on its own initiative or at the request of the Governor in Council, investigate any matter concerning a gas delivery system and may make all necessary examinations and inquiries and keep itself informed as to the compliance of the holder of a franchise with the provisions of law and has the right to obtain from the holder of a franchise all information necessary to enable the Board to fulfil its duties.

35 (1) Upon complaint made to the Board by any person that

(a) any rate, toll or charge is in any respect unduly discriminatory;

(b) the holder of a franchise is not complying with the terms or conditions of the franchise;

(c) service is inadequate or unobtainable,

the Board shall proceed, with or without notice, to make such investigation as the Board deems necessary or expedient, and the Board may order

(d) the rates, tolls or charges reduced, modified or altered;

(e) that the holder of the franchise comply with the terms or conditions of the franchise;

(f) that the holder of the franchise furnish reasonably adequate service and facilities and make such repairs, enhancements or extensions as may be required.

(2) Before making an order pursuant to subsection (1), the Board shall hold a public hearing if, in the opinion of the Board, it is in the public interest to do so.

(3) The Board, when called upon to institute an investigation, may, in its discretion, require from the complainant the deposit of a reasonable amount of money or other security to cover the costs of the investigation and that money or security shall be dealt with as the Board directs if the decision is given against the complainant.

36 (1) No member of the Board shall be directly or indirectly employed by or interested in a gas delivery system or interested in a share, stock, bond, mortgage, security or contract of the holder of a franchise or licence and, where a member of the Board voluntarily becomes so interested, the member's office becomes vacant or, where the member becomes so interested otherwise than voluntarily, the member shall, within a reasonable time, dispose of the interest.

(2) Where a member of the Board fails to dispose of an interest as required by subsection (1), the Governor in Council may declare the office of the member vacant.

(3) No member of the Board is disqualified by reason only of being a consumer of gas.

37 (1) A person who contravenes or fails to comply with

(a) this Act or the regulations;

(b) a term or condition of a franchise or licence;

(c) any order or direction given by the Board pursuant to this Act or the regulations,

is guilty of an offence and liable on summary conviction to a penalty not exceeding one hundred thousand dollars or imprisonment for a term not exceeding two years.

(2) Where an offence referred to in subsection (1) is committed by a person on more than one day or is continued for more than one day, it shall be a separate offence for each day on which the offence is committed or continued.

38 No person shall prevent, hinder, obstruct, molest or otherwise interfere with a member of the Board or a person authorized by the Board in the exercise of powers pursuant to this Act.

39 No person shall knowingly make a false statement in any record required to be kept or any document required to be submitted pursuant to this Act or the regulations.

40 Where there is a conflict between this Act and any other enactment, this Act prevails.

41 (1) The Board may make regulations

(a) respecting procedures and forms to be used for an application or proposal;

(b) respecting fees pertaining to any matter provided for pursuant to this Act or the regulations;

(c) respecting the information to be provided by an applicant for a franchise;

(d) respecting the giving of public notice;

(e) respecting the transfer or assignment of a franchise;

(f) respecting the amendment of a franchise;

(g) respecting exemptions or conditions for the purpose of Section 17;

(h) respecting procedures and forms to be used for the issuing of a permit or licence;

(i) respecting fees pertaining to the issuing of a permit or licence, including renewal fees;

(j) respecting terms and conditions of a permit or licence;

(k) respecting rates, tolls or charges imposed by the holder of a franchise;

(l) prescribing an amount for the purpose of Section 23;

(m) respecting the amendment, suspension or reinstatement of a licence; (n) respecting the transfer or assignment of a licence;

(o) respecting information to be kept and maintained by the holder of a franchise.

(2) The exercise by the Board of the authority contained in subsection (1) is regulations within the meaning of the Regulations Act.

42 (1) The Governor in Council may make regulations

(a) respecting the approval of a franchise;

(b) prescribing criteria to be taken into consideration by the Board prior to granting a franchise;

(c) respecting the renewal of a franchise;

(d) respecting terms and conditions of a franchise;

(e) providing for different classes of franchises;

(f) exempting certain applicants from some or all of the terms and conditions of a franchise as prescribed by the Board;

(g) prescribing requirements for the purpose of Section 14;

(h) respecting orders and directives issued by the Board;

(i) conferring powers and duties on the Board;

(j) respecting the approval of the amendment or cancellation of a franchise;

(k) defining any word or expression used but not defined in this Act;

(l) respecting any matter deemed necessary or advisable to carry out effectively the intent and purpose of this Act.

(2) The exercise by the Governor in Council of the authority contained in subsection (1) is regulations within the meaning of the Regulations Act.

43 Subclauses 2(e)(v) and 2(f)(iv) of Chapter 380 of the Revised Statutes, 1989, the Public Utilities Act, are repealed.

44 Chapter 182 of the Revised Statutes, 1989, the Gas Utilities Act, is repealed.

45 This Act comes into force on such day as the Governor in Council orders and declares by proclamation.



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