2012 ANNUAL REPORT UTILITY RATES REVIE EW COUNCIL OF NUNAVUT

Transcription

1 2012 ANNUA AL REPORT UTILITY RATES REVIEW COUNCIL OF NUNAV VUT

2 UTILITY RATES REVIEW COUNCIL OF NUNAVUT ANNUAL REPORT For year ending March 31, 2012 P age 2

3 Members of Nunavut Legislative Assembly: I take pleasure in submitting Annual Report of Nunavut Utility Rates Review Council for calendar year ending March 31, Original Signed By: Hon James Arreak Minister responsible for Utility Rates Review Council P age 3

4 The Honourable James Arreak Minister responsible for Utility Rates Review Council Of Nunavut Dear Minister: I have honour presenting Annual Report of Utility Rates Review Council of Nunavut for calendar year ending March 31, Respectfully submitted, Raymond Merce Chair, Utility Rates Review Council Of Nunavut P age 4

5 The Utility Rates Review Council 1. MANDATE The Utility Rates Review Council Act, created in e spring of 2001, and amended in summer of 2010, gives power to URRC to provide advice to ministers regarding rates and tariffs to be charged by designated utilities and any or matters as requested and directed by minister responsible for URRC. Under Act, a designated utility is defined as a utility or a member of class of utilities designated in regulations: Additionally, a utility is any of following that provides goods or services to public: (a) a corporation that is owned or controlled by Government of Nunavut, and to whichh this Act applies eir by legislation or a regulation made under paragraph 20(1)(a): (b) a department or administrativ ve divisionn of Government of Nunavut to which this Act applies eir by legislation or a regulation made under paragraph 20(1)(a): (c) a person or organisation not mentioned Act applies eir by legislation or a 20(1)(a) in paragraph (a) or (b) to whichh this regulation made under paragraph The Qulliq Energy Corporation and as a consequence Nunavut Power Corporation, as Designated Utilities, are subject to URRC through Utility Rates Review Council Act. P age 5

6 2. PURPOSE The purpose of Review Council as outlined in section 7 of URRC Act: The purposes of Review Council are to: (a) advise responsible Minister of a designated utility concerning imposition of rates and tariffs in accordance with sections11 to 18. (b) advise responsible Minister of a utility or than a designated utility with regard to any questions that responsible Minister refers to it concerning rates, tariffs and rate structures, (c) advise responsible Minister for any utility concerning any matter related to utility that is referred to it by responsible Minister on advice of Executive Council, (d) advise any Minister concerning any matter related to charges for provision of goods and services that is referred to it by Minister on advise of Executive Council, (e) advise Minister responsible for Qulliq Energy Corporation, concerning applications for permission for major capital projects under section 18.1 of Qulliq Energy Corporation Act. 3. ORGANISATION The Review Council consistss of five part-time appointed members for a term of three years. The Minister responsible for URRC appoints members of Review Council and designates one member of Review Councill as a chairr and one member as vice- chair. P age 6

7 In June of 2010 Minister responsible e for URRC re-appointed its as follows: three members Raymond Mercer Viviennee Aknavigakk Gordon Rennie Chair Member Member Subsequently, changes were made to URRC Act. It passed thoughh legislative assembly in September 2010, reby ncreasing permitted number of members to five. As a result, responsible Minister for URRC appointed two new members in addition to appointing a vice chair from among members. The URRC members were as follows: Raymond Mercer Viviennee Aknavigakk Gordon Rennie Louie Qingnatuq Graham Lock Chair Vice Chairr Member Member Member In 2011, sudden and unexpected changes occurredd to make-up of Council. This includedd following: Louie Qingnatuq. Louie passed away suddenly at his home in spring of It was extremely sad to have heard of his passing. Louie was very well valued and is greatly missed. P age 7

8 Gordon Rennie Gordon, due to personal reasons and with much reluctance tendered his resignation in month of June The URRC would like too thank Mr. Rennie for his dedication and wishes him very best for his future. Viviennee Aknavigakk Vivienne, due to circumstanc ces beyond her control had to tender her resignation in December The Council will miss her as vice chair, and wishes to thank her for her work and dedication as a council member. Ministerial Appointments In fall of 2011, Minister responsible for URRC advertised seeking candidates to fill two positions on URRC. The Minister appointed two new council members in November The two members are as follows, Joshua Curley and Robertt Kirk Janes. new Joshua Curley In January 2012, Mr. Joshua Curly resigned from URRC for personal reasons. As of January members of Raymond Mercer Graham Lock Robert Kirk Janes Temporary Members URRC are Chair Member Member as follows: The responsible Minister for URRC, on request of council, may appoint, in addition to members appointed under Subsection (1) off URRC Act, no more than two temporary members of Review Council for purpose of dealing with a P age 8

9 particula matter before Review Council and may specify terms and duties of temporary members. Temporary members were not required for this fiscal year. Executive Director The changes made to URRC Act in September 2010 also included administrator position for Review Council. changes to Under Section 3 (9), Review Council may appoint an executive director and fix terms and conditions of appointmen t. Duties off executive director are under 3 (10), executive director shall (a) keep a record of all proceedings of Review Council and have custody of all of Review Council' s records and documents; and (b) perform any or duties that may be assigned by Review Council. In October 2010, Laurie-Anne White accepted a one year transfer assignment as executive director for URRC. In September 2011, she was appointed to position indeterminately as executive director and carries out duties as outlined in URRC Act as amended. Consultants Mr. Raj Retnanandan has been retained on contract as per Section 8(1) (b) of URRC Act as an advisor to URRC. Mr. Retnanandan comes to URRC with extensive knowledge and expertisee in energy management and regulatory consultations. Mr. John Donihee has been retained as per Section 8(1)(b) of URRC Act as Legal Counsel to URRC. Mr. Donihee comes to URRC with extensive knowledgee and expertise in energy law and regulatory consultations. P age 9

10 4. BUDGET In Review Council operating and maintenance budget The Review Council remained within its budget for year. was $736, SUMMARY OF RECOMMENDATIONS: The following recommendations were made with respect to a Major Capital Project Permit Application respecting construction of a new power plant in Cape Dorset made by Qulliq Energy Corporatio on on June , URRC Report Qulliq Energy Corporation (QEC), as a designated utility, is required pursuant to Section 18.1 of Qulliq Energy Corporation Act (QEC Act), to seek approval from responsible Minister prior to undertaking a major capital project. In this regard, Section 18.1 of QEC Act provides as follows: "Definition (1) In this section, "major capital project" means a capital project cost that exceeds $5,000,000. that has a total Major capital project (2) The Corporation shall not undertake, nor permit any of its undertake, a major capital project unless it applies in advance to an order giving permission for project. subsidiaries to Minister for Minister may seek advice (3) Before responding to an application for r permission made under subsection (2), Minister may seek advice off Utility Rates Review Council established under Utility Rates Review Council Act. Corporation to provide informationn (4) The Corporation shall provide Minister and Utility Rates Review P age 10

11 Council with any information necessary for Minister to decide wher permission should be granted. What Minister may do (5) The Minister may (a) grant permissionn for undertaking major capital project, with or without conditions; or (b) refuse permission. Order (6) Permission granted by Minister under paragraph (5)(a) form of an order." shall be in In accordance with above URRC recommends: 1. Having considered foregoing matters, URRC recommends that major capital project permit approval for construction of new power plant in Cape Dorset be granted, in accordance with Application. 2. The URRC recommends prudence of cost of construction of project be examined at time project is proposed to be includedd in rate base. 3. The URRC recommends QEC be directed to address decommissioning and environmental cleanup plan for existing site as well as corresponding costs at time new Cape Dorset project is proposed to be included in rate base, and furr, that site restoration and environmental cleanup costs be included in annual amortization rates and amortization expense for regulatory purposes, following transition to Public Sector Accounting. 4. Nothing in this Report shall prejudice URRC in its consideration of any or matters respecting QEC. The following recommendations were made with respect to a Major Capital Project Permit Application respecting construction of a new power plant in Taloyoak made by Qulliq Energy Corporation on June , URRC Report P age 11

12 Qulliq Energy Corporation (QEC), as a designated utility, is required pursuant to Section 18.1 of Qulliq Energy Corporation Act (QEC Act), to seek approval from responsible Minister prior to undertaking a major capital project. In this regard, Section 18.1 of QEC Act provides as follows: "Definition (1) In this section, "major capital project" means a capital project cost that exceeds $5,000,000. that has a total Major capital project (2) The Corporation shall not undertake, nor permit any of its undertake, a major capital project unless it applies in advance to an order giving permission for project. subsidiaries to Minister for Minister may seek advice (3) Before responding to an application for r permission made under subsection (2), Minister may seek advice off Utility Rates Review Council established under Utility Rates Review Council Act. Corporation to provide informationn (4) The Corporation shall provide Minister and Utility Rates Review Council with any information necessary for Minister to decide wher permission should be granted. What Minister may do (5) The Minister may (a) grant permissionn for undertaking major capital project, with or without conditions; or (b) refuse permission. Order (6) Permission granted by Minister under paragraph (5) (a) form of an order." shall be in In accordance with above URRC recommends: P age 12

13 1. Having considered foregoing matters, URRC recommends that major capital project permit approval for construction of new power plant in Taloyoak be granted, in accordance with Application. 2. The URRC recommends prudence of cost of construction of project be examined at time project is proposed to be includedd in rate base. 3. The URRC recommends QEC be directed to address decommissioning and environmental cleanup plan for existing site as well as corresponding costs at time new Taloyoak project is proposedd to be included in rate base, and furr, that site restoration and environmental clean up costs be included in annual amortization rates and amortization expense for regulatory purposes, following transition to Public Sector Accounting. 4. Nothing in this Report shall prejudice URRC in its consideration of any or matters respecting QEC The following recommendations were made with respect to a Major Capital Project Permit Application Respecting Construction of a New Power Plant in Qikiqtarjuaq made by Qulliq Energy Corporation on June , URRC Report Qulliq Energy Corporation (QEC), as a designated utility, is required pursuant to Section 18.1 of Qulliq Energy Corporation Act (QEC Act), to seek approval from responsible Minister prior to undertaking a major capital project. In this regard, Section 18.1 of QEC Act provides as follows: "Definition (1) In this section, "major capital project" means a capital project that has a total cost that exceeds $5,000,000. Major capital project (2) The Corporation shall not undertake, nor permit any of its undertake, a major capital project unless it applies in advance to an order giving permission for project. subsidiaries to Minister for P age 13

14 Minister may seek advice (3) Before responding to an application for r permission made under subsection (2), Minister may seek advice off Utility Rates Review Council established under Utility Rates Review Council Act. Corporation to provide informationn (4) The Corporation shall provide Minister and Utility Rates Review Council with any information necessary for Minister to decide wher permission should be granted. What Minister may do (5) The Minister may (a) grant permissionn for undertaking major capital project, with or without conditions; or (b) refuse permission. Order (6) Permission granted by Minister under paragraph (5)(a) form of an order." shall be in In accordance with above URRC recommends: 1. Having considered foregoing matters, URRC recommends that major capital project permit approval for construction of new power plant in Qikiqtarjuaq be granted, in accordance with Application. 2. The URRC recommends prudence of cost of construction of project be examined at time project is proposed to be includedd in rate base. 3. The URRC recommends QEC be directed too address decommissioning and environmental cleanup plan for existing sitee as well as corresponding costs at time new Qikiqtarjuaq project is proposed to be included in rate base, and furr, that site restoration and environmental clean up costs be included in annual amortization rates and amortization expense for regulatory purposes, following transition to Public Sector Accounting. 4. Nothing in this Report shall prejudice URRC in its consideration of any or matters respecting QEC. P age 14

15 With respect to 2010/11 General Rate Application, Phase II made by Qulliq Energy Corporation, dated September 9, 2011, URRC Report In its letter dated September 9, 2011, QEC requestss following: Approving Corporation s proposed adjustments to base rates effectivee April 1, That QEC should gradually move away from different rates for each community and toward levelized rates across Territory. QEC also requests approval of: The approval of adjustments to operation of e Fuel Rate Stabilization Fund (FSR) and revisions to Terms and Conditions of Service. In accordance with above URRC recommends 1. The URRC recommends acceptancee of QEC'ss proposal to adopt a Nunavut wide Cost of Service (COS) approach for purpose of establishing rates to be implemented on April The URRC recommends acceptance of Nunavut wide COS study as proposed by QEC and as set out in Appendix A-3 of Application. 3. The URRC recommends approval of QEC's rate change proposalss as set out in Schedules to of Application, effectivee April 1, The URRC recommends adoption of changes to operation of stabilization fund described in Directions #9 and #100 of Section 10.0 of this Report. rate P age 15

16 5. The URRC recommends approval of Terms and Conditions of service as set out in URRC QEC 3-36 Attachment, subject to changes referred to under Directions #12 and #13 of Section 10.0 of this Report. 6. Nothing in this Report shall prejudice URRC in its consideration of any or matters respecting QEC. 5. CANADIAN ASSOCIATION OF MEMBERS (CAMPUT) OF PUBLIC UTILITY TRIBUNAL The URRC continued its ongoing association with CAMPUT in The membership of CAMPUT is made up of all Boards and Councils from ten provinces and three territories plus National Energy Board. CAMPUT also admitted a number of quasi-judicial boards as associate members to CAMPUT, as part of ir ongoing goal of improving all types of regulationn in Canada. A full list of CAMPUT membership can be found at end of this report. The Chair, one council member and executivee director for URRC attendedd CAMPUT Annual Educational Conference as part of Council s continuing education. This year conference was held in Vancouver r, BC in May This conference brings toger regulators, utilities from Canada, U.S. and Mexico to discuss emerging issues in electricity and gas markets. This is always a very informative and well attendedd conference; a must for regulators, utilities and ir staff to participate. The URRC attended CAMPUT annual general meeting (AGM) in September This conference brings toger member boards from across Canada to discuss events and issues that affect regulatory community. Representatives were present from all boards at meetings in Halifax, NS. The URRC was represented by chair and executive director. P age 16

17 The URRC continues to be actively involved inn various committees of CAMPUT. Raymond Mercer continued his role with Chairs Policy Committeee that provides direction to CAMPUT on major policy issues. He also is a member of Organising Committee for 2011 CAMPUT educational conference in Vancouver B.C. This group develops agenda, retains moderators and presenters for conference. Please see Appendix I for a list of CAMPUT members and its committee. 6. A LOOK AHEAD AT The World Energy Conference is being held in Canada this year; it will take place in Quebec City during month of May At same time, CAMPUT is holding a seminar for regulators and regulatory staff. The topics include 1) Energy future: Imagine 2025 and 2) relationship between politics and regulation. The URRC will be represented at this conferencee and seminar by chair and executive director. In near future URRC will apply to Minister responsible for URRC to fill two vacant positions on Council. In September of 2012, CAMPUT will hold its AGM in Saskatoon. The URRC member of CAMPUT is expected to be epresentedd at that AGM. as a P age 17

18 ON BEHALF OF THE NUNAVUT UTILITY RATES REVIEW COUNCIL DATEDD March 31, 2012 Ray Mercer, Chair P age 18

19 Appendix I CAMPUT Member Boards The current CAMPUT membership includes following federal, provincial and territorial boards and commissions: Alberta Utilities Commission British Columbia Utilities Commission Manitoba Public Utilities Board National Energy Board New Brunswick Energy and Utilities Board Newfoundla nd & Labrador Board of Commissioners of Public Utilities Northwest Territories Public Utilities Board Nova Scotia Utility and Review Board Nunavut Utility Rates Review Council Ontario Energy Board Prince Edward Island - Island Regulatory andd Appeals Commission Régie de l'énergie du Québec Saskatchew wan Rate Review Panel Yukon Utilities Board CAMPUT Associate Members Canadian Nuclear Safety Commission (CSNC) Oil and Gas Commission (OGC), British Columbia Energy Resources Conservation Board (ERCB), Alberta Bureau d'audiences publiques sur l'environnement (BAPE), Québec Canada - Nova Scotia Offshore Petroleum Board (CNSOPB) Canada - Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) Comisión Reguladora de Energía (CRE), Mexico Efficiency NB, New Brunswick P age 19

20 CAMPUT Executive Committee: The affairs of CAMPUT are directed and managed by its Executive Committee which is elected annually from Association'ss membership. The Committee comprisess Chair, Vice-Chair, Past Chair, Secretary-Treasurer, Chair of Education Committee, and Chair of Regulatory Affairs Committee. The executive director of CAMPUT provides support to Executive Committee and manages day-to-day operations of Association. Executive Committee: Name Lise Duquette Raymond Gorman, Q.C. Roland George Ken Quesnelle Maurice Rodgerson CAMPUT Board Position Chair Régie de l'énergie Past Chair Island Regulatory and Appeals Commission Telephone Vice-Chair New Brunswick Energy and Utilities Board Secretary Alberta Treasurer Utilities Commission Chair, National Regulatory Energy Affairs Board Chair, Ontario Education Energy Board Carolyn Dahl Rees (514) energie.qc.ca (506) (403) (403) (416) ontarioenergyb oard.ca (902) Terry Rochefort Executive Director (905) P age 20