In a recent
decision, the British Columbia Utilities Commission (BCUC)
found that the operator of a propane distribution system within a
strata development should be considered to be a "public
utility," subject to regulation by the BCUC. This means that
the rates charged for propane distribution must be approved by the
BCUC, unless the operator can convince the BCUC that it qualifies
for an exemption from regulation.
Superior Propane (Superior) supplies, distributes and meters
propane to individual units at a strata development called
"Seascapes." The propane is delivered in liquid form, and
then vaporized and distributed to the units, through a distribution
system constructed by Superior. The unit owners are invoiced
according to their consumption. The arrangement between Superior
and Seascapes is governed by contract, and there are individual
agreements between Superior and unit owners.
The BCUC case began with complaints about the supply of propane
at Seascapes that were received from a resident and property
manager. This led the BCUC to consider whether Superior is
operating as a "public utility." If Superior is found to
be a "public utility," then it is subject to regulation
under the Utilities Commission Act (the Act), unless Superior
can establish that it ought to be exempt. Among other things,
regulation under the Act requires that the rates charged for
distribution be approved by the BCUC as being "just and
Under the Act, a "public utility" includes a person
who owns or operates facilities for the sale, delivery or provision
of any agent for the production of heat or power. However, a
"public utility" does not include a person who is engaged
in the "petroleum industry." All parties (Superior, the
BC Ministry of Energy and Mines and Seascapes) agreed that Superior
is prima facie a "public utility," but there was
a debate as to whether Superior is engaged in the "petroleum
industry" and therefore exempt from being treated as a
"public utility." The BCUC decided that propane in its
gaseous form is not considered to be a "petroleum
product," and therefore the delivery and sale of propane gas
is not included in the definition of "petroleum
industry." In the result, the BCUC decided that Superior meets
the definition of "public utility" and is providing a
regulated service at Seascapes.
The BCUC declined to consider whether there is a need for
Superior to be regulated as a public utility. Instead, the BCUC
offered Superior the option to seek an exemption from regulation.
If Superior does not pursue that option (or if its request is
unsuccessful), then Superior has been ordered by the BCUC to apply
for approval of its rates for utility service.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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