ARCHIVED - Process for Amending the Cost Recovery Regulations

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The National Energy Board (NEB) has completed the process for amending the National Energy Board Cost Recovery Regulations as they relate to the allocation of costs within the electricity industry.

The amendments arose from a 2004 request from several members of the electricity industry for a review of the cost recovery methodology for the electricity industry. Changes in the structure of the Canadian electricity industry had resulted in a separation of the transmission function from generation, distribution and marketing, including exporting. The existing Regulations allocated recoverable costs attributable to regulation of the electricity industry to electricity exporters. The amended Regulations instead recover NEB costs attributable to regulation of the electricity industry from power line companies, thus resulting in a more equitable cost recovery structure while retaining the existing attribution and recovery mechanisms

Starting in 2005, the NEB engaged regulated companies, industry associations and potentially interested parties about the issue, options, criteria for evaluation of options and proposed amendments. Engagement activities have included letters, workshops and meetings and opportunities to provide comment on the proposed amendments. Below is all public information related to the process.

December 2009. Publication: Canada Gazette, Part II

The Regulations Amending the National Energy Board Cost Recovery Regulations were published in the 9 December 2009 Canada Gazette, Part II, and come into force on 1 January 2010. The substantive changes in the amended Regulations affect regulated electricity companies only. They require that costs currently recovered from electricity exporters be instead recovered from NEB-regulated power line companies that transport electricity. Each company is allocated a levy based on the amount of energy that it transmits. There will also be a levy on newly approved power line companies equal to 0.2% of the capital cost to construct the applied-for facilities.

August 2009. Pre-publication: Canada Gazette, Part I

The draft of the Regulations Amending the National Energy Board Cost Recovery Regulations was pre-published in Part I of the Canada Gazette on 8 August 2009 with a one month review period to 8 September 2009. Following are the written comments submitted during the Canada Gazette, Part I, review period.

A discussion of the comments received is available in the Regulatory Impact Assessment Statement published on the Canada Gazette Website, Part II: Official Regulations, Wednesday, December 9, 2010, Vol. 143, No. 25.

Electricity Cost Recovery Concept Development and Review (2005-2006)

The Board has received the following comments in relation to the Electricity Cost Recovery Concept:

The Board is pleased to present the proposed cost recovery concept for the electricity sector. Written comments on the concept shall be filed with the Secretary of the Board by 20 February 2006.

Information Session 19 January 2006

National Energy Board Electricity Cost Recovery Workshop - Summary of Workshop Discussion - 2 June 2005

Electricity Cost Recovery Alternatives

The NEB engaged Chymko Consulting Ltd. as a cost recovery consultant to provide assistance in a review of the NEB's electricity cost recovery regulations. As part of the project, Chymko Consulting was asked to research electricity cost recovery methodologies of other countries and Canadian jurisdictions and provide a written report to that effect. The report is titled Electricity Cost Recovery Alternatives [PDF 515 KB].

2 June 2005 Workshop Presentations and Documents

Background Information

Useful links

Cost Recovery

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