ARCHIVED - Review of Amendments to the National Energy Board Cost Recovery Regulations

This page has been archived on the Web

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Review of Amendments to the National Energy Board Cost Recovery Regulations [PDF 249 KB]

Review of Amendments to the National Energy Board Cost Recovery Regulations

1 January 2010

 

Historical Background

    • Project to review and amend Regulations initiated after discussions with electricity industry and letter sent to Board 31 March 2004 by 5> companies
    • NEB consultation process - 2004/2005
    • Research options - 2005
    • Developed concept - 2005/2006
    • Additional consultation - 2006
    • Drafted amendments - 2006/2007/2008
    • Regulatory implementation process
    • Final* product - Amendments effective 1 January 2010

 

Amendments to the National Energy Board Cost Recovery Regulations
- 1 January 2010

  • Major features
    • Cost recovery shifts to international and interprovincial power line companies from electricity exporters
    • Mechanics of cost recovery now align more closely with oil and gas pipelines

 

 

Company Classification

    • Retain concept of company classification according to size
    • Use only 2 size-related categories as recommended by industry
    • Intermediate eliminated - leaving small and large categories
    • Small company will be defined as a company transmitting less than 50,000 MW.h of power in a year

 

Company Classification (continued)

    • Small companies - continue to pay fixed levy - $500 p.a.
    • All remaining regulated IPLs will be classified as large
    • Large companies - levies will be proportional to activity
    • Border accommodation classification disappears from cost recovery
    • However, companies transmitting less than 0.5 MW.h of power annually pay no levy

 

Levy on Newly Regulated IPLs

    • Sec. 5.3 applies to power lines in the same manner as sec. 5.2 applies to oil and gas pipelines
    • Payable by IPL companies not previously regulated  by NEB
    • Set at 0.2% of capital cost as estimated by the Board in issuing the initial certificate/permit
    • Applies upon approval of certificate/permit
    • Payment due 90 days after invoice date

 

Cost Recovery from IPLs

    • The electricity commodity recoverable cost pool will continue to be determined as in the past
    • Pool will now be shared by IPLs instead of electricity exporters
    • Measurement parameter for sharing costs among IPLs
      • MW.h transmitted by each regulated IPL (exports + imports)
    • Will now require IPLs to report activity - MW.h transmitted
    • For cost recovery, will require aggregate annual data:
      • forecasts of activity for upcoming year
      • actual activity for previous year

 

Cost Recovery from IPLs (continued)

    • The actual pool of costs to be shared by large companies will be determined as follows:
      • Calculate commodity recoverable cost pool using present methodology
        • Deduct: Fees levied in the year on newly regulated IPLs
        • Deduct: Annual fixed levies charged to small companies ($500 per company)
      • Equals: Pool of costs to be shared by large IPLs
    • No longer use 4 year aggregate of volumes for calculation of levy

 

Cost Recovery from IPLs (continued)

    • Will continue process of invoicing on an estimated basis for the year
    • After the year has concluded, results will be audited
    • Adjustments, if any, are factored into next billing cycle

 

Transitional Provisions

    • Forecast of transmissions by power line companies due 15 February 2010
    • Estimate of levies payable and invoice issued by 31 March 2010
    • Invoice payable in full by 15 May 2010
    • Normal cost recovery cycle will begin in June/July of this year

 

Other Amendments

    • A number of “housekeeping” amendments were included in the current changes
    • Included changes to definitions relating to oil and gas
    • Clearer wording in other sections

 

For more information

For more detailed information:

Cost Recovery, Financial Governance & Control Analyst
National Energy Board
E-mail: Cost.Recovery@neb-one.gc.ca
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663

Date modified: