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Home > Cost Recovery > Cost Recovery - Questions and Answers - 28 April 2010

Cost Recovery - Questions and Answers

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Cost Recovery

1. Q. What does cost recovery mean at the NEB?
  A. The National Energy Board Act (Section 24.1) authorizes the NEB to recover costs attributable to its responsibilities.
2. Q. What costs does the NEB recover?
  A. The National Energy Board Cost Recovery Regulations (the Regulations) and an order of the Board respecting costs incurred in frontier areas define what costs are to be recovered. Generally, these include NEB operating costs, the cost of services provided to the NEB and paid for by other government departments but, exclude costs incurred by the NEB in connection with activities in frontier areas. Frontier activities relate to work undertaken by the NEB under the authority of the Canada Oil and Gas Operations Act and the Canada Petroleum Resources Act.
3. Q. How does cost recovery work at the NEB?
  A. The Regulations set out the manner in which cost recovery levies are determined and invoiced to cost recovered entities.

National Energy Board Cost Recovery Regulations (SOR/91-7)

In summary:

From June to August of each year, the NEB gathers information required to determine estimated recoverable costs and the estimated amount of levies to be charged to companies regulated by the NEB.

During September, all calculations required to estimate cost recovery levies for the upcoming year are carried out. Also, calculations required to determine the actual charge for the previous year are carried out.

By September 30 of each year, letters of notification are issued to large companies advising them of the amount of their bill payable for the coming year. The amount of the bill is the sum of the estimated levy for the coming year and the difference between the estimated and actual levy for the previous year. At the same time, oil and gas pipeline companies are also invited to apply for relief from full payment of cost recovery levies providing they are eligible under the provisions of Section 4.1 of the Regulations.

During October and November, applications for relief from oil and gas pipeline companies are received, reviewed and approved. If relief is granted to any company, estimated cost recovery levies for large companies are re-calculated in accordance with the provisions of Section 14.1 of the Regulations.

By the end of December, oil and gas pipeline companies who have applied for relief are notified of the Board's decision on their application. All large oil and gas pipeline companies are notified of their revised estimated cost recovery levies resulting from relief granted to eligible companies.
4. Q. Each year, the NEB issues letters requesting information in connection with cost recovery. Is it necessary to respond to these requests?
  A. The annual requests for information are made under the authority of the Regulations. The information is required to properly execute cost recovery work under the Regulations and every company must submit the information requested of them. Requests are issued by July 31 and the due date for submission is August 31 as stipulated by the Regulations.
5. Q. How can information requested by the Board be submitted?
  A. The Board offers three options for submitting information in connection with the annual request.

  • The response may be e-mailed to an NEB mailbox established for this purpose:
    CRdatasubmit@neb-one.gc.ca

    Data may be handwritten on the template provided in the letter of request and returned as a pdf attachment or, an Excel worksheet may be created and attached to the e-mail. Be sure to identify your company name on any e-mail submissions and attachments.

    Note: The NEB's e-file facility should not be used for submitting cost recovery data.
  • The response may be mailed using regular postal service to:

    National Energy Board
    444 Seventh Avenue SW
    Calgary, Alberta T2P 0X8

    and directed to the attention of the contact named in the letter of request.
  • The response may faxed to the attention of the contact named in the letter of request.
6. Q. Who is subject to cost recovery?
  A. The NEB Act, in section 24.1(1)(a) authorizes the Board to impose fee, levies or charges on:

"... any person or company authorized under this Act to

  • construct or operate a pipeline or an international or interprovincial power line,
  • charge tolls
  • export or import oil or gas, or
  • export electricity ..."
The National Energy Board Cost Recovery Regulations (amended 1 January 2010) in sections 4(1)(2)(3)(4) and 5.1(1)(2), set out that large oil, gas and commodity pipelines, large international and interprovincial power line companies, intermediate oil, gas and commodity pipeline companies, small oil, gas and commodity pipeline companies and small international and interprovincial power line companies, shall pay cost recovery charges as provided in the Regulations. The Regulations go on to describe the manner in which cost recovery levies will be determined for each of these entities.
7. Q. How are payments for cost recovery made?
  A. After cost recovery levies have been determined, companies will be invoiced for their levies during the year to which the levy applies.

Companies classified by the Regulations as large companies, will be invoiced at the end of each calendar quarter. Each invoice will be for one quarter of the annual estimated amount of their billing.

Companies classified by the Regulations as small or intermediate, will be invoiced on June 30 for the entire year.

Note: Transitional provisions in effect for the year 2010 require that large international and interprovincial power line companies pay their estimated 2010 levy in a single installment due 15 May 2010.

All payments must be payable to the Receiver General for Canada and sent to:

National Energy Board
444 Seventh Avenue SW
Calgary, Alberta T2P 0X8

All remittances must be in Canadian funds.

It is important that payments be made in accordance with these instructions (these instructions also appear on every invoice). If payments are sent to another address, made out to another payee or remitted in non-Canadian funds, the company's account will not be properly credited and will become subject to late payment penalties.

Late payments are subject to interest charges on outstanding amounts in accordance with Section 20(4) of the regulations.

For more information

If you just need someone to talk to:

Dan Philips
Conseiller financier principal
Office national de l'énergie
Courriel : dan.philips@neb-one.gc.ca
Téléphone : 403-299-7884
Téléphone (sans frais) : 1-800-899-1265
Télécopieur : 403-292-5503
Télécopieur (sans frais) : 1-877-288-8803
ATS (téléimprimeur) : 1-800-632-1663

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Date Modified:
2012-02-02