Category: Natural Gas

Attached is the  October 23, 2014 Provincial News Release on the proposed changes to legislation to repeal Section 7(5) of the Vancouver Island Natural Gas Pipeline Act in order to permit collection of operating fees within the AVICC region.

AVICC is very pleased to advise that all 26 of our municipal members, who are served by gas, have approved the model natural gas operating agreement that will authorize the collection of a 3% operating fee beginning in March 2015.  The immediate response to AVICC’s request for action is appreciated.  Thank you to Paul Murray, CAO of Saanich and Jerry Berry, Consultant with FortisBC and the municipal staff who have worked diligently to get these agreements in place.

The paperwork is now being processed through FortisBC to prepare an application to BC Utilities Commission (BCUC) to approve the agreements. By having all 26 agreements signed, AVICC can present a unified position to the BCUC.

Past President Chair Stanhope updated delegates to the AVICC Luncheon held during the 2014 UBCM Convention on the status of the Natural Gas Operating Agreement file.

Following are the speaking notes from that presentation:

I have some important information to deliver with respect to the Fortis BC Operating Agreements and the collection of operating fees by municipalities.

The last several years now we have stood before the AVICC convention and talked about the following:

  1. Negotiations with Fortis BC to establish a Made-in-AVICC Operating Agreement between the gas company and many AVICC municipalities. This is complete.
  2. Fortis BC’s application to the British Columbia Utilities Commission to apply for a common rate for specified natural gas customers in a given rate class throughout BC. This has occurred, and phased implementation is about to begin in 2015.
  3. AVICC has been seeking a change to the Vancouver Island Natural Gas Pipeline Act to permit the collection of operating fees within AVICC. AVICC representatives are meeting with the Premier and the relevant Ministers again tomorrow, and we are pleased to say that introduction of this legislation is imminent.


Consequently, I am very pleased to be able to say today, that after much hard work by numerous people, we are poised to see the end of this historic inequity after more than 25 years. Shortly we expect municipalities on Vancouver Island and the Sunshine Coast will return to the same footing as those in the interior of BC.

This means In the order of $3.5 Million in new revenues to be received collectively / per annum within AVICC to offset costs for municipal taxpayers’ associated with the placement of gas lines in municipal roads.

 Now, as the final step to reaching our goal, we need political action and your leadership.

 Time is now of the essence to adopt agreements, if Councils wish to access the available new funding source. Councils in municipalities served by gas will be asked to process and endorse the AVICC recommended model agreement by the end of October, 2014 in order to take advantage of the anticipated legislation, and to authorize the collection of the 3% fee beginning in March 2015.

 AVICC is preparing a standard report format to assist your staff in bringing this matter before you and the report will be available, along with our partners in FORTIS, to respond to any questions you may have. Representatives are meeting with the CAOs tonight to discuss implementation details for your municipality.

We hope we will have the maximum number of agreements in place by November, in order that AVICC can present a unified front to the BCUC.

We are almost there.  With your help, we can shortly say that we have completed the strategic task we set out to accomplish.

I want to say thank you to the City of Nanaimo, in particular, who lead the staff technical working group; to Paul Murray and the District of Saanich who have lead the staff policy group; to Gord Schoberg and Carol Greaves of FORTIS, and to Jerry Berry who have worked with us throughout and whom have helped us “stick handle” this matter through the Province and through FORTIS itself.

Finally, I would be remiss if I didn’t thank Premier Clark, Minister Coleman, Minister Bennett and Michelle Stillwell for supporting introduction of the corrective legislation.

Paul Murray, Administrative Officer with District of Saanich and Chair of the AVICC CAO Natural Gas Working Group and Jerry Berry, FortisBC’s Consultant provided an update to AVICC Executive on September 10, 2014 which included the following key points:

  • Word has been received that during the fall legislative session the provincial government is expecting to consider revisions to the legislation to facilitate eligible AVICC local governments to be able to begin receiving operating fees. The consultant noted that as a separate issue from the coordinated work undertaken over the years between AVICC and FortisBC, the status quo for five major island industrials is being maintained by including a regulation exempting the five major industrials on the island from paying operating fees leaving an inequity within this group as industrials elsewhere in the province will continue to pay operating fees.
  • The schedule of reductions in gas rates was highlighted noting that the 20-25% rate reduction would be phased in over 3-4 years with the first one of 7% being effective January 1, 2015.
  • The first opportunity to apply operating fees would be March 1, 2015.
  • There has been one minor change to the operating agreement template that was distributed previously. A template staff report, policy paper and the template operating agreement will be forwarded to the 20 affected local governments in October encouraging local governments not to delay in getting them signed so that they are in position to implement operating fees as soon as all the pieces are in place.

FortisBC’s Application for Reconsideration and Variance of the February 25, 2013 BC Utilities Commission (BCUC) Decision Regarding Common Rates, Amalgamation and Rate Design Application and Need for Legislative Changes to Support Operating Fees – In follow-up to the presentation at the 2013 AVICC AGM & Convention, an Impacts of BCUC Decision Update has been developed to enable members to discuss this issue with newly elected MLA’s. The impact on our communities and region is significant. The City of Nanaimo has developed a template spreadsheet to assist staff in preparing some locally relevant statistics. A copy is available by email request to AVICC registered as intervener in the BCUC Phase 2 proceedings. To effectively contribute, AVICC hired Anthony Pullman a former BCUC commissioner to prepare our submissions. An Information Request was submitted on July 24 with FortisBC reply on August 13, 2013 [PDF]. Executive will be meeting with the Premier, Honourable Bill Bennett, Minister of Energy and Mines and Minister Rich Coleman, Minister for Natural Gas during the UBCM Convention to discuss this issue. The pro-forma operating agreement template has been released by the legal advisors and will be reviewed by the Municipal Working Group on October 17.

Webinar – December 4th, 2013 – Municipal Operating Fees: Completion of Joint Discussions – Model Operating Agreement

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