Bill 46 - An Act to Amend the Electricity Act

BILL 46

An Act to Amend the Electricity Act

His Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 The Electricity Act, chapter 7 of the Acts of New Brunswick, 2013, is amended by adding the following after section 47:

Raising of funds by the Corporation

47.1( 1) In this section, “costs of financing” means

(a) in the case of raising funds under this section, including by way of a loan, all funds that the Corporation is required to collect, receive, remit or reimburse under an agreement referred to in subsection (4), except those funds that are advanced to the Corporation under this section, and the funds that the Corporation collects, receives, remits or reimburses on behalf of an entity that is a party to the agreement, including any interest and prepayment and default charges, and

(b) in the case of raising funds by way of a loan under section 44, interest and other fees and charges that the Corporation is required to pay as part of that loan, including annual costs.

47.1( 2) Subject to the approval of the Lieutenant-Governor in Council, the Corporation may raise, including by way of a loan, from an entity prescribed by regulation the funds the Corporation considers necessary to finance all or any portion of a project prescribed by regulation, and those funds shall be advanced to the Corporation.

47.1( 3) The Lieutenant-Governor in Council may give the approval referred to in subsection (2) if the Lieutenant-Governor in Council is satisfied that the costs of financing relating to raising funds under this section, including by way of a loan, are lower than if the project were financed by raising funds by way of a loan under section 44.

47.1( 4) Subject to subsection (5), the Corporation may enter into and carry out agreements with an entity prescribed by regulation for the purpose of raising funds under this section.

47.1( 5) An agreement entered into between the Corporation and an entity prescribed by regulation shall not bind the parties to the agreement unless the agreement is first approved by the Lieutenant-Governor in Council.

47.1( 6) An agreement approved by the Lieutenant-Governor in Council under this section shall be deemed to be prudent, and the advances made to the Corporation under this section and any costs of financing relating to the agreement are deemed to be prudent and necessary to carry out the agreement.

47.1( 7) For greater certainty, for the purposes of carrying out an agreement under this section, the Corporation may collect, receive, remit or reimburse funds on its own behalf and on behalf of an entity prescribed by regulation.

47.1( 8) The Board shall ensure that the advances made to the Corporation under this section that are required to be reimbursed or remitted to an entity prescribed by regulation, and the costs of financing relating to the advances, are recovered by the Corporation in accordance with the regulations, and their recovery shall be deemed to be just and reasonable for the purposes of section 103.

47.1( 9) With respect to any funds raised under this section, the Corporation is required to maintain the books and records prescribed by and in accordance with the regulations.

2 The Act is amended by adding the following after section 139.1:

Transactions between strategic partners

139.2( 1) In this section and sections 139.3 and 139.4, “transaction between strategic partners” means

(a) a transaction or series of related transactions whereby the Corporation sells, leases or otherwise disposes of all or a portion of a generation facility owned by the Corporation, and the transaction or series of related transactions may include

( i) the incorporation of a subsidiary or an affiliate of either the Corporation or the Holding Corporation,

( ii) the formation or registration of a partnership, limited partnership, joint venture or similar arrangement in order to facilitate the carrying out of the transaction or series of related transactions,

( iii) the creation of a trust or other similar legal structure,

( iv) the entering into of a power purchase agreement between the Corporation and the person who acquired ownership or possession and control of all or a portion of the generation facility,

( v) the provision of guarantees or the raising of funds required to enter into or carry out the transaction or series of related transactions, and

( vi) the entering into of any other contract or agreement necessary or incidental to entering into or carrying out the transaction or series of related transactions, and

(b) an agreement, contract or transaction, or any element of the agreement, contract or transaction, that is prescribed by regulation as being part of a transaction between strategic partners.

139.2( 2) With the approval of the Lieutenant-Governor in Council and subject to any terms or conditions that the Lieutenant-Governor in Council considers appropriate, the Corporation may enter into and carry out a transaction between strategic partners with any person.

139.2( 3) The Lieutenant-Governor in Council may give the approval referred to in subsection (2) if the Lieutenant-Governor in Council is satisfied that the transaction between strategic partners

(a) will result in an increase in the percentage of equity in the Corporation’s capital structure,

(b) will result in the Corporation or the Holding Corporation, or a subsidiary or affiliate of the Corporation or the Holding Corporation, having a legal or beneficial interest in the person who acquires ownership or possession and control of all or a portion of the generation facility that is the subject of the transaction, and

(c) will not derogate from the obligation of the Corporation to ensure the safe, adequate, secure and reliable supply of electric service within the Province.

139.2( 4) For the purposes of entering into or carrying out a transaction between strategic partners, the Corporation is required to comply with the requirements prescribed by regulation.

139.2( 5) For greater certainty, after a transaction between strategic partners is approved by the Lieutenant-Governor in Council, the Lieutenant-Governor in Council may approve any agreement, contract or transaction subsequently entered into by the parties that the Lieutenant-Governor in Council considers to be part of that transaction.

139.2( 6) Subject to subsection (7), the Corporation may enter into and carry out an agreement with any person for the purposes of entering into and carrying out a transaction between strategic partners.

139.2( 7) An agreement entered into between the Corporation and another person does not bind the parties to the agreement unless the agreement is first approved by the Lieutenant-Governor in Council.

139.2( 8) A transaction between strategic partners that is approved under this section shall be deemed to be prudent, and the costs and expenses incurred or to be incurred by the Corporation in respect of the transaction, including those costs and expenses in connection with agreements and contracts entered into as part of the transaction, shall be deemed to be prudent and necessary to enter into and carry out the transaction.

139.2( 9) When a transaction between strategic partners is approved under this section, the Board shall ensure that the Corporation recovers the costs and expenses incurred or to be incurred relating to the transaction, including the costs and expenses in connection with the agreements and contracts entered into as part of the transaction, and those costs and expenses are reflected in the rates charged by the Corporation in respect of the services referred to in section 102, and their recovery is deemed to be just and reasonable for purposes of section 103.

139.2( 10) When a transaction between strategic partners is approved by the Lieutenant-Governor in Council under this section, it is not necessary to also obtain the approval of the Lieutenant-Governor in Council referred to in subsections 2.62(1), 2.7(1) and (5) and 36(1), (6) and (7).

139.2( 11) Subsection 2.62(2) does not apply to a subsidiary incorporated as part of a transaction between strategic partners approved under this section.

Transfers relating to transactions between strategic partners

139.3( 1) For the purposes of entering into or carrying out a transaction between strategic partners, the Lieutenant-Governor in Council may make orders transferring officers, employees, assets, liabilities, rights and obligations of the Corporation or the Holding Corporation or a subsidiary or an affiliate of either to any other person.

139.3( 2) Sections 50.1 to 50.9 apply, with the necessary modifications, to an order made by the Lieutenant-Governor in Council under subsection (1).

Exemptions from other Acts

139.4( 1) For the purposes of entering into or carrying out a transaction between strategic partners, the Corporation or the Holding Corporation or a subsidiary or an affiliate of either may transfer, by agreement, assets, liabilities, rights and obligations of the Corporation, the Holding Corporation or a subsidiary or an affiliate of either, as the case may be, to any other person.

139.4( 2) The Acts or provisions of Acts prescribed by regulation do not apply to the transfers or to the types of transfers referred to in subsection (1) that are prescribed by regulation.

3 Subsection 142(1) of the Act is amended

(a) by adding the following after paragraph (e):

(e.01) for the purpose of section 47.1, respecting the funds to be raised by the Corporation, including by way of a loan, the reimbursement or remittance of advances made to the Corporation and the costs of financing relating to those advances and the recovery of the advances made to the Corporation that the Corporation is required to reimburse or remit and the costs of financing relating to those advances, including

( i) prescribing the entities from whom the Corporation may raise funds,

( ii) prescribing the projects for which funds may be raised by the Corporation,

( iii) respecting the requirements that the Corporation is required to comply with relating to the recovery or remittance of the advances made to the Corporation and the costs of financing relating to those advances,

( iv) respecting the manner in which the Corporation may recover the advances made to it that the Corporation is required to reimburse or remit and any financing costs relating to those advances, including allowing their recovery from its customers, and respecting

( A) the time period for recovery and the calculation methods that apply, and

( B) the method of recovery from the rates charged by the Corporation, including the establishment of rate riders,

( v) requiring the establishment of a regulatory account and establishing the operating parameters of the account, including

( A) the costs to be recorded in the account,

( B) the applicable accounting methods,

( C) the method of calculating costs and the deductions to be made in calculating the costs, and

( D) the rules for the application of any financing costs to the account balance,

( vi) prescribing the books and records that the Corporation is required to keep with respect to the funds advanced and their management, including applicable accounting methods,

( vii) prescribing filing requirements and reporting requirements to the Board;

(b) by adding the following after paragraph (o):

(o.01) for the purpose of section 139.2, respecting transactions between strategic partners, including

( i) prescribing the agreements, contracts or transactions, or any element of the agreements, contracts or transactions, for the purpose of paragraph (b) of the definition “transaction between strategic partners” in that section,

( ii) respecting the requirements that the Corporation is required to respect when entering into and carrying out a transaction between strategic partners, including

( A) determining the costs in relation to the transaction for which the Corporation is responsible,

( B) determining the costs in relation to the generation facility that is the subject of the transaction that the Corporation is required to continue to bear after its sale, lease or other disposition,

( iii) authorizing the recovery of costs referred to in subparagraph (ii) from customers and respecting the duties of the Board in their recovery,

( iv) authorizing the recovery of costs and expenses referred to in subsection (9) in that section,

( v) respecting the creation and maintenance by the Corporation of one or more regulatory accounts relating to transactions between strategic partners, including

( A) operating parameters for the account, including

( I) the costs to be recorded in the account,

( II) the applicable accounting methods,

( III) the method of calculating costs and the deductions to be made in calculating the costs, and

( IV) the rules for the application of any financing costs to the account balance,

( B) auditing and oversight requirements,

( C) reporting requirements for the Corporation, including the methods and manner of reporting,

( D) recovering the balance of the account from customers, including

( I) the time period for recovery and the calculation methods that apply,

( II) the method of recovery from the rates charged by the Corporation, including the establishment of rate riders,

( III) the establishment of a minimum and maximum recovery threshold, and

( IV) the allocation of the balance of the account among the various rate classes,

( vi) respecting the use or application of any proceeds received by the Corporation after the Corporation has sold, leased or otherwise disposed of a generation facility that is part of a transaction between strategic partners, and

( vii) respecting any other matter that the Lieutenant-Governor in Council considers necessary or advisable for the effective carrying out of a transaction between strategic partners;

(o.02) for the purposes of section 139.4, respecting transfers, including

( i) respecting the effects that result from or do not result from a transfer by agreement under that section,

( ii) establishing requirements that the Corporation must meet and the procedure that it must follow to make the transfers,

( iii) prescribing the transfers or types of transfers that are exempt from the Acts or provisions of Acts, subject to any conditions or restrictions prescribed by the regulations, and

( iv) prescribing the Acts or provisions of Acts that do not apply to transfers by agreement under that section, subject to any conditions or restrictions prescribed by the regulations;