Legislative Assembly of New Brunswick
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An Act to Amend the Gas Distribution Act, 1999

Legislature :
55
Session :
3
Bill No. :
28
Member :
Hon. Fitch
First Reading :
2005-12-22
Second Reading :
2005-12-23
Committee of the Whole :
2006-4-13
Amended :
Third Reading :
2006-4-13
Royal Assent :
2006-4-13
Download PDF :
Bill 28

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



1                           Section 1 of the Gas Distribution Act, 1999, chapter G-2.11 of the Acts of New Brunswick, 1999, is amended



(a)               by adding the following definitions in alphabetical order:



"liquefied natural gas franchise" means a franchise granted for distribution of gas under subsection 6.1(1);



"liquefied natural gas plant" means a plant whose components are used to store liquefied natural gas and which may also be used to condition, liquefy or vapourize natural gas;



(b)               in the definition "gas distributor" by adding ", a liquefied natural gas franchise" after "a general franchise";



(c)               in the definition "general franchise" by adding ", liquefied natural gas franchises" after "single end use franchises";



(d)               in the definition "low volume consumer" by striking out "fifty thousand cubic metres" and substituting "two thousand gigajoules".



2                           Section 5 of the Act is amended



(a)               in subsection (1) by adding ", a liquefied natural gas franchise" after "local gas producer franchise";



(b)               in subsection (2) by adding ", a liquefied natural gas franchise" after "local gas producer franchise";



(c)               in subsection (3) by striking out "Subject to subsection 11(1)" and substituting "Subject to subsections 11(1) and 11.1(2)".



3                           The Act is amended by adding after section 6 the following:



6.1(1)             Where a person submits an application for a liquefied natural gas franchise to the Board to distribute gas and to offer a customer service within a gas distributor's general franchise, the Board may authorize the applicant to do so where the Board is satisfied that



(a)               the applicant meets one of the requirements set out in subsection (2) in respect of a liquefied natural gas plant located in New Brunswick,



(b)               each facility to which gas from the liquefied natural gas plant is delivered will consume, on average, more than 2000 gigajoules of gas per day,



(c)                each facility to which the gas is delivered is located within the same municipality or rural community in which the liquefied natural gas plant is located,



(d)               each facility to which the gas is delivered receives the gas directly from a pipeline owned, operated or leased by the applicant, a corporation affiliated with the applicant or



(i)         a corporation in which the applicant, or a corporation affiliated with the applicant, beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares that carry at least 5% of the voting rights under all circumstances or by reason of an occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase such shares or such convertible securities, or



(ii)       a partnership or limited partnership in which the applicant, or a corporation affiliated with the applicant, has at least a 5% interest,



(e)                each facility to which the gas is delivered is owned by the applicant, a corporation affiliated with the applicant or



(i)         a corporation in which the applicant, or a corporation affiliated with the applicant, beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares that carry at least 5% of the voting rights under all circumstances or by reason of an occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase such shares or such convertible securities, or



(ii)       a partnership or limited partnership in which the applicant, or a corporation affiliated with the applicant, has at least a 5% interest, and



(f)                if the facility to which the gas is delivered also receives gas under a single end use franchise agreement, that such agreement will not be terminated as a result of the facility receiving gas from the applicant.



6.1(2)             An applicant for a liquefied natural gas franchise shall meet one of the following criteria:



(a)               the applicant is the owner of a liquefied natural gas plant;



(b)               if the owner of the liquefied natural gas plant is a corporation, the applicant, with respect to that corporation, beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares that carry at least 5% of the voting rights under all circumstances or by reason of an occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase such shares or such convertible securities;



(c)                if the owner of the liquefied natural gas plant is a partnership or limited partnership, the applicant has at least a 5% interest in the partnership.



6.2(1)             A person who owns a liquefied natural gas plant in New Brunswick may apply to the Board to connect a pipeline from the plant with the gas distribution system of a gas distributor in order to sell gas either to the gas distributor or to a customer or to access a transmission line.



6.2(2)             The Board may authorize the applicant to connect the pipeline referred to in subsection (1) where it is satisfied that



(a)               the customers of the gas distributor would not be materially prejudiced by authorizing the applicant to connect the pipeline with the gas distributor's gas distribution system, and



(b)               the applicant will meet the gas distributor's standards for gas quality and pressure.



4                           Subsection 9(1) of the Act is amended by striking out "and the Board shall do so at least every seven years".



5                           Section 10 of the Act is amended by adding after subsection (1) the following:



10(1.1)          Notwithstanding subsection (1), a renewal or extension of the general franchise agreement by the Minister under section 11.1 is not subject to the approval of the Board.



6                           Subsection 11(1) of the Act is amended by striking out "Where the term of a franchise agreement" and substituting "Where the term of a franchise agreement, other than a general franchise agreement,".



7                           The Act is amended by adding after section 11 the following:



11.1(1)          The Minister, with the approval of the Lieutenant-Governor in Council, may renew a general franchise agreement or extend its term at any time during the term of the agreement.



11.1(2)          A renewal or extension under subsection (1) may be less than or exceed twenty years.



11.1(3)          The Minister may assess a franchise renewal fee and require the gas distributor whose general franchise is renewed to pay it.



11.1(4)          The Minister or the general franchisee may refer a proposed renewal or extension of the general franchise agreement under subsection (1) to the Board for its recommendations.



8                           Section 13 of the Act is amended



(a)               by repealing subsection (1) and substituting the following:



13(1)               Subject to subsection (1.1), an application for a single end use franchise made to the Board under subsection 5(1) shall be decided by the Board and the grant of the franchise is subject to such terms and conditions as the Board considers necessary in the public interest.



(b)               by adding after subsection (1) the following:



13(1.1)          The Board may grant a single end use franchise only if



(a)               the franchise applied for is in an area not actually serviced by the holder of the general franchise, and



(b)               the Board is satisfied, after considering the factors prescribed by regulation, that it is not economically feasible for the holder of the general franchise to extend a gas distribution service to the applicant at that time.



9                           Subsection 57(2) of the Act is amended by striking out ", by-laws".



10                        Paragraph 66(1)(c) of the Act is amended by adding "or the holder of a liquefied natural gas franchise" after "local gas producer".



11                        Section 69 of the Act is amended



(a)               by renumbering the section as subsection 69(1);



(b)               by adding after subsection (1) the following:



69(2)               For the purposes of subsection (1), the requirements imposed on a gas distributor insofar as they relate to a gas marketer apply only in respect of those activities carried on by the gas marketer as described in paragraphs 58(1)(a), (b), (c) and (d).



12                        Subsection 95(1) of the Act is amended by adding after paragraph (o) the following:



(o.1)          prescribing factors for the purposes of paragraph 13(1.1)(b);



13                        Subsection 96(3) of the Act is amended by striking out "a regulation" and substituting "any regulation or any provision of a regulation".



COMMENCEMENT

14                        This Act or any provision of it comes into force on a day or days to be fixed by proclamation.



EXPLANATORY NOTES



Section 1



(a)               New definitions are added.



(b)               The existing definition is as follows:



"gas distributor" means a person owning, operating, managing or controlling a gas distribution system and who has been granted a general franchise or a local gas producer franchise under the former act or this Act to distribute gas to customers in the Province, and includes a person to whom the rights and obligations under a franchise agreement have been assigned;



(c)                The existing definition is as follows:



"general franchise" means a franchise to distribute gas and provide customer services in the whole of the Province, subject to single end use franchises and local gas producer franchises that have been or may be granted under the former act or this Act, and subject to any order of the Board made under subsection 9(2);



(d)               The existing definition is as follows:



"low volume consumer" means a person who consumes no more than fifty thousand cubic metres of gas per year;



Section 2



These amendments are consequential to the amendment in section 3 of this amending Act.



Section 3



New provision.



Section 4



The existing provision is as follows:



9(1)                   The Board has full authority and jurisdiction to inquire into, determine and report to the Lieutenant-Governor in Council on whether a gas distributor has breached a material term or condition of a franchise agreement and the Board shall do so at least every seven years.



Section 5



New provision.



Section 6



The existing provision is as follows:



11(1)               Where the term of a franchise agreement has expired or will expire within one year, the Board may renew the franchise agreement or extend its term for such a period of time and upon such terms and conditions as it considers necessary in the public interest.



Section 7



New provision.



Section 8



(a)               The existing provision is as follows:



13(1)               An application for a single end use franchise made to the Board under subsection 5(1) shall be decided by the Board in a summary manner, subject to such terms and conditions as it considers necessary in the public interest.



(b)               New provision.



Section 9



The existing provision is as follows:



57(2)               Before delivering gas to any building, a gas distributor or its agent shall inspect the installations there and satisfy itself that they comply with all applicable statutes, by-laws and regulations and are tight and safe to use.



Section 10



The existing provision is as follows:



66(1)               The Board may make rules …



(c)                establishing conditions of access to gas distribution and customer services provided by a gas distributor or by persons other than a local gas producer;



Section 11



(a)               Section 69 is renumbered as subsection 69(1).



(b)               New provision.



Section 12



Regulation-making authority is expanded.



Section 13



The existing provision is as follows:



96(3)               The Board may, by order made on such terms and conditions as it considers appropriate, exempt a gas distributor or person from the application of a regulation made under subsection (1).



Section 14



Commencement provision.

 

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