BILL NO. 14

(as introduced)

2nd Session, 62nd General Assembly
Nova Scotia
63 Elizabeth II, 2014

Government Bill

Gas Distribution Act
(amended)

The Honourable Andrew Younger
Minister of Energy

First Reading: October 2, 2014

(Explanatory Notes)

Second Reading: October 7, 2014

Third Reading: October 30, 2014 (LINK TO BILL AS PASSED)

Clause 1

(a) adds definitions of "exempt gas customer" and "exempt gas-delivery system";

(b) updates the definitions of "gas", "gas delivery system" and "Minister"; and

(c) adds an interpretive provision that explains when two exempt gas customers are "closely related" to each other.

Clause 2 provides for a review, within five years of its coming into force, of the legislative and regulatory framework for the distribution of natural gas in Nova Scotia.

Clause 3

(a) prohibits a franchise holder from delivering gas except in accordance with its franchise (e.g., prohibiting a franchise holder from operating an exempt gas-delivery system); and

(b) allows a franchise holder who is already operating an exempt gas-delivery system when these amendments come into force to continue to do so, subject to a right to apply to the Nova Scotia Utility and Review Board to convert its exempt gas-delivery system, or any part of it, into a (regulated) gas delivery system permitted to be operated under its franchise.

Clause 4 allows a person, on application, to be declared to be an exempt gas customer if the franchise holder with the exclusive right to supply gas to the person is unlikely to be able to deliver gas to the person within a reasonable period and if the Board considers it to be in the public interest to do so.

Clause 5

(a) limits the requirement that a gas marketer possess a licence to marketers of natural gas; and

(b) provides that no licence is required to market natural gas to a prospective exempt gas customer.

Clause 6 adds regulation-making powers to support the definitions of "exempt gas-delivery customer" and "exempt gas-delivery system" and the determination of whether an exempt gas customer is closely related to another exempt gas customer.

1 Section 3 of Chapter 4 of the Acts of 1997, the Gas Distribution Act, as amended by Chapter 18 of the Acts of 2002, is further amended by

(a) adding "(1)" immediately after the Section number;

(b) adding immediately after clause (a) the following clauses:

(aa) "exempt gas customer" means a person
(i) to whom gas for ultimate consumption is delivered
(A) outside a franchise area,

(B) within a franchise area, from a supplier who has delivered gas to that person on a continuous basis since immediately before the franchise was granted,

(C) within a franchise area, if the gas being delivered is liquefied petroleum gas and the gas delivered by the franchise holder is natural gas, or

(D) within a franchise area, if the gas being delivered is natural gas and the gas delivered by the franchise holder is liquefied petroleum gas,

(ii) who is declared by the Board under Section 23 to be an exempt gas customer, or

(iii) who is prescribed by the Governor in Council to be an exempt gas customer;

(ab) "exempt gas-delivery system" means any compressor station, decanting station, pipe, equipment, apparatus, mechanism, machinery, instrument or ancillary facility, or any building or structure that houses or protects any of the foregoing, used to deliver gas for ultimate consumption
(i) to an exempt gas customer at a single location, or

(ii) in such circumstances as may be prescribed by the Governor in Council, to an exempt gas customer, or two or more closely related exempt gas customers, at multiple locations;

(d) adding immediately after subclause (c)(i) the following subclause:

(ia) liquefied petroleum gas, or

(d) "gas delivery system" means any compressor station, decanting station, pipe, equipment, apparatus, mechanism, machinery, instrument or ancillary facility, or any building or structure that houses or protects any of the foregoing, used to deliver gas for ultimate consumption, but does not include an exempt gas-delivery system;

(g) adding the following subsection:

(2) An exempt gas customer is closely related to another exempt gas customer if

(a) they are affiliates within the meaning of subsection 2(2) of the Companies Act; or

(b) the relationship between them is prescribed by the Governor in Council as being a close relationship.

2 Section 3A of Chapter 4, as enacted by Chapter 18 of the Acts of 2002, is amended by adding immediately after subsection (2) the following subsection:

(3) Within five years of the coming into force of this subsection, the Minister shall undertake a review of the legislative and regulatory framework for the distribution of gas in the Province.

3 Chapter 4 is further amended by adding immediately after Section 4 the following Sections:

4A Subject to subsection 4B(1), no franchise holder shall deliver gas for ultimate consumption to any person except pursuant to a franchise.

4B (1) A franchise holder who, immediately before the coming into force of this Section, is delivering gas by an exempt gas-delivery system may continue to deliver gas by the exempt gas-delivery system after the coming into force of this Section.

(2) Where a franchise holder continues to deliver gas by an exempt gas-delivery system as permitted pursuant to subsection (1), the franchise holder may, at any time, apply to the Board to amend its franchise to permit the franchise holder to operate the exempt gas-delivery system, or any portion of it, as part of the franchise holder's gas delivery system.

(3) Where an application is made pursuant to subsection (2), the Board may amend the franchise to permit the franchise holder to operate the exempt gas-delivery system, or any portion of it, as part of the franchise holder's gas delivery system, subject to such terms and conditions as the Board considers appropriate.

(4) For greater certainty, upon the Board amending a franchise to permit the franchise holder to operate an exempt gas-delivery system, or any portion of it, as part of the franchise holder's gas delivery system, the exempt gas-delivery system or the portion of it, as the case may be, ceases to be an exempt gas-delivery system.