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Statutes of Newfoundland and Labrador 2012


CHAPTER 42

AN ACT TO AMEND THE CHURCHILL FALLS (LABRADOR) CORPORATION LIMITED (LEASE) ACT, 1961 AND THE ELECTRICAL POWER CONTROL ACT, 1994

(Assented to December 22, 2012)

Analysis


              THE CHURCHILL FALLS (LABRADOR) CORPORATION LIMITED (LEASE) ACT, 1961

        1.   S.7 Amdt.
The Public Utilities Act, 1964, not to apply in certain cases

 

 

 

              ELECTRICAL POWER CONTROL ACT, 1994

        2.   S.3 Amdt.
Power policy

        3.   S.5.1 R&S
Direction to board

        4.   Ss.5.8 and 5.9 Added
5.8   Act to apply
5.9   The Churchill Falls
        (Labrador) Corporation
        Limited (Lease)
        Act, 1961


Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

THE CHURCHILL FALLS (LABRADOR) CORPORATION LIMITED (LEASE)
ACT, 1961

SNL1961 c51
as amended

        1. Section 7 of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961 is amended by renumbering it as subsection 7(1), and by adding immediately after that subsection the following:

             (2)  Paragraph (1)(a), subparagraph (1)(b)(iii) and paragraph (1)(c) shall cease to apply on January 1, 2015.

             (3)  Subparagraph (1)(b)(ii) shall cease to apply as of January 1, 2015 in respect of an amount of electrical energy and capacity equal to 225,000 kW at 100% load factor at the 230 kV busbar located at the Churchill Falls (Labrador) Corporation Limited switchyard in Churchill Falls, but in all other respects that subparagraph shall remain in effect.

ELECTRICAL POWER CONTROL ACT, 1994

SNL1994 cE-5.1
as amended

        2. Paragraph 3(a) of the Electrical Power Control Act, 1994 is amended by deleting the word "and" at the end of subparagraph (iii), by deleting the semi-colon at the end of subparagraph (iv) and substituting a comma and the word "and", and by adding immediately after that subparagraph the following:

                     (v)  should promote the development of industrial activity in Labrador;

 

        3. Section 5.1 of the Act is repealed and the following substituted:

Direction to board

      5.1 Notwithstanding sections 3 and 4 of the Act and the provisions of the Public Utilities Act, the Lieutenant-Governor in Council may direct the public utilities board with respect to the policies and procedures to be implemented by the board with respect to the determination of rate structures of public utilities under the Public Utilities Act and, without limiting the generality of the foregoing, including direction on the setting and subsidization of rural rates, the setting of industrial rates in Labrador, the fixing of a debt-equity ratio for Hydro, and the phase in, over a period of years from the date of coming into force of this section, of a rate of return determination for Hydro, and the board shall implement those policies and procedures.

 

        4. The Act is amended by adding immediately after section 5.7 the following:

Act to apply

      5.8 (1) Notwithstanding section 7 of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961, as of January 1, 2015, the Public Utilities Act shall apply to all transmission lines and related assets located in Labrador, except

             (a)  those in relation to the supply of hydro-electric power described in subparagraph 7(1)(b)(i) of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961; and

             (b)  those included in the Muskrat Falls Project.

             (2)  The Public Utilities Act shall not apply to the setting of electricity rates for industrial customers in Labrador other than the transmission components of those rates, which shall be regulated under subsection (1).

             (3)  The public utilities board may receive applications, hear evidence and make rulings in respect of a matter that will come into its jurisdiction as a result of subsection (1) or subsections 7(2) and (3) of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961 before January 1, 2015, but an order made by the public utilities board as a result of that application or hearing shall not have effect until on or after January 1, 2015.

The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961

      5.9 (1) Where Churchill Falls (Labrador) Corporation Limited and Newfoundland and Labrador Hydro cannot reach an agreement for the sale and purchase of the electrical energy and capacity described in subsection 7(3) of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961 within a reasonable time, either party may apply to the public utilities board to establish the rate to be charged and paid under an agreement.

             (2)  Where an application is made to the public utilities board under subsection (1), the public utilities board shall establish the rate to be charged and paid under an agreement, taking into account the submissions of the parties and the following:

             (a)  Churchill Falls (Labrador) Corporation Limited's requirements for price stability and sufficient revenues to cover anticipated costs;

             (b)  the proportionality of the volume of energy under an agreement to Churchill Falls (Labrador) Corporation Limited's total volume of energy produced;

             (c)  the terms of the Churchill Falls (Labrador) Corporation Limited's shareholders agreement;

             (d)  other prices received by Churchill Falls (Labrador) Corporation Limited for sale of electrical energy and capacity; and

             (e)  the policy objective set out in subparagraph 3(a)(v), and the achievement of that policy objective.

             (3)  The rate established by the board under subsection (2)

             (a)  shall be indexed to and adjusted annually for inflation, and the nature of that adjustment may be established by the public utilities board as appropriate for the industry;

             (b)  shall be binding on Churchill Falls (Labrador) Corporation Limited and Newfoundland and Labrador Hydro, but may be amended or changed by the parties by agreement without the prior approval of the public utilities board; and

             (c)  may be increased by the public utilities board at any time the rate is less than 50% of the blended Labrador industrial generation rate, upon application by Churchill Falls (Labrador) Corporation Limited, at the discretion of the public utilities board.