Interpretation

1   In this regulation:

"Act" means the Natural Gas Price Act;

"attributed contract quantity" in relation to a producer aggregator contract means the volume of gas attributed to that contract in accordance with a method approved by the minister;

"cubic metre", in relation to a volume of natural gas, means that volume of gas measured at 101.325 kilopascals and 15 degrees Celsius;

"downstream contract" means a contract by which an aggregator sells or agrees to sell netback gas;

"eligible producer", in respect of a supply pool, means a person who is a party to, and a seller of gas under, a producer aggregator contract which is part of the pool;

"royalty administrator" means the person appointed as royalty administrator under section 73 (3) of the Petroleum and Natural Gas Act;

"supply pool" means all of the producer aggregator contracts on which an aggregator intends to rely as the source of supply for a downstream contract.

[am. B.C. Reg. 355/94, s. (b).]

Minimum support under Act

2   The minimum degree of support under sections 9, 10 and 15 (2) (h) (i) of the Act is

(a) a yes vote by a majority of those eligible producers who have voted yes or no, where those voting yes hold, in the aggregate, more than 50% of the total of the attributed contract quantities of those who voted yes or no, or

(b) a redefined minimum degree of support in accordance with section 3.

How to redefine minimum support

3   (1) For the purposes of section 2 (b), an aggregator

(a) may, at any time in respect of the aggregator's supply pool, and

(b) shall, whenever requested by 5% or more of eligible producers in respect of the aggregator's supply pool,

submit, in accordance with the provisions of section 5 to all eligible producers of that pool, a proposal of the aggregator under paragraph (a) or of the producers making the request under paragraph (b), as the case may be, redefining the majority required to approve any vote taken in accordance with these regulations.

(2) Notwithstanding subsection (1),

(a) an aggregator may submit the proposal under subsection (1) (a), and

(b) producers may submit the proposal under subsection (1) (b)

only once every 6 months.

(3) The aggregator shall conduct a vote on the proposal in accordance with the procedures in section 5 (1).

(4) Post voting procedures must be carried out in accordance with section 6.

(5) If the proposal for a redefined minimum degree of support receives the minimum degree of support under section 2 and the aggregator wants the minister to recognize the redefined minimum degree of support, the aggregator must, within 5 working days of the vote being tallied under section 6 (a), provide the minister with

(a) the ballots submitted by eligible producers or photocopies of those ballots, and

(b) the results of the tally.

(6) The aggregator shall notify the producers of the minister's recognition under subsection (5).

(7) If the aggregator does not notify the minister in accordance with subsection (5), the aggregator shall immediately notify the producers that the minimum degree of support has not been redefined.

What to do before conducting a vote

4   (1) An aggregator shall, before conducting a vote under this regulation,

(a) file with the minister the names of all producers who are eligible producers in respect of that vote, and

(b) obtain the approval of the minister of the method used to determine the attributed contract quantity of each producer aggregator contract comprising the supply pool for the downstream contract that is the subject of the vote, except where the method for that supply pool has previously been approved by the minister.

(2) Where 2 or more producers are parties to a producer aggregator contract referred to in subsection (1) (b), each of them is entitled to vote in accordance with this regulation, and the attributed contract quantity for the contract shall be allocated among those producers in the manner agreed upon among themselves or, failing agreement, in accordance with the following:

(a) if the contract gives each producer a specific undivided interest in the gas delivered under the contract, the percentage interest of each producer in the attributed contract quantity for the contract is equal to that producer's specified undivided interest in the gas delivered under the contract;

(b) if the contract does not give each producer a specific undivided interest in the gas, but does give each producer a specific portion of the sale proceeds of the gas delivered under the contract, the percentage interest of each producer in the attributed contract quantity of the contract is equal to that producer's specified portion of the sale proceeds of the gas delivered under the contract;

(c) if the contract does not give each producer a specific undivided interest in, or a specific portion of the sale proceeds of, the gas delivered under the contract, the attributed contract quantity for the contract is divided among the producers equally.

How to conduct a vote

5   (1) To conduct a vote under this regulation, the aggregator shall send to each eligible producer, at an address and by a method agreed upon by the aggregator and the producer, the following:

(a) a ballot by which the producer may cast the producer's vote as either "yes", "no" or "abstain";

(b) a notice which states

(i) the question which is the subject of the vote in a way which permits the producer to answer "yes" or "no" or to record an abstention,

(ii) the ways in which the producer may return the ballot, and the time for doing so, which shall be not less than 5 working days following the date on which the producer received the notice or following the date on which the producer is deemed to have received it under subsection (3), whichever is the earlier,

(iii) the attributed contract quantity of each producer aggregator contract in which the producer is named as a seller and that is part of the supply pool, and

(iv) the total attributed contract quantity of all the producer aggregator contracts which comprise the supply pool;

(c) where the aggregator seeks approval in respect of the sale of netback gas under a downstream contract which has been made, a summary of the downstream contract that contains information appropriate to permit each of the eligible producers to judge the question which is the subject of the vote, including

(i) the effective date and term,

(ii) the purchase and sales volume obligations of buyer and seller,

(iii) a description of each obligation of the aggregator which would significantly affect the value of the contract, including the extent, if any, for which the aggregator is liable for the costs of gathering, processing or transmission of the gas,

(iv) the price or the method by which the price is to be determined,

(v) the estimated load factor of the contract, and the estimated impact on the average load factor for the producer aggregator contracts within the supply pool,

(vi) where the price payable to the aggregator may be determined or redetermined by arbitration, the method of conducting the arbitration, the arbitration procedures and any criteria or guidelines that are to be followed by the person conducting the arbitration that are not set out in section 9, and

(vii) any other information relevant to the commercial impact of the proposed contract on the producer;

(d) where the aggregator seeks approval in respect of the sale of netback gas for which no downstream contract of sale has been made, a summary of the terms under which the netback gas will be sold by the aggregator including

(i) the sales volume obligation, and

(ii) the price or the manner in which the price is to be determined.

(2) The aggregator shall send the information listed in subsection (1) (b) to (d) to the minister at the same time it is sent to the producers.

(3) For the purposes of subsection (1), a producer shall be deemed to have received the notice 7 calendar days after the notice is mailed to the producer at the producer's current address.

[am. B.C. Reg. 76/2022, s. 7.]

Post-voting procedures

6   Whenever an aggregator conducts a vote of eligible producers, the aggregator shall

(a) ensure that the vote is taken in accordance with section 5 and tallied promptly,

(b) count a ballot that is conditional as a spoiled ballot, and

(c) immediately after the votes are tallied, inform each eligible producer of

(i) the number of votes cast for, against and otherwise, and

(ii) the total of the attributed contract quantities for each of the 3 categories of votes referred in subparagraph (i).

How to obtain the minister's finding of producer support

7   (1) Where in a vote under section 5 at least the minimum degree of producer support for the sale is obtained, the aggregator shall make an application for a finding of producer support.

(2) An application for a finding of producer support shall contain

(a) the ballots submitted by eligible producers or photocopies of those ballots, and

(b) the results of the tally as reported under section 6 (c).

(3) The minister may make a finding of producer support notwithstanding the failure to comply with any of the provisions of these regulations, provided the minister is satisfied that the minimum degree of support under section 2 was obtained and that the failure to comply was not an effective cause of the minimum degree of support being obtained.

(4) The aggregator shall inform each eligible producer of the decision made in respect of the application.

Penalty under section 11 of the Act

8   For the purposes of section 11 of the Act the penalty is $50 per 1 000 cubic metres of natural gas.

Price arbitration for downstream gas contracts

9   (1) Except to the extent to which the parties to a downstream contract which provides for arbitration otherwise agree, this section applies to an arbitration under the terms of the downstream contract.

(2) Where an arbitrator determines the price of the formula or method for calculating the price at which natural gas is to be sold under a downstream contract, an arbitrator shall have regard to the price of any energy source including gas that competes or might compete with the gas that is the subject of that contract.

Interpretation

10   In this Part:

"administrative expenses" means the costs, charges and expenses which are incurred

(a) by the collector in the course of exercising the powers or performing the functions and duties conferred on or delegated to the collector under the Act and this regulation,

(b) by any person in the course of implementing or administering those provisions of the Utilities Commission Act that deal with energy removal certificates, and

(c) by the royalty administrator in the course of administering royalty collections under the Petroleum and Natural Gas Act where those costs, charges and expenses are incurred because of the devolution of British Columbia Petroleum Corporation's marketing functions;

(d) by the Mediation and Arbitration Board, established under the Petroleum and Natural Gas Act, or by the Energy Resources Division of the minister's ministry in the administration of the enactments governing the production, sale, transportation and removal from British Columbia of natural gas;

"collector" means the royalty administrator;

"fiscal year" means a period of time beginning on the first day of April and ending the thirty-first day of March next following, except that the first fiscal year shall be the period from August 1, 1990 to March 31, 1991 inclusive;

"levy rate" means the rate calculated in accordance with section 11;

"marketable gas" means natural gas that is available for sale for direct consumption as a domestic, commercial or industrial fuel, or as an industrial raw material, whether it occurs naturally or results from the processing of natural gas;

"month" means a period of time beginning at 9 a.m., Pacific Standard Time, on the first day of a calendar month and ending at the same time on the first day of the calendar month next following.

[am. B.C. Regs. 104/93, s. 1; 355/94, s. (b).]

Levy rate

11   (1) The minister shall, as soon as possible in the case of the first fiscal year, and not less than 30 days prior to the start of each fiscal year after that, calculate the levy rate by use of the formula

where:

R = the levy rate for the fiscal year which is the subject of the calculation (the "subject year");

E = the estimate made by the minister of the total amount of administrative expenses which will be incurred during the subject year;

V = the estimate made by the minister of the volume of marketable natural gas, stated in units of 1 000 cubic metres, attributable to the total amount of natural gas which the minister estimates will be produced during the subject year.

(2) The minister shall give written notice of the levy rate, as soon as possible after it is calculated, to each person who is the holder of an acquisition order and after that to each person to whom an acquisition order is issued.

(3) The minister may recalculate the levy rate whenever the minister concludes that it is reasonable to change either of the component estimates, and the new rate shall take effect at 9 a.m. Pacific Standard Time on the first day of the month next following the date on which the minister gives notice of the amount of the recalculated rate to substantially all of the producers who, as of that date, are holders of acquisition orders.

[am. B.C. Regs. 104/93, s. 2; 76/2022, s. 6.]

Levy payment

12   (1) The collector must invoice each producer who is the holder of an acquisition order an amount equal to the levy rate multiplied by the volume of marketable gas produced by that producer for each month up to and including July, 1998.

(2) A producer who receives an invoice shall pay to the collector, at the address that the collector shall from time to time specify, within 10 working days after receipt of the invoice, the amount stated in the invoice.

(3) Where a producer is not in agreement with the amount invoiced by the collector, the collector shall review the invoice if, within 90 days of the date the collector delivered or faxed the invoice to the producer, the producer delivers or faxes to the collector a request for a review with reasons and any supporting documentation.

(4) A producer who makes a submission under subsection (3) is not exempted from the requirement to pay under subsection (2).

(5) Where the collector reviews an invoice under subsection (3) and determines that the position of the producer is correct, the collector shall

(a) invoice the producer for any additional levy owing,

(b) credit the producer, on the next invoice, for any overpayment, or

(c) where a producer will not be invoiced, reimburse the producer for any overpayment.

(6) A levy payment which is not made within the time period set out in subsection (2) is subject to a penalty of 10% of the invoice amount or $25, whichever is greater.

(7) A penalty assessed under subsection (6) shall be included on the next invoice to the producer.

(8) If the production volumes used to produce the invoice in subsection (1) are adjusted at a later date, the collector shall

(a) invoice each producer for any additional volume using the levy rate in effect for the month of production,

(b) credit each producer, on the next invoice, for any overpayment, or

(c) where a producer will not be invoiced, reimburse the producer for any overpayment.

(9) Where a producer has not paid an invoice from the collector within 45 days after receipt of the invoice, the minister may, after giving 60 days notice to the producer, cancel a permit, licence or lease granted to the producer under the Petroleum and Natural Gas Act.

[am. B.C. Reg. 364/98.]

Amounts payable by British Columbia Petroleum Corporation to producers

13   The amounts payable by the British Columbia Petroleum Corporation, in this section called the "corporation", in respect of natural gas acquired, and in respect of deficiency gas incurred, under a contract described in section 16¹ of the Act, shall be those amounts which, in the opinion of the minister, would have been payable had the corporation been replaced by CanWest Gas Supply Inc. as buyer under the contract in accordance with the agreement made by the corporation, CanWest Gas Supply Inc., and CanWest Gas Supply (1989) Ltd. as of the 10th day of May, 1990.

Excessive withholding

14   Notwithstanding section 9 of the Act and the provisions of this regulation, the minister may revoke or refuse to issue a finding of producer support if, under a producer aggregator contract, the aggregator withholds money from an eligible producer in an amount that is more than 10% of the aggregator's estimated gross annual sales revenue from the sale of all gas from the supply pool to which the producer aggregator contract belongs.