B.C. Reg. 347/2004, deposited July 23, 2004, pursuant to the FINANCIAL ADMINISTRATION ACT [Section 19] and the WATER ACT [Section 46 (2)]. Order in Council 824/2004, approved and ordered July 22, 2004.

On the recommendation of the undersigned, the Administrator, by and with the advice and consent of the Executive Council, orders that the Water Regulation, B.C. Reg. 204/88, is amended as set out in the attached Schedule.

— G. ABBOTT, Minister of Sustainable Resource Management; J. van DONGEN, Presiding Member of the Executive Council.

Schedule

1 Section 23.1 of the Water Regulation, B.C. Reg. 204/88, is repealed and the following substituted:

Remission of annual rentals payable for orders under section 39 of the Act

23.1 (1) In this section and in section 23.2, "power development" includes storage recognized in a licence for storage purpose as supporting storage for that power development.

(2) Authorization is given for remission of a part of the annual rentals payable in respect of a power development on the following conditions:

(a) the comptroller is conducting a review of the licences in respect of the power development and of the operation of the power development;

(b) during the preceding calendar year the diversion, rate of diversion, storage, carriage, distribution and use of water by the licensee has been regulated by an order under section 39 of the Act, and

(i) the effect of the order has been to reduce the power benefits to the licensee in favour of other benefits, which may include benefits for fish, fish habitat, flood protection, recreation or otherwise, and

(ii) the comptroller is satisfied that the licensee has operated the power development in accordance with the order;

(c) the licensee has begun to prepare a water use plan for the power development in accordance with water use plan guidelines published by the government;

(d) the licensee has provided information on the operation of the power development during the preceding calendar year as required by the comptroller.

(3) The authorization for remission under subsection (2) ceases to have effect when the amount that is to be remitted under this section for the calendar year in which the order referred to in subsection (2) (b) is rescinded has been remitted to the licensee.

(4) The amount to be remitted under subsection (2) in a calendar year must be

(a) subject to subsection (5), based on an estimate of the long-term cost to replace the foregone power benefits as agreed by the licensee and the comptroller or, failing agreement, as may be otherwise established by the comptroller, and

(b) deducted from the total annual rentals payable by the licensee.

(5) The total amount of remissions authorized under this section in each calendar year must not exceed $3.6 million.

(6) If the annual rentals payable are payable in 2 installments in a calendar year, an estimate of one half of that calendar year's remission must be deducted from the first installment and the balance of that calendar year's remission must be deducted from the second installment.

Remission of annual rentals payable for water use plans

23.2 (1) In this section, "increased costs" includes increased costs to a licensee resulting from a condition of an order, new licence or amended licence referred to in subsection (2) (c) that requires a licensee to collect, analyze or report specified information to the comptroller.

(2) Authorization is given for remission of a part of the annual rentals payable in respect of a power development on the following conditions:

(a) the comptroller has completed a review of the licences in respect of the power development and made any changes to the licences that are necessary to

(i) provide a clear description of the rights granted and obligations imposed in respect of the power development, and

(ii) provide a basis for monitoring compliance with and enforcement of the licences and the terms and conditions of the licences;

(b) the licensee has

(i) completed a water use plan in respect of the power development in accordance with water use plan guidelines published by the government, and

(ii) submitted the water use plan to the comptroller for review;

(c) the comptroller has ordered or authorized the licensee to operate the power development as contemplated by the water use plan as submitted or as modified by the comptroller, including by or as a condition of

(i) an order made under section 39 of the Act,

(ii) a new licence issued under section 12 of the Act, or

(iii) a licence amended under section 18 of the Act;

(d) the order, new licence or amended licence referred to in paragraph (c) was in effect during the preceding calendar year;

(e) compliance with the order, new licence or amended licence referred to in paragraph (c) has caused

(i) a net loss of revenue to the licensee from power production, or

(ii) increased costs to the licensee

at the power development that is the subject of the order, new licence or amended licence, in favour of benefits other than power benefits, which may include benefits for fish, fish habitat, flood protection, recreation or otherwise;

(f) the licensee has provided information as required by the comptroller on

(i) the operation of the power development, or

(ii) any other aspect of the power development

during the preceding calendar year;

(g) the comptroller is satisfied that the licensee has, during the preceding calendar year, substantially complied with the order, new licence or amended licence referred to in paragraph (c);

(h) the total amount of the remission over the period of the remission schedule, as determined under subsection (3),

(i) in respect of the Peace River Water Use Plan,

(A) is approved by the Lieutenant Governor in Council, or

(B) is varied by, and approved as varied, by the Lieutenant Governor in Council, or

(ii) in respect of all other water use plans, is approved by the chair of Treasury Board.

(3) Subject to subsections (2) (h) (i) and (4), the amount to be remitted under subsection (2) in a calendar year must be

(a) equal to

net loss of revenue + (increased costs — net gain in revenue),

(b) determined by applying a methodology as agreed by the licensee and the comptroller or, failing agreement, as may be otherwise established by the comptroller, for

(i) calculating the net loss of and net gain in revenue to the licensee from power production and the increased costs to the licensee at the power development that have resulted from compliance with an order, new licence or amended licence referred to in subsection (2) (c) in respect of the power development, and

(ii) a schedule for remission to the licensee, covering a period not longer than 20 years, of annual rentals payable by the licensee in respect of a power development as calculated in accordance with subparagraph (i), commencing in the calendar year following the calendar year in which the order, new licence or amended licence referred to in subsection (2) (c) is made or issued, and

(c) deducted from the total annual rentals payable by a licensee in respect of a power development.

(4) The total amount of remissions authorized under this section in each calendar year must not exceed $50 million.

(5) If the annual rentals payable are payable in 2 installments in a calendar year, an estimate of one half of that calendar year's remission must be deducted from the first installment and the balance of that calendar year's remission must be deducted from the second installment.

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