Richmond (City) v. British Columbia (Utilities Commission)

2025 BCCA 38 Richmond (City) v. British Columbia (Utilities Commission)

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Richmond (City) v. British Columbia (Utilities Commission), 2025 BCCA 38 Date: 20250131 Dockets: CA50129; CA50130 CA50135; CA50136 Docket: CA50129 Between: City of Richmond Appellant And British Columbia Utilities Commission Respondent - and - Docket: CA50130 Between: Lulu Island Energy Company Ltd. Appellant And British Columbia Utilities Commission Respondent - and - Docket: CA50135 Between: City of North Vancouver Appellant And British Columbia Utilities Commission Respondent - and - Docket: CA50136 Between: Lonsdale Energy Corporation Appellant And British Columbia Utilities Commission Respondent Before: The Honourable Justice Griffin (In Chambers) On appeal from: A decision of the British Columbia Utilities Commission, dated August 12, 2024 (Order Number G-214-24). Oral Reasons for Judgment Counsel for the Appellants, City of Richmond and Lulu Island Energy Company Ltd.: C. Dennis, K.C. O.J. James Counsel for the Appellants, City of North Vancouver and Lonsdale Energy Corporation: J. Yardley Counsel for the Respondent, British Columbia Utilities Commission: L. Bussoli Counsel for the proposed Respondents, FortisBC Energy Inc., FortisBC Inc., and FortisBC Alternative Energy Services Inc.: T. Ahmed N. Rand Counsel for the proposed Respondent, BC Hydro and Power Authority: A.W.S. Carpenter Place and Date of Hearing: Vancouver,

British Columbia January 31, 2025 Place and Date of Judgment: Vancouver, British Columbia January 31, 2025 Summary: FortisBC and BCHydro apply to be added as respondents to related appeals from a decision of the BC Utilities Commission. The appellants submit that they qualify as interveners but should not be respondents. Held: Application allowed. The applicants could be directly affected by the appeal, and were participants in the hearing with the same status as the appellants. They will provide positions that are adverse in interest to the appellants which will assist the Court hearing the appeal. GRIFFIN J.A.: Overview [1] This hearing involves applications by BC Hydro and FortisBC and related parties (the "Applicants") to be added as respondents in four related appeals (CA50129, CA50130, CA50135, CA50136) (the "Related Appeals"). [2] These applications are opposed by the appellants in the Related Appeals, who are two cities and two local government corporations they own: the City of Richmond and Lulu Island Energy Company, and the City of North Vancouver and Lonsdale Energy Corporation. Background [3] The British Columbia Utilities Commission ("BCUC") is a provincial regulatory body given broad powers to regulate "public utilities" under the Utilities Commission Act, R.S.B.C. 1996, c. 473 ["UCA"]. [4] The dispute underlying this appeal arises from an inquiry initiated and

undertaken by the BCUC to determine the scope of a clause in s. 1 of the UCA excluding municipalities from the meaning of "public utility". In brief, the question concerns whether corporations wholly owned and wholly operated by municipalities fit within the exclusion from regulation. [5] Specifically, s. 1(1) of the UCA provides: "public utility" means a person, or the person's lessee, trustee, receiver or liquidator, who owns or operates in British Columbia, equipment or facilities for a) the production, generation, storage, transmission, sale, delivery or provision of electricity, natural gas, steam or any other agent for the production of light, heat, cold or power to or for the public or a corporation for compensation, or b) the conveyance or transmission of information, messages or communications by guided or unguided electromagnetic waves, including systems of cable, microwave, optical fibre or radiocommunications if that service is offered to the public for compensation, but does not include c) a municipality or regional district in respect of services provided by the municipality or regional district within its own boundaries, d) a person not otherwise a public utility who provides the service or commodity only to the person or the person's employees or tenants, if the service or commodity is not resold to or used by others, e) a person not otherwise a public utility

who is engaged in the petroleum industry or in the wellhead production of oil, natural gas or other natural petroleum substances, f) a person not otherwise a public utility who is engaged in the production of a geothermal resource, as defined in the Geothermal Resources Act, or g) a person, other than the authority, who enters into or is created by, under or in furtherance of an agreement designated under section 12(9) of the Hydro and Power Authority Act, in respect of anything done, owned or operated under or in relation to that agreement; [6] The BCUC inquiry was intended to proceed in two stages. The previous appeal from a report at the first stage was held to be premature and quashed, in reasons indexed at 2024 BCCA 221 ("Decision to Quash"). However, subsequent to that first stage report and appeal, the BCUC made a decision or order which is now the subject of appeal. Thus, the first stage report will be relevant to the appeal of this decision and it contains much of the reasoning of the BCUC. [7] The BCUC decided that corporations owned and operated by municipalities do not fit within the municipal exclusion in s. 1(1), but issued certain exemption orders subject to those corporations complying with certain reporting conditions. [8] The appellants and the proposed respondents each participated as "interveners" in the inquiry, with the same status and rights. This is the

name given to a participant in the public hearing, other than the applicant, under s. 3 of the BCUC Rules of Practice and Procedure. [9] The appellants appeal the final order of the BCUC following the first stage inquiry, BCUC Order G-214-24 made August 12, 2024. The only respondent they name on appeal is the BCUC. [10] The appellants received leave to appeal on November 20, 2024, with reasons of Justice Fenlon in Chambers indexed as 2024 BCCA 399. The questions for which they sought and obtained leave were: 1. Did the Commission err in its interpretation of the Municipal Exclusion and in its conclusion that an LGC that is wholly owned and operated by a local government and providing energy utilities services within the boundaries of that local government does not fall within the exclusion?

2. Did the Commission breach its duties of procedural fairness and natural justice by failing to provide the applicants, as interveners, notice of and input into the exemption criteria in the final order? [11] As is typical for its role as the tribunal whose decision is being challenged, the BCUC took no position on the application for leave to appeal. Legal framework [12] Under R. 18 of the Court of Appeal Rules, a justice of this Court may add a respondent to an appeal: 18 (1) A justice may make an order under subrule (2), if (a) a person was not named as a respondent in a notice of appeal or notice of cross appeal, and (b) the justice determines that the person has interests that could be affected by the relief sought in the appeal or cross appeal. (2) On application by a person referred to in subrule (1) (a), a justice, in the circumstances referred to in that subrule, may order that (a) the person be added as a respondent to the appeal, (b) the notice of appeal or notice of cross appeal, as applicable, be amended to name the person as a respondent, and (c) the person be served the amended notice of appeal or notice of cross appeal, as applicable. [13] In Sunshine Coast (Regional District) v. Vanderhaeghe, 2023 BCCA 192, Justice Hunter, in Chambers, summarized the analysis to be undertaken on applications under this rule at paras. 19-20: [19] Applicants must show that they

have interests that could be affected by the relief sought in the appeal, and the application judge must then engage in an exercise of judicial discretion, governed by an overarching concern with the interests of justice. [20] Judgments under the previous sub-rule have reviewed the type of interest that could support an application for party status. Applicants have been added as party respondents to an appeal when their legal, financial or reputational interests will be affected by the result of the appeal. [Emphasis added.] [14] The parties agree that the last sentence of para. 19 of Vanderhaeghe, meant to say "could be" rather than "will be" affected. [15] Under s. 30(f) of the Court of Appeal Act, a justice in chambers may grant a person leave to intervene on an appeal. Rule 61 covers applications for leave to intervene, and provides conditions for interveners' participation in appeals. There are generally two routes to intervener status: the applicant has a direct interest in the matter; or the applicant has a public interest in a public law issue in question, and the applicant brings a different and useful perspective to those issues that will be of assistance to the Court: British Columbia Civil Liberties Association v. Canada (Attorney General), 2018 BCCA 282 at para. 14 (Chambers). [16] The appellants say that they will not oppose the Applicants becoming interveners.

They do oppose the Applicants being given status as respondents. Parties' positions [17] FortisBC argues that it has an interest in the appeal because the scope of the municipality exception will greatly impact the number of customers that it has. Its evidence is that the more customers who are serviced by municipalities and their local government corporations, the fewer customers are left for FortisBC. This, it argues, will lead to higher rates for its remaining customers who must pay to support the entire larger infrastructure. [18] FortisBC further argues that it should be a respondent in this appeal because it had the same status as the appellants in the inquiry below. It submits that that brings it within the meaning of "respondent" under s. 1(1) of the Court of Appeal Act: "respondent" means either of the following: (a) a person, other than the appellant, (i) who was a party to the proceedings in the court appealed from, and (ii) whose interests are affected by the relief requested by the appellant in an appeal; (b) a person who is added, under the rules, as a respondent to an appeal; [19] They state that it is not novel for another intervener before the BCUC, other than the appellants, to be a respondent on appeal, and that FortisBC is in a better position than the decision-maker to make full arguments on an adversarial appeal. [20] BC Hydro makes substantially the same

arguments. [21] The appellants argue that the impacts of this appeal on FortisBC and BC Hydro's interests are merely speculative and tangential. If these energy providers' customers are impacted, that is not the same as an impact on FortisBC and BC Hydro. They argue that the appeal does not have a direct and tangible impact on the interests of FortisBC and BC Hydro. [22] In stating that the Applicants be added as interveners, the appellants rely in part on comments made by this Court in the earlier and related Decision to Quash. In that appeal, BC Hydro and FortisBC were named as respondents and participated in the appeal. The appeal was ultimately quashed because the stage one report was not an "order" or "decision" of the BCUC and therefore the Court had no jurisdiction to hear it. In the course of quashing the appeal, Justice Groberman noted at para. 22: I note, as well, that the Court raised issues with respect to the status of persons described as "respondents" in this case. It is likely that they would more properly have been treated as interveners. Given that the appeal will not be heard, however, it is unnecessary to say anything further on that issue. [23] Justice Groberman's comments were simply obiter observations in context of a proceeding in which the Court found there was no decision being appealed. These are not binding comments or an advance ruling in relation

to the present appeal and applications. Analysis [24] I am persuaded by the arguments of BC Hydro and FortisBC that they should be added as full parties to the appeal, as respondents and not as interveners. [25] In summary, I reach this conclusion based on the following factors: a) It is clear from the BCUC decision and the role of these Applicants (and the scope of their energy provision in this province), that the Applicants' financial interests could be directly affected by the appeal. The Applicants are very large energy suppliers in the province and they have provided evidence to the effect that if some consumers leave their system to be part of a municipal corporation's system, the remaining customers are left having to pay for the infrastructure that was needed to serve the prior, larger customer base and this will result in a rate increase for the remaining customers. Given the nature of energy regulation in this province, and the large role of the Applicants in providing energy to consumers, I have little difficulty in concluding they are directly affected by the issues under appeal. b) They are not strangers to the case. They participated in the hearing below, with the same status as the appellants, as registered interveners. They directly argued that the municipal exclusion in s. 1 of the UCA only applies to municipalities, not to municipal corporations, a position

that was contrary to the position taken by the appellants and is the very same issue for which the appellants have sought and obtained leave to appeal. These Applicants' position on this issue was carefully weighed and considered in the BCUC decision. c) It is important that this Court have parties adverse in interest to the appellants participate in the appeal, to ensure the best airing of issues on appeal. If they do not participate as respondents, the only respondent will be BCUC. Further, if BC Hydro and FortisBC participate merely as interveners, their roles will be more limited than roles as respondents. [26] The wider implications of the issue on appeal was recognized as a factor weighing in favour of granting leave to appeal, as Justice Fenlon noted at para. 8 of her decision: [8] As to the first proposed ground of appeal, there is merit to the contrary statutory interpretation proposed by the applicants, as the Commission itself has indeed recognized. Further, the appeal raises a question of general importance because the Commission's order could affect operational and strategic decisions of numerous entities beyond those involved in the appeal. [Emphasis added.] [27] The Applicants are two of those entities whose operational and strategic decisions could be affected by the outcome of the within appeal. Conclusion [28] For these reasons, I grant the applications of BC Hydro and FortisBC to be added as respondents, and direct that the notices of appeal be amended accordingly. "The Honourable Justice Griffin"