BCUC refuses to reconsider attempt to regulate strata corporations

20 March 2024

by Bill Andrews and Tom Hackney

On 15 March 2024, the BC Utilities Commission summarily dismissed BCSEA’s 1 February 2024 application for reconsideration of the BCUC’s 21 December 2023 decision to seek the Minister of Energy’s approval for the BCUC to regulate “Strata and Micro Thermal Energy Systems” that are currently exempt from active regulation by the BCUC. (Okay, that requires some unpacking! For an introduction, see our 19 February 2024 article BCSEA challenges BCUC move to regulate Strata Thermal Energy Systems.)

BCSEA is disappointed with the BCUC’s refusal to reconsider trying to expand its regulation to an area where the BCUC itself acknowledges there is no evidence of an actual problem. Fortunately, however, the BCUC’s regulatory ambitions in this case require the advance approval of the Minister of Energy to become law under the Utilities Commission Act. So, the “ball” is in the Minister’s “court.” 

BCSEA has urged the Minister to reject expansion of the ambit of the BCUC’s active regulation of small-scale thermal energy systems. In its most recent letter to the Minister, BCSEA summarized:

  1. First and foremost, there is no problem that requires BCUC involvement. After four years of review, the BCUC consistently acknowledges that it has no evidence of actual safety or reliability problems faced by past or current Micro or Strata TES customers under the current exemptions of these thermal energy systems from BCUC regulation. 
  2. Imposing unnecessary new regulation by the BCUC on the providers of Strata and Micro Thermal Energy Systems would interfere with their focus on meeting legitimate existing and forthcoming financial and performance requirements, including reducing GHG emissions and increasing affordable housing in BC. 
  3. Rolling out new BCUC regulation of Strata and Micro Thermal Energy Systems promises to be a contentious, high-profile exercise. It seems unlikely that thousands of strata corporations would quietly and willingly sign up for new regulation by the BCUC, certainly in the context of the BCUC itself acknowledging that there is no evidence of actual safety or reliability problems. 
  4. Expanding the regulatory reach of the BCUC into the provision of heating and cooling services by strata corporations to their own members would be an immense (and purposeless) logistical challenge. The BCUC does not even have a list of the so-called “public utilities” that it wants to regulate. These are thousands of relatively small strata corporations directed by a volunteer council of building residents. They do not see themselves as a “public utility” under the UCA. Most of them would be utterly surprised to learn that a conventional-style natural gas boiler with piped hot water or space heating to the occupants of a single building constitutes what the BCUC defines as a “Thermal Energy System.” The BCUC would have to evaluate thousands of specific situations to determine which meet the BCUC’s simplistically-worded definition of a Strata Thermal Energy System. 
  5. The BCUC’s desired approach is to have the Minister approve BCUC regulation of Strata and Micro Thermal Energy Systems based on no evidence of a problem, and then later to have the BCUC consider ameliorating the regulatory requirements because they are not necessary. BCSEA asks the Minister to reject this ‘act now, think later’ approach. 

Meanwhile, the BCUC is moving into Phase 2 of the proceeding, to determine how the BCUC will regulate thermal energy systems, big and small. On 19 March 2024, BCSEA wrote to the Phase 2 Panel asking it to defer consideration of how to regulate Strata and Micro Thermal Energy Systems pending the Minister’s decision on whether to regulate them. In the alternative, BCSEA asked the Panel to determine how the BCUC will provide notice to potentially affected strata corporations and other entities and how it will ensure effective participation in the proceeding by providers of small Thermal Energy Systems or their representatives. BCSEA noted that the BCUC’s decision to ask the Minister for approval to regulate these strata corporations – small in scale but large in number – was made without any input from providers of small Thermal Energy Systems or their representatives.

BCSEA cautioned that no one knows which entities are providers of “Strata and Micro Thermal Energy Systems” as defined by the Commission. The BCUC has no list; not surprisingly as these nominal “public utilities” have never been actively regulated by the BCUC. And, most of the strata corporations and other entities that may be determined to be a provider of a Strata or Micro Thermal Energy System neither see themselves as a public utility nor would recognize themselves as a “Strata Thermal Energy System” or a “Micro Thermal Energy System” based on the Commission’s superficial descriptions. Identifying which entities are indeed providers of “Strata or Thermal Energy Systems” will be a large, challenging undertaking.

Stay tuned for future developments!