It’s costing municipal taxpayers and energy ratepayers a lot of money to challenge the BCUC’s decisions in court. But the BCUC hasn’t been proven wrong yet.
Introduction
The City of Surrey and BC Hydro are currently locked in a dispute at the BC Utilities Commission (BCUC) over who should pay to move three transmission lines so that Surrey can build a new road. As I wrote in February, this is likely to be resolved in BC Hydro’s favour.
The BCUC proceeding arose solely because Surrey did not accept BC Hydro’s standard terms (“if you want us to move our stuff, you have to pay us to do it”). Surrey’s legal and staff costs will be paid by its municipal taxpayers; BC Hydro’s costs by its ratepayers. The BCUC costs to run the proceeding will be spread across all energy ratepayers in the province, including BC Hydro’s.
The costs will increase significantly if the BCUC rules in BC Hydro’s favour and Surrey decides to appeal the decision in court. That wouldn’t be the first challenge of a BCUC decision by a municipality. There have been several in recent years, none of them successful.
This had me wondering – how much are these municipal legal challenges costing us, and are they worth it?
Recent cases
Information on municipalities’ legal costs is not easy to obtain. For the most part, my freedom of information (FOI) requests have been stonewalled, although the City of North Vancouver deserves credit for sharing their costs willingly. The BCUC, perhaps more used to a culture of transparency, also shared their costs on request.
I’m aware of three recent cases where municipalities appealed a BCUC decision. Each has different characteristics, but they share a common theme – municipalities don’t like the powers that the BCUC have been given under the Utilities Commission Act and would prefer more independence. Here’s a synopsis of the cases and, to the extent I know them, their costs.
Coquitlam’s abandoned pipeline
In 2015, the BCUC granted FortisBC Energy Inc. (FEI) permission to install a new gas pipeline under Lougheed Highway, and to abandon the old pipeline. The City of Coquitlam wanted FEI to remove a section of the abandoned pipeline, but the BCUC said it could remain in place.
Coquitlam appealed the decision, arguing that the BCUC had no jurisdiction over public utilities’ facilities once they were abandoned. In 2021, the BC Court of Appeal dismissed Coquitlam’s case.
The BCUC informs me it spent $100,269 on external legal fees responding to the appeal. Coquitlam, however, declined my request for this information, citing “client privilege.” It turns out that legal bills do not usually have to be disclosed under BC’s FOI legislation in case they somehow reveal privileged communications between a solicitor and their client.
However, there is at least one recent example where the Office of the Information and Privacy Commissioner (OIPC) has ordered a municipality to disclose its legal bills, so I have requested that the OIPC review the case; my request is outstanding.
City of Richmond and FEI contract terms
In another case, the City of Richmond wanted FEI to move a pipeline that was in the way of a new sewer project. FEI agreed to move the pipeline, but Richmond didn’t like a clause in the standard contract limiting FEI’s liability. On review, the BCUC found that the clause in FEI’s standard contract was reasonable and that it had jurisdiction to make this decision because it related to setting rates.
Richmond appealed the decision on the ground that the BCUC had no jurisdiction to set a limitation of liability clause. The BC Court of Appeal dismissed the case.
This time, the BCUC had to spend $32,090 on external legal fees responding to the appeal. And, for the same “client privilege” reasons as in the case above, Richmond declined my request for the same information. Another request to the OIPC is now outstanding.
The municipal inquiry
The Utilities Commission Act excludes municipalities from BCUC regulation if they provide energy services only within their own boundaries. However, the Act makes no reference to utility companies that are owned by municipalities. In 2019, the BCUC initiated an inquiry to examine the status of municipally-owned utilities.
In 2022, the BCUC ruled that a utility wholly owned and operated by a municipality did come under BCUC jurisdiction, but recommended that these companies should be granted an exemption from most aspects of regulation (under certain conditions). This exemption was duly granted in August 2024.
The proceeding appears to have been a little “testy”, to say the least. Richmond accused the BCUC of “a reasonable apprehension of bias” and requested that the inquiry be halted, not least because of the municipality’s “dramatically shrinking revenues.”
The BCUC declined, and once again Richmond appealed the BCUC’s decision (apparently revenues weren’t shrinking so much that it couldn’t afford some more legal costs). This time Richmond was joined by the City of North Vancouver in its legal action. The BC Court of Appeal dismissed the accusation of bias; judgement on the BCUC’s interpretation of the UCA is expected January 2026.
The BCUC has had to spend $75,464 so far on external legal fees in this appeal, and North Vancouver has spent $20,490 in its role supporting Richmond. Richmond itself, however, would not disclose its costs, again citing “client privilege.” The OIPC, which is probably getting tired of hearing from me, has this request for a review in its queue as well.
Freedom of Information isn’t Free
There’s another costly aspect to these legal challenges. I asked the BCUC about any FOI requests it might have received from municipalities in the last five years, a common occurrence for public bodies involved in legal proceedings.
It turns out that from 2020 to 2024, the BCUC spent a whopping $244,061 responding to FOI requests from Richmond, and estimates it incurred an additional $150,000 in staff costs. The BCUC billed Richmond $24,000 for these requests, as it is entitled to do, but BC’s utility ratepayers must pick up the tab for the remainder.
I appreciate I could be accused of hypocrisy here, since I presumably caused the BCUC to incur costs to answer my own FOI request. In my defense, I can only say that I think it’s in the public interest that governments’ legal costs are transparent – a view not shared by the cities of Coquitlam and Richmond, apparently.
Conclusion
These municipal challenges to BCUC decisions clearly cost a lot of public money, paid for either by taxpayers or ratepayers. Hopefully the OIPC will direct the municipalities to disclose their legal costs so we can see the full picture. Were these cases worth it?
Coquitlam’s case concerning abandoned utility infrastructure at least had the merit of bringing some legal certainty to an area that will become increasingly important in decades to come. The Utilities Commission Act doesn’t expressly mention abandoned assets, but now we have a BC Court of Appeal decision confirming that they are within the BCUC’s jurisdiction to regulate. The BCUC had already said this, of course, but now we have a stronger voice saying the same thing.
Beyond that, the cases appear to be an expensive expression of impotent frustration on the part of a few municipalities. The Utilities Commission Act is quite clear that the BCUC regulates energy utilities in the interests of the whole province, for example section 121 expressly says that municipalities can’t override the BCUC’s powers. A lot of money is being spent proving this point, time and time again.
Let’s hope that if the BCUC rules in the coming weeks that Surrey should pay to move BC Hydro’s transmission lines, we don’t see the launch of another fruitless appeal case.