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January 29, 2021 Law Telephone: 604-247-4636

Fax: 604-276-4037 email: acapuccinelloiraci@richmond.ca

File: 99-LAW/2021-Vol 01

By Electronic Filing British Columbia Utilities Commission Suite 410, 900 Howe Street Vancouver, BC V6Z 2N3 Attention: Marija Tresoglavic, Acting Commission Secretary Dear Ms. Tresoglavic: Re: British Columbia Utilities Commission (“BCUC”)

An Inquiry into the Regulation of Municipal Energy Utilities Order Number G-177-19 Submissions on Further Process

As the BCUC’s letter of June 22, 2020 (Exhibit A-10) correctly points out:

(i) the Inquiry was adjourned until further notice due to the global COVID-19 pandemic and the state of emergency declared in British Columbia;

(ii) it is uncertain when the state of emergency will be lifted, and the COVID-19 pandemic

will have a challenging and lasting impact for the foreseeable future; and (iii) the BCUC understands that resources are currently constrained and that such

circumstances may hinder the ability to participate effectively in the Inquiry at this time. As acknowledged by the BCUC, the City of Richmond’s resources are constrained and the circumstances described by the BCUC would hinder the ability of both the City of Richmond and its wholly owned corporation, Lulu Island Energy Company Ltd. (“LIEC”), to participate effectively in this Inquiry at this time. The BCUC is undoubtedly aware that the City of Richmond and other municipalities and regional districts are faced with dramatically shrinking revenues and at the same time have been called upon by both the federal and provincial governments to provide essential services and to play a key role

C12-5

City of Richmond

6911 No. 3 Road Richmond, BC V6Y 2C1

www.richmond.ca

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in the combined senior and local government efforts to deal with the spread and impact of COVID-19. At this time, the City of Richmond, as an absolute priority, is focussing its efforts on delivering essential services and re-establishing the many interrupted services in a safe and staged manner in coordination with the provincial government and in compliance with all public health, regulatory and legislative orders, guidelines, advisories, guidance documents, notices and requirements. While doing this, the City of Richmond is continuing its expanded role as ordered by the provincial government under the Emergency Program Act, the numerous Ministerial Orders and as set out in the British Columbia Coordination Pandemic Plan which includes an expanded role in the enforcement of public health orders and support for vaccine deployment. In light of this ongoing state of emergency, the conditions of which have significantly worsened during this second wave of the pandemic and now appear even more dire with the recent emergence of more infectious variants of the COVID-19 virus, it would be unfair to the City of Richmond, to LIEC, and to other municipalities and regional districts if the BCUC were to force this Inquiry on as proposed in Exhibit A-11. To do so would not be in the public interest and would mark the height of irresponsibility. Also, the City of Richmond has made a formal request to the Lieutenant Governor in Council and to the Executive Council of British Columbia (upon whose advice and consent the Lieutenant Governor in Council acts) to issue a direction to the BCUC to immediately suspend and to immediately refrain from any further conduct of this Inquiry. This formal request of the City of Richmond is made on the grounds of the BCUC’s lack of jurisdiction, there being a reasonable apprehension of bias, and on the basis of regulatory capture. Among the evidence submitted to Executive Council is the attached expert report of Marc Eliesen dated January 4, 2021. Based on the above, the City of Richmond and LIEC respectfully submit that any consideration of a resumption of this Inquiry and a proposed regulatory timetable be deferred until the Provincial state of emergency has been lifted and the Executive Council of British Columbia has made a decision on the City of Richmond’s request.   Yours truly,

Anthony Capuccinello Iraci City Solicitor ACI:aci Attachment: Report of Marc Eliesen dated January 4, 2021

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British Columbia Utilities Commission Inquiry into the Regulation of Municipal

Energy Utilities

Order G-177-19

Written Submission by

Marc Eliesen

Prepared for the City of Richmond

January 4, 2021

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Table of Contents

h INTRODUCTION ............................................................................................................................ 2

!!., FACTS AND DOCUMENTS REFERENCED BY THE CITY OF RICHMOND .............................................. 2

!!!: STATEMENT OF QUALIFICATIONS ............................................................................................... 3

IV. EXPERT'S DUTY .......................................................................................................................... 4

V. THE STANDARD OF NATURAL JUSTICE AND REASONABLE APPREHENSION OF BIAS ....................... 5

VI. SCOPE AND PURPOSE OF THE INQUIRY ....................................................................................... 6

VII. QUESTION 1: IS BCUC ABLE TO CONDUCT AN INQUIRY INTO THE REGULATION OF MUNICIPAL ENERGY UTILITIES WITHOUT A REASONABLE APPREHENSION OF BIAS AND IN A MANNER THAT IS IN THE PUBLIC INTEREST? ....................................................................................................................... 7

1) IS REGULATION OF MUNICIPAL ENERGY SERVICES BY THE BCUCAPPROPRIATE? ................................................ 8 11) DOES BCUC HAVE THE AUTHORITY TO CONDUCT THIS INQUIRY? ................................................................. 8 111) WERE COMPLAINTS SUFFICIENTTO TRIGGER A PUBLIC INTEREST INQUIRY? ................................................... 9 IV) WHY DIDN'T BCUC SEEK DIRECTION FROM THE PROVINCIAL GOVERNMENT? .............................................. 10

VIII. QUESTION 2: ARE THE PANEL MEMBERS ABLE TO CONDUCT THE INQUIRY WITHOUT A REASONABLE APPREHENSION OF BIAS? ............................................................................................ 10

IX. QUESTION 3: RECOMMENDATIONS .......................................................................................... 12

APPENDIX A: CURRICULUM VITAE MARC ELIESEN ............................................................................. 14

APPENDIX B: INSIDER REPORTING OF SHAREHOLDINGS BY THOMAS LOSKI ....................................... 15

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I. Introduction

1. I, Marc Eliesen, 9294 Emerald Drive, Whistler, British Columbia, V8E 0G5, am an independent consultant and former executive.

2. I have been asked by legal counsel for the City of Richmond to prepare a report and provide my professional opinion related to my experience. In pat1icular, I have been requested to:

i) Provide an assessment of whether the British Columbia Utilities Commission ("BCUC"), in light of the Facts and Documents described in this report, and based on my professional experience and knowledge, is able to conduct an Inquiry into the Regulation of Municipal Energy Utilities (BCUC Order Number G-177-19), without a reasonable apprehension of bias and in a manner that is in the public interest;

ii) Provide an assessment of whether the Panel members conducting this Inquiry, in light of the Facts and Documents described in this report, and based on my professional experience and knowledge, are able to conduct an Inquiry into the Regulation of Municipal Energy Utilities (BCUC Order Number G-177-19), without a reasonable apprehension of bias and in a manner that is in the public interest; and

iii) Make any recommendations regarding the BCUC Inquiry into the Regulation of Municipal Energy Utilities to ensure that there is no institutional bias by BCUC or any of its Panel members.

II. Facts and Documents Referenced by the City of Richmond

3. On August 1, 2019, BCUC established an Inquiry "to examine the regulation of energy utilities affiliated with municipalities and regional districts. The Inquiry will explore issues related to ownership structures and operational arrangements of utilities affiliated with municipalities and regional districts including the appropriate regulatory status of such organizations under the Utilities Commission Act ("UCA") in order to provide clarity to the BCUC, utilities and municipalities."

The Commission acknowledges that a "public utility" does not include "a municipality or regional district ... within its own boundaries." However, it suggests that the ownership and operating structures to provide environmental and economic benefits by the municipalities and regional districts "has become complex."

4. On August 2, 2019, BCUC appointed a Panel for this Inquiry naming Commissioners Tom Loski, Carolann Brewer, William Everett and Bernard Magnan, to conduct the review of this Inquiry, with Commissioner Tom Loski designated to serve as the Chair of the Panel (Exhibit A-2).

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5. Mr. Tom Loski was appointed as a BCUC Commissioner by the BC Government in December 2018. As noted by the BCUC, Mr. Loski "spent the majority of his career with the FortisBC Group of companies and its predecessors, where he held a variety of senior management and executive roles." In addition, "for many years Tom was responsible for the development and implementation of corporate regulatory strategy as Chief Regulatory Officer for FortisBC, a position he subsequently held at BC Hydro. (I3CUC Commissioner I3iographies).

6. Following the announcement of the Inquiry, the BCUC received written Intervener submissions from Fo1tisBC, BC Hydro, and a number of municipalities and associations. The municipalities intervening at this Inquiry provide locally sourced energy services to benefit their residents and reduce the need for natural gas and electricity. (Exhibit C Intervenor Documents).

Ill. Statement of Qualifications

7. I have a professional background that includes over 40 years of experience in senior executive positions in both the public and private sectors and in the energy industry of Canada. I have also been involved in international power projects in the Asia Pacific region.

8. As part of my range of experience, I have participated in numerous regulatory hearings and therefore have a solid understanding and sound working knowledge of the mandate and administration of provincial and federal regulatory bodies such as the Canada Energy Regulator (CER, fom1er ly National Energy Board) and BCUC. My experience provides an appreciation of the principles of natural justice and the mles and practices of quasi­judicial boards and commissions.

9. My executive positions have included:

• Chaim,an and President ofTntemational Power Group Inc., a joint venture of Asea Brown Boveri Inc., Westcoast Energy Inc., and the BC Development Group.

• President and CEO, of British Columbia Hydro and Power Authority ("BC Hydro")

• Chairman and CEO, Ontario Hydro

• Deputy Minister, Ministry of Energy, Province of Ontario

• Chaimian, Manitoba Hydro

• Deputy Minister, Ministry of Energy and Mines, Province of Manitoba,

• Chaim1an and CEO, Manitoba Energy Authority

• Deputy Minister to Premier of BC and Planning Secretaiy to Cabinet

• Deputy Minister to Premier of Manitoba and Pla1ming Secretary to Cabinet

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10. I have worked for seven governments in Canada, both at the provincial and federal levels and have been a Deputy Minister for nine ministers of the crown. I have held a partnership with the management consulting firm Peat Marwick Stevenson and Kellogg ("KPMG") where I held the position of National Director of Government Services. I have been a corporate director of a number of companies including Suncor Energy, Ontario Hydro, Manitoba Hydro and BC Hydro.

11. I have participated in a number of regulatory hearings over the course of my career. I paiticipated as a commentator at the CER No1them Gateway Project hearing and a<; a qualified expe1t intervenor at the CER Trans Mountain Expansion Project heai·ing. I was an expert intervener at the BCUC Site C inquiry and prepared two reports for the Commission. 1 was also asked to appear before the Commission as a technical expert. The Site C Inquiry Commission Panel "found Mr. Eliesen 's submissions regm·ding project budget and schedule to be very informative and his analysis assisted the Panel in a number of findings in the Final Report. " 1

12. I participated as an expert intervener at the BCUC Inquiry into Gasoline and Diesel Prices in BC in a<;sociation with Economist, Robyn Allan. We submitted two repo1ts to the Panel. The Panel 's final report accepted our analysis on the lack of market competition due to oil company concentration as well a<; our recommendations regarding government regulation to restore fair pricing practices within the province.

13. A copy ofmy Curriculum Vitae is attached a<; Appendix A.

IV. Expert's Duty

14. I ce1tify that I am aware of my duty as an expe1t to assist BCUC's Inquiry into the Regulation of Municipal Energy Utilities and not be an advocate for any patty. This duty prevails over any obligation l may owe to any party, including the City of Richmond on whose behalf I have been engaged.

15. I further certify that I have made this report in conformity with this duty and will, if called on to give oral or written testimony, give that testimony in conformity with this duty.

16. In particular, in preparing this report, I acknowledge that it is my duty to:

• Provide evidence that is fair, objective and non-pa1tisan;

• Provide evidence that is only related to my area of expertise; and

• Provide such additional assistance as may reasonably be required to detennine a matter at issue.

1 BCUC Order Num bcr F-6-18, page 6 of 11.

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V. The Standard of Natural Justice and Reasonable Apprehension of Bias

17. l11e BCUC is an independent quasi-judicial regulatory tribunal established by the Government of BC and operates under the Utilities Commission Act (UCA). It issues orders and decisions based on evidence and abides by the standards of procedural fairness and natural justice.

18. There has been extensive judicial scrutiny on the first principle of natural justice that "no man should be a judge in his own case (audi altcram partem)." However, there has been limited judicial scrutiny on the second principle of natural justice, "the concept of attitudinal bias (nemo judex in usa causa debet esse). "2

19. The principle of natural justice is intended to protect against a decision maker's arbitrary exercise of power. '!11at is, natural justice is based on the notion that a decision is not valid if it was influenced by any financial consideration or other interest-or bias-of the decision maker.

20. ll1e integrity of a regulatory body such as the BCUC depends upon unbiased decision­makers in order to preserve the public' s confidence in their objectivity and impartiality. "Simply put, public confidence in our legal system is rooted in the fundamental belief that those who adjudicate in law mucit always do so without bias or prejudice and must be perceived to do so."3

21. The test for apprehension of: or reasonable likelihood of: bias has been discussed in the judgment of the Supreme Comt of Canada in Committee for Justice and Libert y, et al. v. National Energy Board et al. (1978) S.C.R. 369.3.

22. Chief Justice Laskin's j udgment clearly articulates that '~justice must not only be done, but must manifestly and undoubtedly be seen to be done. Given this rationale, the Chief Justice held that a breach of the rule occurs whenever there is a reasonable apprehension of bias, and that it is unnecessary to show any likelihood ofbias."4

23. In the Supreme Court judgement for the Committee for Justice and Liberty, et al. v. National Energy Board el al. (1978), Judges Laskin, Ritchie, Pigeon, and Dickson s tated:

"thejimction of the Board is quasi-judicial, or, at least, is a function which the Board must discharge in accordance with the rules of natural justice: and if not necessarily the full range of such rules as would apply lo a Court (though the Board is a court qf record under s. 10 of the Ac/) certainly lo a degree that would reflect integrity of its proceedings and impartiality in the conduct of those proceedings. A reasonable apprehension of bias arises where there exists a

2 The National Energy 13oard Case and the Concept of At.Litudinal 13ias, David Phillip Jones, page 476. 3 Wewavkum Indian nand v Canada (2003) 2 SCR par 57. 4 Phillip Jones, Op Cit, page 463.

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reasonable probability that the judge might not act in an entirely impartial manner .... The test of probability or reasoned suspicion of bias, unintended though the bias may be, is grounded in the concern that there be no lack of public confidence in the impartiality of adjudicative agencies, and emphasis is added to this concern in this case by the fact that the Board is to have regard for the public interest. "5

VI.Scope and Purpose of the Inquiry

24. On August 1, 2019, BCUC commenced an Inquiry "to examine the regulation of energy utilities affiliated with municipalities and regional districts" notwithstanding the Commission's recognition that "Section 1 of the UCA states that a "public utility" does not include "a municipality or regional district in respect of senrices provided by the municipality or regional district within its own boundaries . .. " (Exhibit A-1)

25. Upon the completion of its Inquiry, ''the BCUC will consider if it is appropriate or necessary to:

i) seek advance approval from the Government of BC to offer a class of cases exemption to municipalities and regional district energy systems in certain circumstances; and/or

ii) make a recommendation to the Government of BC to review the definition of a "public utility" within the UCA as it relates to such entities." (Exhibit A-1)

26. Unlike recent references from the BC government for inquiries into BC Hydro's Site C Project and the inquiry into Gasoline and Diesel Prices, the Inquiry into the Regulation of Municipal Energy Utilities was initiated by BCUC under its own authority.

27. BCUC stated that it "has received questions and complaints from individual stakeholders regarding such entities and their need for regulation. Thus, the BCUC seeks to achieve clarity regarding the appropriate level of regulation required to meet the needs of stakeholders while respecting existing oversight tools and objectives at the local government level." However, BCUC has not provided any details respecting which individual stakeholders filed complaints, or the nature of their concerns.

28. The initial regulatory timetable provided by the Commission on August 1, 2019, established September 12, 2019, as the deadline for intenrener registration, with October 24, 2019 as the deadline for Intenrener written submissions and letters of comment. The Commission indicated that the timetable for further process events was to be determined. (Exhibit A-1 ).

5 Committee for Justice and Liberty et al. v . National Energy Board et al., (1978) l SCR 369, page 371.

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29. On December 5, 2019, BCUC issued an order stating it had "reviewed the submissions and considers that it is now appropriate to seek submissions from interveners on further process." As well the Commission established that the filing date for intervener evidence would be February 13, 2020 with the Information Request process to between March 5, 2020 to April 2, 2020, with the further process timeline to be determined. (Exhibit A-6).

30. On January 28, 2020, the BCUC released an updated timetable indicating that the deadline for Intervener evidence had been extended to April 2, 2020 and that the Information Request process would extend from April 30, 2020 to August 20, 2020 with the further process timeline to be determined. (Exhibit A-7).

31. On March 17, 2020, by Order G-56-20, the BCUC adjourned the Inquiry until further notice due to the pandemic.

32. On July 16, 2020, the BCUC, after inviting submissions delayed the restart of the Inquiry, and subject to further submissions, the BCUC now proposes to restart the Inquiry on March 31, 2021.

VII. Question 1: Is BCUC Able to Conduct an Inquiry into the

Regulation of Municipal Energy Utilities Without A Reasonable

Apprehension of Bias and in a Manner that is in the Public

Interest?

33. There are a number of issues to consider in addressing the question of whether BCUC is able to conduct an Inquiry into the Regulation of Municipal Energy Utilities without a reasonable apprehension of bias and in a manner that is in the public interest. These issues include:

i) whether regulation of municipal energy services by the BCUC is appropriate;

ii) whether the BCUC has the legislative scope and authority to conduct this inquiry;

iii) whether the range of questions and complaints BCUC has received from individual stakeholders regarding such entities, and their need for regulation, contain fact and substance sufficient to trigger a public interest concern for an inquiry; and

iv) why BCUC would not have sought an approving order from the Government of BC prior to initiating the inquiry.

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i} Is regulation of municipal energy services by the BCUC appropriate?

34. I have reviewed the documents that have been submitted by the BCUC and lntcrveners to this Inquiry as requested by the City of Richmond.

35. There docs not appear to be an urgent, obvious or compelling rationale, in my professional opinion, to require the regulation of municipal or local district energy services.

36. At a number of hearings the Commission has set out the criteria it deems important regarding the need to regulate in the public interest to ensure safe and reliable services at reasonable prices. Details regarding the Commission's criteria have been provided by the Cities of Vancouver (Exhibit C4-2, pages 3-5) and, Notth Vancouver (Exhibit C9-3, pages 15-17). In my opinion, the criteria relate lo monopoly or anti-competitive forces and cannot be applied to, nor are they relevant to, the local municipal level.

ii) Does BCUC have the authority to conduct this Inquiry?

37. Recognizing that I am not a lawyer, and as such my opinion on the legislative authority ofBCUC lo establish the Inquiry is not a legal opinion, I am however qualified lo make an opinion on BCUC's decision to establish this inquiry based on my extensive experience as an executive, including my position as fonner CEO of BC Hydro, and my extensive experience in developing public policy, including my position as fonner Cabinet Planning Secretary for the BC government.

38. The UCA does not provide clear, unconlestable, legislative authority for the BCUC lo conduct this Inquiry. In a situation where the outcome portends an expansion of lhe BCUC scope of authority and implies commercial benefits to the ctment stakeholders that fall under BCUC's purview, the potential to question the motivation arises. In such a situation, an administrative body charged with protecting the public interest, must proceed with caution.

39. A regulatory body seeking to adopt the appropriate course of action on matters that could bring about a significant policy change to the regulatory framework, and by vi1tue of that change has serious commercial and public interest implications, it is imperative that the legal and administrative authority for the entity driving those potential changes not only be, but be seen to be, impartial to the outcome.

40. Section 82 (1) (a) of the UCA states that wn,c commission may, on its own motion ... inquire into, hear and detennine a matter that under this Act it may inquire into, hear or determine on application or complaint."

41. Section 72 (1) slates that, "commission has jurisdiction lo inquire into, hear and dete1mine an application by or on behalf of any party interested, complaining that a person constructing, maintaining, operating or controlling a public utility service or

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charged with a duty or power relating to that service, has done, is doing or has failed to do anything required by this Act or another general or special Act, or by a regulation, order, bylaw or direction made under any of them. "

42. Public Utility is defined in the UCA and, as acknowledged by BCUC in Exhibit A-1, explicitly excludes "a municipality or regional district in respect of services provided by the municipality or regional district within its own boundaries."

43. The legislative authority of BCUC to undertake this inquiry is, at best, questionable. The Act states that the Commission may only respond to complaints respecting public utility services while services provided by municipal and regional districts are explicitly excluded from the definition of public utility.

44. Certainly BCUC's legal authority to respond to complaints and inquire into this matter may yet be a matter for the courts to determine should parties to this inquiry elect to do so. My opinion, however, is that as long as there is a question respecting BCUC's authority to conduct this Inquiry, an alternative approach to the establishment of this Inquiry would have better served the public interest. When there is lack of clarity about a regulator's authority, it necessarily raises questions about the regulator's motivation and sets the stage for a reasonable apprehension of bias.

45. BCUC having received questions and complaints from its stakeholders should have recognized the potentially contentious nature of the issue, particularly since it impacts entities established by the Province such as BC Hydro, municipalities and regional districts.

iii) Were Complaints Sufficient to Trigger a Public Interest Inquiry?

46. Significant jurisdictional and commercial interests are at stake for FortisBC and BC Hydro. However, at no time has the BCUC determined it necessary to reveal the nature of the questions and complaints it received or which stakeholders made them. BCUC simply wants interveners to accept that the material it received was substantial enough for it to initiate this Inquiry.

47. In my opinion, the BCUC should have made the source and the nature of the complaints, public. When it is unclear who has complained and the substance of their concerns, there remains a question as to whether BCUC took it upon themselves to further this Inquiry or whether in fact the concerns were serious enough to trigger it.

48. When it comes to a reasonable apprehension of bias, a reasonable person has to ask themselves what circumstances exist that might suggest there is an opportunity for a regulator to benefit from the outcome of a hearing. In this instance, capturing municipalities and regional districts under the regulatory purview of BCUC extends the reach and authority of the Commission. Having the substance of the complaints on the record would serve to mitigate any concerns that the Inquiry was initiated to advance the regulators authority.

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iv) Why didn't BCUC seek direction from the Provincial Government?

49. There have been numerous formal and informal statements made by the Provincial Government advocating greater municipal and regional district determination, particularly as it relates to energy initiatives. BCUC should have been aware of the BC government's stated policy position. 6

50. Although it is unknown who the stakeholders were that raised questions and made complaints that motivated BCUC to initiate the inquiry, since the scope of the inquiry is to address whether municipalities energy utilities should be regulated, and thus their self­determination constrained, the very substance of this inquiry contradicts stated government policy.

51. We are now aware because of evidence on the hearing record, that BC Hydro and FortisBC wish to limit the legal, commercial and policy making authority of municipal and regional districts by bringing the provision of municipal and regional district energy services under the purview of BCUC. 7

52. It should be noted that the current BCUC Inquiry into Indigenous Utilities Regulation was undertaken by request from the Government of BC ( Order in Council 108). Its terms of reference covered areas and questions very similar to those being posed at this Inquiry into Municipal Energy Utilities (Order G-62-19,Exhibit A-1).

53. Prior to initiating the Inquiry, BCUC could have reasonably anticipated that it would be highly contentious because of the policy and commercial implications. In order for BCUC to not overstep its boundaries by becoming a policy maker rather than a regulator, it should have sought direction from the Government of BC prior to initiating this Inquiry on its own accord. I recognize that the BCUC is an independent regulator, but since the actions it is proposing in this Inquiry have at its core fundamental policy implications, the regulator should have established its authority before initiating on its own. It is not in the public interest for a regulator to seek to expand its authority and engage in actions of public policy particularly when such policy appears in direct contradiction to stated government intentions.

VIII. Question 2: Are the Panel members able to conduct the Inquiry without a Reasonable Apprehension of Bias?

54. On August 2, 2019, BCUC Chair, David Morton appointed Commissioners Tom Loski, Carolann Brewer, William Everett and Bernard Magnan as the panel to conduct the review of the Inquiry, with Mr. Loski to serve as Chair. (Exhibit A-2).

6 See British Columbia Municipal Electrical Utilities, Exhibit C2-2, pages 11-13; City of Vancouver, Exhibit C4-2, pages 11-12; City of Richmond, Exhibit C l 2-2, pages 17-18; City of Burnaby, Exhibit Cl5-2, pages 6-10. 7 See: BC Hydro and Power Authority, Exhibit C l -2 and FortisBC, Exhibit CS-3.

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55. Commissioner Loski's background is a relevant consideration when evaluating whether the panel members are immune to a reasonable apprehension of bias. He was appointed as full-time commissioner in December 2018. According to the Commission, Mr. Loski, "brings with him 34 years of experience working with energy utilities in British Columbia. Tom spent the majority of his career with the FortisBC group of companies and its predecessors, where he held a variety of senior management and executive roles. This experience included positions in finance, strategic planning, operations, marketing, energy supply, regulatory affairs and customer service, where he served as the Vice President responsible for the successful repatriation of the customer service function, after it had been outsourced 10 years previously. For many years, Tom was responsible for the development and implementation of corporate regulatory strategy as the Chief Regulatory Officer for FortisBC, a position he also held at BC Hydro. He is a member of the Chartered Professional Accountants of BC, earning his Certified Management Accountant designation in 1985."

56. BCUC acknowledges that Commissioner Loski has been actively involved in BCUC regulatory hearings on behalf of Fortis BC and BC Hydro, both major Interveners in this Inquiry and parties who stand to commercially benefit from a determination that municipalities become subject to BCUC regulatory authority. Commissioner Loski was the Chief Regulatory Officer for both FortisBC and BC Hydro.

57. Commissioner Loski has not followed a precedent set by his fellow panel member Commissioner Everett at a prior BCUC hearing. When faced with a similar situation that could give rise to a reasonable apprehension of bias, Commissioner Everett- through the Commission Secretary- sent a letter advising parties to the hearing of the potential issue.

58. BCUC requested that "if any party believes that a reasonable apprehension of bias may exist as a result of Commissioner Everett continuing to be a member of the panel. . . then the party should file its written objection or questions .... If any objections are received, further process may be determined before Commissioner Everett makes a decision regarding whether to recuse himself." (Project 1598924 Exhibit A-4).

59. FortisBC is owned by Fortis Inc., a publicly traded company. When Commissioner Loski was employed by FortisBC he filed insider trading reports as is required by securities legislation. The reports are available through SEDI (System for Electronic Disclosure by Insiders). The holdings declared include both shares and options. It is not clear when or if Commissioner Loski sold his shares or exercised his options, however, the information is provided in Appendix B to indicate that Commissioner Loski previously held an interest in the ongoing financial stability of Fortis.

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60. UCA Section 11 (1) states that "A commissioner or employee of the commission must not, directly or indirectly, hold, acquire or have a beneficial interest in a share, stock, bond, debenture or other security of a corporation or other person subject to regulation under Part 3 of this Act ... (2) A commissioner or employee of the commission, in whom a beneficial interest referred to in subsection (1) is or becomes vested, must divest himself or herself of the beneficial interest within 3 months after appointment to the commission or acquisition of the property, as the case may be."

61. Although it is expected that the requirements of the UCA have been met by Commissioner Loski, given that it is a matter of the public record that he held shares and options in Fortis Inc., confirmation that he no longer holds a beneficial interest and when those holdings were divested would be advisable.

62. In this regard, although it is not a requirement of the UCA to disclose pension arrangements from prior employers, if Commissioner Loski has a pension plan contingent on the financial stability of FortisBC it might be construed that he has a conflict of interest in decisions that might impact FortisBC's financial position.

63. Interveners at this hearing have not been made aware of working relationships Commissioner Loski may have had with FortisBC and BC Hydro legal and other staff participating at this Inquiry. Commissioner Loski could have been more forthright about his work history and working relationships which, given Commissioner Everett's actions, suggest a precedence for doing so.

64. Considering Commissioner Loski's employment history at both FortisBC and BC Hydro, the disclosure practice of Commissioner Everett, and publicly available information on Commissioner Loski's shareholdings in Fortis Inc., in my expert opinion, there is sufficient evidence that suggests a reasonable apprehension of bias exists with respect to Commissioner Loski.

IX. Question 3: Recommendations

65. Recommendation #1: The BCUC should have sought confirmation from the Government of BC that it was appropriate for the Commission to initiate this Inquiry. Since there is a considerable period of time to complete the Inquiry, the Commission should suspend the Inquiry pending confirmation from the Government of British Columbia that it has both the authority and approval to undertake this Inquiry. In this way, no participant can suggest that the BCUC is using this Inquiry as a means to expand its regulatory scope and authority.

66. Recommendation #2: The BCUC should immediately make available to all participants at the hearing the specific questions and complaints it has received so that any Intervener will have a transparent understanding of the issues that triggered the Inquiry.

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67. Recommendation #3: There is areasonable apprehension of bias related to Commissioner Loski as both a member and chair of the panel.fumy opinion, Commissioner Loski should recuse himself

Submitted by Marc Eliesen

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Appendix A: Curriculum Vitae Marc Eliesen

Mr. Eliesen has had a lengthy and successful professional career in senior executive positions both in the energy and utility business and in public service. He has worked as the Chief Executive Officer for a wide number of Crown Corporations, private joint ventures and at the Deputy Minister level for departments of Government. In addition, Mr. Eliesen has provided strategic business management and public policy advice to senior personnel in the private sector and in government on a wide variety of issues, with emphasis on energy, investment, industrial development and international trade.

In the energy and electricity utility business, Mr. Eliesen has held the following senior positions:

• Chairman and President of BC International Power Group Inc., a joint venture of Asea Brown Boveri Inc., Westcoast Energy Inc., and BC Trade Development Co., (1994- 1997)

• President and Chief Executive Officer of the British Columbia Hydro and Power Authority, (1992 - 1994)

• Chairman and Chief Executive Officer, Ontario Hydro, (1991 - 1992) • Deputy Minister of Energy, Province of Ontario, (1990 -1991) • Chairman, board of Directors, Manitoba Hydro, (1984 - 1988) • Deputy Minister, Energy and Mines, Manitoba, (1982 - 1984) • Chairman and Chief Executive Officer, Manitoba Energy Authority, (1982 - 1988)

Mr. Eliesen started in public service as an economist with the Federal Department of Finance and the Federal Department of Industry (1966 - 1970). He became Assistant Deputy Minister of Finance in Manitoba and then Deputy Minister to the Premier of Manitoba and Planning Secretary to the Cabinet (1970 - 1974). He was subsequently appointed Deputy Minister to the Premier of British Columbia and Planning Secretary to the Cabinet (197 4-1975). In summary, Mr. Eliesen has worked for seven governments in Canada, both federal and provincial, and has been a Deputy Minister of Government for nine Ministers of the Crown.

During his professional career, Mr. Eliesen has been a Partner and National Director of Government Serv ices with the management consulting firm of Peat Marwick Stevenson and Kellogg (KPMG) and has been a Corporate Director of many organizations and businesses, including Suncor Corporation, Manitoba Hydro, Ontario Hydro and BC Hydro.

Since 1998, Mr. Eliesen has provided consulting services to a variety of governments, First Nations, and private companies in the energy development field.

14

6607359

Appendix B: Insider Reporting of Shareholdings by Thomas Leski l021-01~G 16:14 Ei

Transactions sorted by : Insider Insider family name : Loski I starts with ) Given name : Thomas I Startswitll) Transaction date range : January 1, 1990-January I, 2021

Insider name: Losi<i, ThomasAll:ert

Legend: 0 • 0 nginal lransaction, A . FJSI amendment to transaclion, A' • Secood amendment to Ira nsadioo, AP. Amer1dmer11 lo papei fiilg, e~.

Warning:

Transacton ID

Insider's Relaionsllipto lssuer.1 -lssuei, 2 • SUbsicliaryoi Issuer, 3 -10%Seanity Holdero'lssuer, 4-Oiredol cl Issuer, 5-SeniorOffcefcllssuer, 6-0iedor or Senior Officer ol 1()';1, Security Helder, 7 • Oied01 01 Se~or Ob ol lnsifer or Sobsiiiary al Issuer (<r.her than in 4,5,6), 8-Deemed Insider • 6 Months befOle beooming Insider.

The dosing balance of the ' equ~a•ent number or v,lue ol undert,,ing securilies" relleds the' total number or value of under!yir,;i secu~• to wtich the derivali'le contracts hekl by the insider relate. This disdoGure does not mean and should not be taken to ndicatetllalthe undel)'il9 securiies have, in fact. been acquired or disposed of bylhe inside1.

Date of Date of filing Ownership fype Na:Jre of transa:t1011 YYYY-Ml,1-00 (and regrsterec tra·saction yvyy.rm-oo holder. rf

ap,lrcableJ

Nu~ber or ,alue acquire~ or d1s,osed o'

Unrt ,nee or Closing exe:c1se balaice pn:e

lns1de(s Con~ers1on Dale of c.lcu lzted or exercise expiry or balne pn:e malunty

YY'iY-MM-DD

Unie1yrng secLnty Equ11alen: Clos ng ces191at1on numbe1or balance of

1~1ue of equ1•r.11ert under·img number or secmtres v,lue of acquired or underlying d1s~osed of sec unties

Issuer name: Fortrs In~

lnsidefs Relationship to Issuer. 7 -Director or SeniOI Ofocer of lrnidel or Subsi<ialy ol lssuei (ollierthan 111 4,5,6)

ceased to be Insider. Notapi:licabie

.,.

6607359

Trarsact101 ID Dale of Dale offl1ng Owners~1p type Na:ure of lrarsacbon YYYY-MM-OD (ard reg1sterec tramctJon YYYY-MM-0D ~oce<, If

appl,cable)

Security designation: Commoo Shares

114S31B 20~1001 101011-26 c..tid or Dirediai : 00 -Opeoi1g Me,.,el.O<li B,Janc,.olill SEDI

R,port

1745319 201011-23 10101~26 ComdorDirediai : ID-~J!iooor MtM LOiii !::"' ii Ille pi,lc

111~ 20101001 10101~ Oi'ed Own!tlllip: 00 · °""'ilg BaloJ1ce.klilillSEDI R,port

1745320 20~11-24 10101~26 Oi'eaOwn!tlllip: ID -A,quisiJola <i,posija, ii Ille pi,ic motol

1749260 20~12-01 101012-02 Oi'eaOwneMp: 311 -AcquisiJola <i,posiia,u,c!Ef a pord,-i1plon

Security designation: Optioos (Comrron Shares)

17166<9 20~1001 10101~ lliea Own..,.;p: 00-0peoi,g e,~nc,.•ilill SEDI R,port

Number or value aq u red or disposed of

,:ro

,:ro

♦l88

l.r11 pnce or Closing exercise ba ance pn:e

ll .9300

ll.9300

J:1,11)50

lOO

335

635

1.133

11,868

·2·

lns1ce~s Conve·s1on Date o' calc~lateo or exercise expiry or balance price ma:un:y

YYYl'-M~'-DO

Uncery1rg security ces1gnat on

C0111111X1 Slla!es

Equivalert Closing numoer or ba a1ce of ,alue of eqJ,valent undert11rg number or sec unties \'al ue of acqu1re,j O'. undertying d s:>0sed of secLr:t1es

11861