Dominion Water Power Regulations (C.R.C., c. 1603)

Completion of Initial Development

• 24 (1) As soon as an interim licensee has completed his initial development and has otherwise fulfilled the terms of the interim licence, he shall file in the office of the Director written notice of such completion and fulfilment.

• (2) Subject to subsection (3), the Director shall have an inspection and if necessary a survey made of the works constructed or used and of the lands and waters used or occupied in connection with the undertaking.

• (3) Where the Director deems inspection unnecessary, he may require the interim licensee to file, not later than 60 days after the expiry of the time fixed for completion of the initial development, proof of the completion and fulfilment of the terms of the interim licence, in the form of a statutory declaration satisfactory to the Director.

• (4) Upon compliance on the part of the licensee with the requirements of this section, the Director shall determine a date that, for the purposes of these Regulations, shall be the date of completion of the initial development.

Issuance of Final Licence

• 25 (1) Upon completion of the initial development according to the plans previously approved and upon fulfilment of and compliance with all the terms and conditions of his interim licence and of such of the provisions of these Regulations as are applicable, an interim licensee shall be entitled to the issue of a final licence authorizing the diversion, use or storage of water for the development of energy therefrom, for the utilization of such energy, and for the occupation or use of public lands that, in the Minister’s opinion, are required for the proper maintenance and operation of the works.

• (2) The Minister may issue a final licence in the form of two or more separate indentures, covering the rights granted in respect of the diversion and use of the waters and the occupation and use of the lands that are to be granted but, where such separate indentures are issued, they shall be executed concurrently and the terms and conditions of each indenture shall be deemed to be incorporated in all indentures, and non-compliance with any term or condition in any such indenture shall be taken to be non-compliance with the terms and conditions of all indentures.

• (3) Upon the issue of a final licence, all rights held and obligations assumed under the interim licence shall cease and determine.

• (4) A final licence shall contain

  • (a) the rates or the amounts of the annual rentals payable during the first term of the licence for

    • (i) water used or stored, which shall be at the rates set out in subsection 30(7),

    • (ii) land occupied, and

    • (iii) any other privilege granted; and

  • (b) such other terms and conditions as the Minister may impose.

Term of Licence

• 26 (1) The Minister may issue a final licence for a term not exceeding 50 years from the date fixed in the original interim licence for the completion of the initial development.

• (2) Where a final licence has been in effect for 30 years and upon 12 months’ notice having been given to the licensee by the Minister, Her Majesty may take possession of the works, lands and properties of the licensee, paying compensation therefor in accordance with the principles set out in sections 28 and 29.

• (3) In determining the value of the power development, the Minister may add to the amount determined in accordance with subsection 28(2) a bonus equal to three-quarters of one per cent of such amount for each and every full year of the unexpired term of the licence but in no case shall such bonus be less than five per cent of such amount.

• (4) In valuing works and lands outside the severance line, the Minister may, as provided in section 29, increase the bonus referred to in subsection (3) to an amount not exceeding 20 per cent of the physical value of the works or of the actual cost of the lands.

• 27 (1) Not less than four nor more than six years prior to the termination of any licence, the licensee may apply in writing for an extension of rights held under such licence, and applications may also be filed with the Director by other persons looking to the future utilization of the site to which the licence applies.

• (2) Any application under subsection (1) shall be in such form and contain such statements and information as will satisfy the laws and regulations then in force, and an application for renewal by a licensee shall be accompanied by a suitable undertaking on the part of the licensee that he will comply with all those laws and regulations.

• (3) Upon filing an application for the renewal and undertaking referred to in subsection (2), a licensee will be given preference over other applicants for a licence to use and occupy the waters and lands set out in his licence during a further term, if the licensee has complied with all the requirements of his licence and of the regulations from time to time in force to the satisfaction of the Minister and his proposed use and development of the site is at least as desirable in the public interest as that of any other applicant.

• (4) Within the four-year period immediately preceding the termination of any licence and after such public hearing as the Minister may deem necessary, but subject always to the laws and regulations then in force, the Minister shall determine, in view of all applications then pending for the future occupation and use of the waters and lands connected with the power development, including the applications for renewal, if any, of the licensee, what future disposition shall be made of those waters and lands.

• (5) Where a disposition of the waters and lands referred to in subsection (4), other than a licence to the licensee for a further term, is decided upon, the Minister shall give the licensee not less than three years notice in writing (hereinafter called notice of termination) that from and after the expiry of his licence or from and after such subsequent date as is fixed by the Minister, all further rights of the licensee in respect of the occupancy and use of the waters and lands shall terminate; and thereupon from and after such expiry, or from and after such subsequent date, as the case may be, all further rights of the licensee shall absolutely cease and terminate without further proceeding.

Compensation for Works and Lands

• 28 (1) Upon the expiry of the final licence or upon the expiry of the time fixed in the notice of termination, as the case may be, a power development shall become the property of the Crown and the Minister, or such person as he may designate in that behalf, may immediately and without further proceeding enter upon, possess, occupy, operate and control the power development.

• (2) The Minister shall compute the compensation for a power development on the basis of the figure previously fixed in accordance with section 19 as the actual cost of the development, adjust this figure so as to make allowance for any variation in the purchasing power of the dollar as shown by the official trade index or other official statistics most applicable to the case, and deduct an amount equivalent to the actual loss in value of the works due to their physical or functional depreciation or to other causes.

29 Where it is desired to take over works and lands that are outside the severance line but within the power system, the Minister,

• (a) in determining the compensation to be paid for those works,

  • (i) shall fix a sum that represents their physical value by

    • (A) considering either first cost, replacement cost or any other similar criteria that will enable him to arrive at the physical value of the works, and

    • (B) excluding good will, going concern, franchise value, severance damages and any intangible elements of a like nature, and

  • (ii) may add to the sum representing their physical value an amount not exceeding 10 per cent thereof for the purpose of covering such severance damages as is deemed just;

• (b) in determining the compensation to be paid for those lands,

  • (i) shall take as the basis of such compensation the amount previously established as their actual cost in accordance with section 19,

  • (ii) shall make an allowance for the variation in the purchasing power of the dollar, and

  • (iii) may, in his discretion, add to the result so determined a bonus not exceeding 10 per cent thereof to cover such severance and other intangible values as is deemed proper to allow under the circumstances.

Rentals for the Use of Water

• 30 (1) Rental for water used in the production of power, (hereinafter referred to as rental), is payable annually in arrears, commencing with the date of initial production of power from the development, or from the date fixed in the original interim licence for the completion of the initial development if power has not been produced prior to such date, whether the initial development has been completed or not and notwithstanding any extensions of time granted.

• (2) On or before March 1st in each year, every licensee shall submit a report to the Director in respect of his use during the previous calendar year of water for the production of power, and the Director shall determine the rental payable for such use and shall demand payment of such rental from the licensee.

• (3) If a rental is not paid within 60 days from the date of demand, 10 per cent of the amount of the rental shall be added thereto and the total amount shall bear interest compounded annually at eight per cent from the day of expiry of the 60-day period.

• (4) The rental, together with the 10 per cent added by way of penalty and interest, shall be the first lien or charge upon the water-power development, property assets, rents and revenues of a licensee, and the production of a written statement by the Minister of the sums so payable shall be prima facie evidence of such debt.

• (5) Where any rental remains unpaid for more than one year after demand by the Director, the rental shall again be demanded and, if not paid within 60 days after such demand, the Minister may take such action as he deems necessary.

• (6) The acceptance of rental in any case shall not be, or be deemed to be, a waiver of any of the terms or conditions accepted by the licensee.

• (7) Subject to subsection (12), the annual rental in the 20-year period immediately following the date fixed for the completion of the initial development shall be

  • (a) an amount based upon the horsepower capacity of the initial development as fixed in the interim licence and computed at the rate fixed in the interim licence for the use of water during the life of the interim licence; or

  • (b) an amount based upon the horsepower-year of electrical output and the annual load factor and at a rate not less than the following:

    • (i) where the annual load factor is less than 40 per cent, $1.35 per h.p.-year, and

    • (ii) where the annual load factor lies between

      40 per cent and 50 per cent — $1.25 per h.p.-year

      50 per cent and 60 per cent — $1.20 per h.p.-year

      60 per cent and 70 per cent — $1.15 per h.p.-year

      70 per cent and 80 per cent — $1.10 per h.p.-year

      80 per cent and 90 per cent — $1.05 per h.p.-year

      90 per cent and 100 per cent — $1.00 per h.p-year.

• (8) For the purposes of this section,

  • (a) the output shall be taken as the total horsepower-years developed during the year on the turbine shaft;

  • (b) the annual load factor shall be taken as the ratio of the average load to the maximum load;

  • (c) the maximum load shall be taken as the highest rate of output carried by the plant during the year under normal operating conditions for a period of 20 minutes;

  • (d) the annual load factor in the case of electrical plants shall be calculated as follows:

    ((Total kilowatt-hours generated per annum × 100)) ÷ ((Maximum load of the year in kilowatts × 8 760)) = per cent load factor;

  • (e) in the case of plants other than electrical, the annual load factor shall be calculated by substituting horsepower-years and horsepower for kilowatt-hours and kilowatts in the above formula.

• (9) For the purposes of these Regulations, one horsepower-year shall be taken as the equivalent of 6 535 kilowatt-hours; and the output at the turbine shaft shall be assumed to be the equivalent of 107 1/2 per cent of the output as recorded at the generator switchboard.

• (10) The output and the annual load factor shall be as determined by the Director, who for this purpose may use any available data, such as switchboard records in the case of electrical plants.

• (11) Every licensee generating electrical energy, unless exempted by the Director in writing, shall install an approved recording wattmeter and shall preserve and produce for inspection all records made by the wattmeter.

• (12) The annual rental for water used in the production of power in the Northwest Territories or Yukon Territory is 75 per cent of the annual rental as computed in subsections (1) to (11), inclusive.

Revision of Rentals After 20 Years

• 31 (1) Upon the expiry of the first 20-year period and every 10 years thereafter, the annual rental shall be subject to revision.

• (2) Six months prior to the termination of any 10-year period mentioned in subsection (1), where either the Minister or a licensee deems a revision of the rate of the annual rental per horsepower-year advisable, he may notify the other party to that effect, whereupon both parties shall endeavour to reach an agreement upon the rate for the succeeding 10-year period.

• (3) When agreement is not reached within 90 days after the receipt of the notification mentioned in subsection (2), the Minister may refer the matter to such board, commission or authority as may be created or designated by the Governor in Council for the purpose of considering such matter and reviewing the rentals.

• (4) The board, commission or authority referred to in subsection (3), when recommending the rentals to be charged, shall take into consideration the earning capacity of the plant, the supply of power available therefrom and from any other sources in the district, the average selling price of the power and any special conditions or circumstances affecting the plant.

• (5) The rental for each year of a 10-year period mentioned in subsection (1) shall be based on the actual station output for the year in horsepower-years at the turbine shaft as estimated by the Director and in the case of electrical plants the Director may use switchboard records or any other available data.

• (6) Where a licensee is engaged in the sale of power, an upward revision of the rate of the rental per horsepower-year may be made only if the upward revision does not make it impossible for the licensee to earn a fair rate of return on the actual cost of the physical properties used and useful in connection with the undertaking, and provides for the amortization of such costs, including interest, as may be necessary and legitimate for promoting and organizing the enterprise and providing capital otherwise than as included in the actual cost.

• (7) The costs that are to be amortized shall be fixed in the same manner and at the same time as the actual cost as set out in section 19.

• (8) The fair rate of return referred to in subsection (6) shall be considered as being cumulative from the date upon which the licensee first began the sale of power from the initial development.