Canada: With Great Power Over Ratepayers Comes Regulation: BCUC Finds Submetering Provider Is Subject To Regulation As A Public Utility
Global Energy and Climate Bulletin

On June 28, 2023, the British Columbia Utilities Commission ("BCUC") released Decision and Order G-168-323, finding that Wyse Meter Solutions Inc. ("Wyse"), a submetering provider, was a "public utility" under the British Columbia Utilities Commission Act (the "UCA") and, therefore, was subject to regulation by the BCUC. The decision confirms that the BCUC's regulatory reach extends to services that may not be considered typical of public utility service, including submetering to tenants and condo owners.

Background

Wyse is a submetering provider that has offered services in British Columbia since 2016. Submetering involves measuring the consumption of electricity, water and sewer, natural gas and/or thermal consumption in individual units of multi-residential buildings (i.e., rental / condo units) downstream of a bulk meter. The associated contracts with building owners are exclusive and long-term (often up to 20 years in length). Individual unit holders (i.e., tenants / condo owners) then enter into a "Utility Services Contract" with Wyse for service to their unit.

In 2021, a complaint was filed with the BCUC alleging, amongst other things, that Wyse was charging customers additional costs (e.g., delivery charges and late fees). The complaint contended that: (1) charging these costs was outside its role of being a submetering provider; and (2) that Wyse was operating as a "public utility" (as defined in the UCA) at multiple premises. After further complaints against Wyse were filed, in 2022, the BCUC determined that a public hearing to investigate Wyse's status as a public utility was warranted.

Wyse asserted that it was not captured by the definition of "public utility" as the building owner (who is a customer of BC Hydro) contracts with Wyse to meter electricity usage within the building. The building owner can then collect payment from the unit holders based on their actual usage of electricity. Wyse claimed that electricity was provided to individual unit holders by building owners through infrastructure within their buildings and, therefore, not by it.

The BCUC Decision

The BCUC regulates public utilities in British Columbia in accordance with the provisions of the UCA. Persons that own or operate equipment or facilities that provide energy services and products for compensation in BC are defined as "public utilities" under section 1 of the UCA, which provides in part as follows:

In determining Wyse's public utility status, the BCUC used the modern rules of statutory interpretation, applied a "fair, large and liberal construction and interpretation" and read the words of the UCA in "their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament". In light of the evidence before it, the BCUC found that:

• As a corporation, Wyse was a "person" for the purposes of determining its public utility status.
• As "essentially a gatekeeper that controls the end-user's access to electricity" through its submetering equipment, Wyse owns or operates in British Columbia equipment or facilities for the sale, delivery or provision of electricity to the public. The BCUC noted, in particular, that the power to connect and disconnect the supply of electricity is an integral aspect of the sale, delivery or provision of electricity and that, without Wyse's submetering services, there could not be "sale, delivery or provision" of electricity to a rental or condo unit holder.
• Wyse was compensated for its activities and services, satisfying the term "compensation" as used in the definition of a "public utility" in the UCA. Like the definition of a public utility itself, the BCUC determined that the definition of compensation was to be interpreted expansively.
• Wyse did not fall into an exclusion category from the definition of a public utility and, in particular, it did not constitute a public utility providing a service or commodity only to its employees or tenants, the so-called "Landlord Exclusion" contained in section 1(d) of the UCA.

Conclusion

The BCUC's analysis confirms that maintaining the "status quo" is not a shield from public utility regulation. Even if a person may not ordinarily be considered to be a public utility, where a person meets the statutory definition of a "public utility" in the UCA, and is not otherwise exempted, it will be subject to BCUC regulation.

Further, as the BCUC noted, while the proceeding arose because of complaints made to the BCUC about Wyse's business practices, the issues raised in this proceeding highlight two of the fundamental functions of public utility regulation; namely ensuring ratepayers: (1) have recourse to raise complaints and disputes; and (2) are not charged an unjust, unreasonable, unduly discriminatory or unduly preferential rate.

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