Click here for a PDF version of
Click here for Order UE09-04 which adjusts this order
of an application by Maritime Electric Company, Limited for
approval of an Open Access Transmission Tariff.
Thursday, the 26th day of February, 2009.
John Broderick, Commissioner
Anne Petley, Commissioner
Ernest Arsenault, Commissioner
Reasons for Order
2. Position of the Parties
3. Discussion & Findings
Reasons for Order
 This matter concerns an
application under the
Electric Power Act, R.S.P.E.I. 1988, Cap. E-4 (the
Maritime Electric Company, Limited (the "Applicant", "Maritime Electric",
or the "Company") seeking, among other things, an order or orders of the
Island Regulatory and Appeals Commission (the "Commission") approving an
Open Access Transmission Tariff (the "OATT").
 As was previously noted in Commission Order
UE08-08, dated the 31st day of July, 2008, Maritime Electric and the
City of Summerside Electric Utility ("Summerside Electric" or "Summerside")
provide all of the electric energy to Prince Edward Island (the "Province")
customers, with the former providing service to 90% of the electrical
customers in the Province.
 Maritime Electric and Summerside Electric each have the ability to
generate its own electrical energy, but neither have the capacity required
to meet the demand of customers of the Province. Therefore, additional
electric energy is purchased and transmitted to the Province from New
Brunswick providers via two 100MW submarine cables that run under the
Northumberland Strait (the "Submarine Cables").
 In 1976, Maritime Electric entered into a lease agreement which
permits Maritime Electric to operate the Submarine Cables, which run from
Murray Corner in New Brunswick, to Richmond Cove in Prince Edward Island.
On the Prince Edward Island side, the Submarine Cables come ashore in
Richmond Cove, approximately 670 meters from the shore line where the
Submarine Cables connect to a series of parallel transmission lines which
run from Richmond Cove to an electric substation located in Bedeque.
Electric energy which is transmitted across the Submarine Cables is first
introduced to the Province�s electric transmission grid at the Bedeque
 Summerside Electric has previously raised the issue of
"heritage rights" over the Submarine Cables in the context of the OATT
application. However, in Order
UE08-08, dated the 31st day of July, 2008, the Commission determined
that it is without jurisdiction to consider the matter of the heritage
rights to the Submarine Cables.
 As part of their intervention on the Maritime Electric OATT
application, Summerside Electric is requesting the Commission to consider
either a Bypass Equivalent Rate for transmission services between the
Bedeque substation and the Sherbrooke substation, or alternatively, the
development of its own transmission infrastructure between Summerside�s
Ottawa Street substation and the Bedeque substation. This latter option
would require Summerside Electric be permitted to connect to the
Interconnection Facilities at the Bedeque substation.
 Subsequent to the Order of July 31, 2008, Summerside Electric
raised concerns regarding the geographical boundary location distinguishing
federal and provincial jurisdiction as it relates to the Submarine Cables,
the parallel transmission lines leading from Richmond Cove, and the Bedeque
substation (collectively referred to as the "Interconnection Facilities").
Specifically, Summerside requested that the Commission determine which
components of the Interconnection Facilities fall within the jurisdiction of
the Federal Government, and those which fall within the jurisdiction of the
 The Commission provided notice to all of the interested parties on
the 4th day of November, 2008 of the request that had been received from
Summerside in relation to this jurisdictional question. Further, the
Commission requested that any party who wished to make comments in relation
to the jurisdiction of the Interconnection Facilities to file such response
with the Commission by the 21st day of November, 2008.
 On November 21, 2008, the Commission received both an e-mail
response from the solicitor for Maritime Electric as well as a detailed
memorandum. This was the only response received by the Commission.
 On the 5th day of January, 2009, the Commission requested
Maritime Electric provide a technical diagram with a written description of
the interconnection between the parallel transmission coming from Richmond
Cove to the Bedeque Substation.
 On the 15th day of January, 2009, Maritime Electric provided the
Commission with two diagrams and a corresponding legend and brief
description of the Bedeque Substation, and the Murray Corner and Richmond
 No further materials were filed with the Commission.
 These reasons address the jurisdictional issue raised by
Summerside Electric with respect to the federal and provincial jurisdiction
of the Interconnection Facilities.
2. Position of the Parties
 Summerside Electric
submits that the parallel transmission lines leading from Richmond Cove to
Bedeque and the Bedeque substation are within the jurisdiction of the
Commission. In its submission to the Commission, Summerside Electric relied
on the Summary Report that was issued by the Government of Canada after the
completion of the submarine cable project. Summerside Electric notes the
last paragraph of this report which reads as follows:
"The Prince Edward Island System connecting the main grid to the
terminals of the cables will consist of two parallel transmission lines
from the cable terminals at Richmond Cove to the substation at Bedeque
where the circuit breakers are located for switching cables."
 Summerside Electric also notes that paragraph 33 of the
Commission�s July 31, 2008 Order (UE08-08)
"Maritime Electric acknowledges that, in 1976, it entered into a
Lease Agreement with the Province of Prince Edward Island to operate the
cable connection with the mainland. This interconnection agreement
permits it to operate the two-100 MW submarine cables between the
inter-connection points at Murray Corner in New Brunswick, and Richmond
Cove in Prince Edward Island."
 Summerside Electric submits that there is no mention of the
facilities beyond Richmond Cove to Bedeque or within the Bedeque substation.
 Summerside Electric interprets both references as noted above to
mean that the provincial system begins at the cable terminals in Richmond
Cove and that everything from Richmond Cove, including the Bedeque
Substation, is therefore within the Commission�s jurisdiction.
 The Commission notes the quotation taken from the Summary Report
must be considered in the context of the complete report. Further, the
reference in Commission Order
UE08-08 is a statement by Maritime Electric and not a decision of the
 Maritime Electric filed a memorandum with the Commission, dated
November 21, 2008, in which it sets out the issue to be determined as
"Does the Commission have jurisdiction to regulate the operation of
an OATT in respect of Maritime Electric�s system?"
 Maritime Electric argues, based upon a pith and substance
analysis to determine the dominant purpose of the law, that regulation of
the Interconnection Facilities is within the jurisdiction of the Commission.
Maritime Electric further states that the federal government has not
legislated the inter-provincial interconnection and/or the jurisdictional
boundaries for regulatory bodies and a pith and substance analysis supports
the Commission�s jurisdiction of the Interconnection.
 It is Maritime Electric�s position that the Commission has the
requisite jurisdiction to regulate the OATT as applied for, including those
aspects of the OATT that have an incidental impact on the Interconnection
Discussions & Findings
 The Commission notes that
section 92 of the Constitution Act, 1867, states:
"92. In each province the legislature may exclusively make laws in
relation to matters coming within the classes of subject next
hereinafter enumerated; that is to say,
10. Local works and undertakings other than such as are of the
(a) lines of steam or other ships, railways, canals, telegraphs
and other works and undertakings connecting the province with any
other or others of the provinces, or extending beyond the limits of
(b) lines of steam ships between the province and any British or
(c) such works as, although wholly situate within the province,
are before or after their execution declared by the Parliament of
Canada to be for the general advantage of Canada or for the
advantage of two or more of the provinces."
 The Commission notes that the Prince Edward Island Court of
Appeal previously considered the jurisdiction of the Commission in relation
to the transmission of electrical energy from New Brunswick to Prince Edward
Island. Specifically, in Summerside (Town) v. Maritime Electric Limited
 CarswellPEI 34 (P.E.I.S.C.A.D.), MacDonald J. held that an
undertaking connecting one province with another and extending beyond the
limits of a province was a matter of federal jurisdiction. MacDonald J.
further held that the undertaking being considered involved the transmission
of electrical energy from one province to another, and as such, that the
undertaking fell within the jurisdiction of the Government of Canada and not
within the jurisdiction of the Commission.
 Maritime Electric and Summerside Electric have both conceded that
the Prince Edward Island Court of Appeal determined the issue of
jurisdiction over the Submarine Cables in its 1983 decision. However, as has
been noted above, Summerside Electric has subsequently raised the issue of
jurisdiction over the transmission lines from Richmond Cove to Bedeque and
the Bedeque substation, asserting that these facilities are within the
jurisdiction of the Commission.
 By way of background to the 1983 Court of Appeal decision, the
Commission notes that in the early 1980s, the Town of Summerside brought an
application to the Commission seeking an order for "an energy corridor
from Murray Corner, NB via the Interconnection Cable and the Bedeque
substation to Summerside to constitute the carrier for New Brunswick Power
Economy Energy and mainland unit purchases or entitlements". The result
of this application resulted in a stated case by the Commission to the
Prince Edward Island Court of Appeal.
 In his decision, MacDonald J. noted that electricity purchased by
Maritime Electric from NB Power is purchased at Murray Corner, carried
across the Submarine Cables and is introduced into the Province�s
transmission system at a switching station located in Bedeque.
 At paragraph 25 of his decision, MacDonald J. states:
"In the present case the undertaking is one connecting one province
with another province and extending beyond the limits of Prince Edward
Island and I cannot see how anything else can be made of the situation.
Based on the Winner case the undertaking falls within s. 92(10)(a) and
the jurisdiction of the federal government. The undertaking is the
transmission of electrical energy from one province to another thereby
providing mutual assistance during emergencies, improving reliability of
bulk supply through co-ordinated operations and of providing operating
economies by the exchange of surplus power and energy. For one to
attempt severance of the interconnection by declaring that the
undertaking falls within provincial authority would not result in
severance, but a complete destruction of the interconnection. There
would be nothing left for federal control."
 In reaching his decision that the Commission did not have
regulatory control over the Interconnection Facilities, MacDonald J., at
paragraphs 37 and 38, stated:
"The operation of the interconnection, is an indivisible operation
in the transportation of electrical energy between two provinces�.The
operation of the interconnection cannot, in my opinion, be segmented
into provincial and interprovincial components. Neither can it be
segmented between the two effected provinces.
The Province can have no authority because, in placing regulatory
control over the interconnection facilities in the public utilities
commission, it would be affecting a vital part of the management and
operation of the undertaking. Certainly to say who has the right to use
the facilities is a most fundamental control of the undertaking. Having
reached a conclusion that the connection falls with the powers of
parliament, I am also of the opinion that it is not within the
constitutional confidence of this province by reason of section 8 of the
Electric Power and Telephone Act to require the connection to be made
available to another public utility. The province can have no authority
because in placing regulatory control over the interconnection
facilities, it would be affecting a vital part of the management and
operation of the undertaking."
 The Commission notes that the judgment of MacDonald J. states
that the "province can have no authority because in placing regulatory
control over the interconnection facilities, it would be affecting a
vital part of the management and operation of the undertaking."
 The Commission further notes that the decision of MacDonald J.
does not define Interconnection Facilities. However, as noted above, the
application of the Town of Summerside was for an energy corridor from Murray
Corner, NB via the Interconnection Cable and the Bedeque substation
to Summerside to constitute the carrier for New Brunswick Power Economy
Energy and mainland unit purchases or entitlements. [Emphasis Added]
 The Commission believes that the jurisdictional decision of
MacDonald J. is not limited to the Submarine Cables, but also includes the
parallel transmission lines from Richmond Cove to Bedeque and the Bedeque
 In his decision, MacDonald J. stated that electricity purchased
by Maritime Electric is introduced into the Prince Edward Island
transmission system at the Bedeque switching station. The Commission
believes that this statement indicates that all of the equipment and
infrastructure from Richmond Cove to and including certain components of the
Bedeque substation is not part of the Province�s transmission system, and
therefore, within the jurisdiction of the Government of Canada. The
Commission also believes that the term "interconnection facilities,"
which is plural, encompasses more than the singular Interconnection Cable
(as defined by MacDonald J.).
 Therefore, it appears to the Commission that all electrical
components from the point at which the Submarine Cables exit the waters of
Northumberland Strait to the location of the Bedeque substation is
infrastructure dedicated solely for the interprovincial electricity supply
and not part of the PEI transmission grid system.
 However, it further appears to the Commission that the Bedeque
substation infrastructure serves both the interprovincial transfer of
electricity and the operation of the PEI transmission grid system, as
MacDonald J. determined, it is at this point that electrical energy
purchased by Maritime Electric is introduced into the Prince Edward Island
transmission grid system.
 Therefore, the actual point at which federal jurisdiction ends
and provincial jurisdiction begins remains to be determined.
 The Commission is of the opinion that this matter has previously
been determined by MacDonald J. when he stated that the "province can
have no authority because in placing regulatory control over the
interconnection facilities, it would be affecting a vital part of the
management and operation of the undertaking." Further, the Commission
notes that the Supreme Court of Canada refused leave to appeal the decision
of MacDonald J. in Summerside (Town) v. Maritime Electric Limited
 CarswellPEI 34 (P.E.I.S.C.A.D.), and as the decision has not been
overruled, the Commission is bound by the decision of the Province�s Court
 While the Commission is of the opinion that the decision of
MacDonald J., as noted above, is determinative of this matter, it also notes
that the Supreme Court of Canada in United Transportation Union v.
Central Western Railway Corp.  3 S.C.R. 1112, in an 8 to 1
decision, stated that there were two ways in order to determine whether or
not a particular work or undertaking falls within federal or provincial
 The issue to be determined in the United Transportation
case was whether or not the provincial or federal government had
jurisdiction for the purposes of labor relations over a 105-mile section of
railway line situated wholly in the Province of Alberta and operated by
Central Western Railway Corp. ("Central Western"). Dickson C.J. stated that
the railway could be under the jurisdiction of the federal government of
Canada if (a) the railway itself constituted a federal work or undertaking,
or (b) the railway was integral to an existing federal work or undertaking.
 The Commission has previously stated that, based upon the
decision of MacDonald J., it is of the opinion that the Interconnection
Facilities, being the Submarine Cables, the parallel transmission lines
leading from Richmond Cove and the Bedeque substation, are all within the
jurisdiction of the Government of Canada. Therefore, the Commission
believes that the decision of MacDonald J. in Summerside (Town) v.
Maritime Electric Limited  CarswellPEI 34 (P.E.I.S.C.A.D.) is in
accordance with item (a) as set out by Dickson C.J.
 As noted above, both Summerside and Maritime Electric acknowledge
that the decision of MacDonald J., at a minimum, states that the Submarine
Cables are within the jurisdiction of the Government of Canada.
 Therefore, in considering Summerside�s assertion that only the
Submarine Cables are subject to federal jurisdiction, and assuming that the
Commission is incorrect with respect to the decision of MacDonald J. being
determinative of this issue, the Commission has also considered whether any
of the particular equipment leading from the Submarine Cables up to and
including the Bedeque Substation could be considered integral to an existing
federal work or undertaking.
 In West Coast Energy Inc. v. Canada (National Energy
Board),  1 S.C.R. 322, West Coast Energy Inc. owned and operated a
system of gathering and processing pipelines used for the transportation of
natural gas. The gathering and processing lines were situated wholly within
the Province of Alberta but were connected to a distribution system that was
also owned and operated by West Coast Energy Inc. The distribution system
transported processed gas to parts of Alberta, British Columbia and the
 In considering whether the gathering and processing lines were
integral to the distribution system, which had been determined to be a
federal undertaking, the Supreme Court noted that its primary concern was
not limited to a physical structure or its geographical location, but rather
the service provided by the undertaking through the use of its physical
equipment was of primary importance.
 The Supreme Court further noted that the primary factor to
consider is whether the various operations being considered are functionally
integrated and subject to common management, control and direction. Other
relevant questions, although not determinative, will include whether the
operations are under common ownership (perhaps as an indicator of common
management and control), and whether the goods or services provided by one
operation are for the sole benefit of the other operation and/or its
 When applied to the facts of this matter, the Commission notes
Maritime Electric operates, controls and maintains the Submarine Cables,
the potheads in Richmond Cove, the transmission lines from Richmond Cove
to the Bedeque Substation, and the Bedeque Substation;
the potheads in Richmond Cove do not alter or step up or down the
electric energy being transmitted via the submarine cable;
electric energy transferred to PEI via the Submarine Cables is first
introduced to the PEI transmission system at the Bedeque substation; and
the Bedeque Substation performs a necessary function so that the
electric energy transmitted via the Submarine Cables can be introduced
into the PEI transmission grid.
 Based upon all of the foregoing, it appears to the Commission
that all of the Interconnection Facilities up to an including a portion of
the Bedeque substation are under the common management and control of
Maritime Electric, and are integral to the operation and maintenance of the
Submarine Cables. As such, the Interconnection Facilities are not within
the jurisdiction of the Commission but are subject to Government of Canada
authority pursuant to section 92(10) of The Constitution Act, 1867.
 An Order will
therefore be issued implementing the findings and conclusions contained in
reviewing concerns raised by the City of Summerside Electric Utility
concerning the geographical boundary location distinguishing federal and
provincial jurisdiction of the electrical cable interconnection
consideration of the Prince Edward Island Court of Appeal 1983 decision,
Summerside (Town) v. Maritime Electric Ltd. (1983), where Justice
MacDonald clearly concludes that the operation of the Interconnection
Facilities on Prince Edward Island is part of the system connecting two
provinces and thus not within the jurisdiction of the Commission;
reviewing submissions, from both the City
of Summerside and Maritime Electric Company Limited concerning jurisdiction,
in which the City of Summerside argues, among other things, that the 1983
Court decision did not clearly define the point at which the jurisdiction
it appearing to the Commission that all electrical components from the point
at which the submarine cables exit the waters of Northumberland Strait to
the location of the Bedeque substation are infrastructure dedicated solely
for the inter-provincial electricity supply and not part of the PEI
transmission grid system;
it appearing to the Commission that the Bedeque substation infrastructure
serves both the inter-provincial transfer of electricity and the operation
of the PEI transmission grid system;
for the reasons given in the annexed Reasons for Order;
IT IS ORDERED THAT
1. The electrical
transmission infrastructure from the submarine cable infrastructure in
Richmond Cove to the Bedeque substation is part of the interprovincial
interconnection facilities and is subject to the jurisdiction of the
Government of Canada; and
2. The circuit breakers and
reactors within the Bedeque substation which connect the transmission
lines coming from Richmond Cove to the Prince Edward Island transmission
system in the Bedeque substation is the location where provincial
at Charlottetown, Prince Edward Island, this 26th day of February, 2009.
BY THE COMMISSION:
John Broderick, Commissioner
Anne Petley, Commissioner
Ernest Arsenault, Commissioner
Section 12 of the
Island Regulatory and Appeals Commission Act
reads as follows:
12. The Commission
may, in its absolute discretion, review, rescind or vary any order or decision made by it
or rehear any application before deciding it.
Parties to this proceeding seeking a review of the
Commission's decision or order in this matter may do so by filing with the Commission, at
the earliest date, a written Request for Review,
which clearly states the reasons for the review and the nature of the relief sought.
Sections 13.(1) and 13(2) of the
provide as follows:
13.(1) An appeal lies
from a decision or order of the Commission to the Appeal Division of the Supreme Court
upon a question of law or jurisdiction.
(2) The appeal shall be
made by filing a notice of appeal in the Supreme Court within twenty days after the
decision or order appealed from and the Civil Procedure Rules respecting appeals apply
with the necessary changes.