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Bulletin 2007-03

February 20, 2007

Revisions to Directive 019: EUB Compliance Assurance—Enforcement

The Alberta Energy and Utilities Board (EUB) announces clarifications to Directive 019: Compliance Assurance—Enforcement, which came in to effect January 1, 2006. Directive 019 focuses on the enforcement aspect of compliance assurance and applies to all EUB requirements and processes except utility rate matters.

The areas of clarification outlined in the attachment have been developed in response to individual stakeholder feedback received during the last year.

Questions regarding Directive 019 may be directed to the EUB Corporate Compliance Group,
640 – 5 Avenue SW, Calgary, Alberta T2P 3G4; telephone (403) 297-3710; or e-mail ComplianceCoordination@ercb.ca .

<original signed by>

D. K. Boyler, P.Eng.
Executive Manager
Compliance and Operations Branch

Bulletin 2007-03 Attachment: Clarification of Directive 019: EUB Compliance Assurance—Enforcement

Table 1. EUB Enforcement of Low Risk Noncompliance
∙ 1st and 2nd EUB Notice of Noncompliance and Low Risk Enforcement
Additional verbiage to the following question:

When is compliance achieved for this event?
Immediately after the licensee corrects/addresses the Low Risk noncompliance event, notifies the EUB group, and pays the noncompliance fee, if applicable.

∙ 2nd EUB Notice of Low Risk Noncompliance
Additional verbiage to the following question:

What must the licensee do when it receives a 2nd Notice of Low Risk Noncompliance?
Pay any noncompliance fee set out in the 1st notice.

∙ Low Risk Enforcement
Inclusion of “Issuance of an Order (Miscellaneous, Closure, or Abandonment).”

For example, an order will be issued due to unpaid security deposits for noncompliance with the Licensee Liability Rating (LLR) Program, and to licensees that continue to fail to comply with the direction of the EUB.

Table 2. EUB Enforcement of High Risk Noncompliance
∙ High Risk Enforcement Action 1
The following question has been added:

What will happen if the licensee has a subsequent High Risk noncompliance during the period for development and implementation of its action plan?
Subsequent High Risk noncompliance events that occur in the same compliance category during this time will result in additional High Risk Enforcement Action 1. However, if a subsequent High Risk noncompliance during this time results in the determination of persistent noncompliance, High Risk Enforcement Action 2 may be initiated.

∙ High Risk Enforcement Action 2 (Persistent Noncompliance)
The following question has been added:

What will happen if the licensee has a subsequent High Risk noncompliance during the period for development and implementation of its action plan?
Subsequent High Risk noncompliance events that occur in the same compliance category during this time will result in additional High Risk Enforcement Actions 2. However, if conditions warrant, the EUB may escalate a licensee to High Risk Enforcement Action 3.

On Tables 1 and 2 the footnote for both Low and High Risk Enforcement:
*Senior EUB personnel will contact the licensee before enforcement actions are escalated.

Section 5 Enforcement Appeals
Section 5 has been replaced with the following:

Licensees are encouraged to fully discuss enforcement actions with the EUB group prior to filing an appeal with the EUB Enforcement Advisor in the Corporate Compliance Group. Enforcement actions may be overturned at the group level. However, if enforcement actions are sustained at the group level, a licensee may submit an appeal to the EUB Enforcement Advisor. Licensees may appeal enforcement actions to the Enforcement Advisor that have not resulted in prosecution or issuance of a Board Order. The appeal must
∙ be submitted within 60 days of the date of the enforcement action,
∙ be in writing, and
∙ explain why the licensee disagrees with the enforcement decision.

The EUB will consider the information for errors of fact, regulatory requirements, and process. The timeline for a decision on appeals by the Enforcement Advisor is 10 working days after receipt of all required documentation.
If the appeal to the EUB Enforcement Advisor is denied or only partially granted, the licensee may appeal to the Board in writing within 15 days explaining why the licensee disagrees with the decision of the Enforcement Advisor.

Glossary
Focus Refer definition has been clarified and expanded to read:

Focus Refer – An enforcement status that results in
- the processing of applications respecting a specific activity or operation (e.g., pipelines, commingling, waste facilities) as nonroutine, taking into consideration a licensee’s compliance performance in one or more compliance categories or EUB groups,
- the licensee’s applications specific to this activity or operation being brought before the EUB Board for disposition, and
- possible additional terms or conditions on Business Associate codes, licences, or approvals.

For example, a licensee has received a number of High Risk enforcement actions in Field Surveillance’s Pipelines compliance category. The licensee has a subsequent High Risk noncompliance, and senior EUB management decide that High Risk Enforcement Action 3 is appropriate, due to continued licensee poor performance. Focus Refer status is implemented against the licensee, resulting in pipeline-related applications being processed as nonroutine and being brought before the Board for disposition.

Global refer – An enforcement status that results in
- all of the licensee’s applications and decisions being brought before the Board for disposition