News Release 10 June 1999

FOR IMMEDIATE RELEASE

EUB ADOPTS NEW ENFORCEMENT PROCESS ENFORCEMENT LADDERS

Calgary, Alberta (10 June 1999) The Alberta Energy and Utilities Board (EUB) has adopted a new enforcement process known as Enforcement Ladders, which establishes guidelines for EUB enforcement actions against the energy and utilities industry for regulatory non-compliance.

Under the ladder concept, initial enforcement action is determined by the severity of the non-compliance event or issue, and is escalated for repeated non-compliance or failure to respond to the EUB's corrective order. It is important to note that no new regulations are being proposed. This enforcement process will:

• result in increased public safety, minimize environmental impacts, and improve energy resources conservation
• help create a level regulatory playing field for industry, and
• improve EUB and industry accountability to the public.

While the ladders are intended to correct non-compliance, the EUB also recognizes and rewards prompt corrective action. Companies which promptly fulfill an order to comply, and which subsequently continue in compliance with regulations, will revert back to a satisfactory status following a non-compliance event.

The enforcement ladders consist of three categories for non-compliance items Minor (lowest), Major and Serious (highest). There are also three steps that are applied in making the ladder work.

Step one determines the significance of the non-compliance by measuring the event or issue against the EUB's definition of Major non-compliance. The EUB states that a Major non-compliance event results in one or more of the following:

• Immediate or potential threat to public safety
• Immediate or potential environmental damage
• Adverse public impact from emissions
• Loss of public rights
• Immediate or potential threat to resource conservation
• Measurement or reporting inaccuracies affecting stakeholders (in excess of $50,000)

If the event or issue does not meet one or more of these criteria, it is Minor. If one or more criteria are met, the non-compliance is Major. If one or more criteria are met and the EUB judges the non-compliance to be combined with either "deliberate disregard for regulations," or "fraudulent activity," then the event or issue is Serious.

Once the level of the non-compliance has been established, step two takes place, which has the company enter the enforcement ladder at the appropriate level and the EUB begins applying the appropriate action.

Finally, in step three, the EUB analyzes the company's response and either closes the file if the response was acceptable, or if not, begins applying escalating consequences. However, the EUB reserves the right to escalate a non-compliance issue to any level should conditions warrant.

The EUB has many enforcement tools available, and makes use of all of them. These enforcement actions include:

• applying non-compliance fees
• closing deficient applications
• charging interest on monies owing
• suspending operations such as gas plants or production
• suspending or rescinding licences
• considering the company's serious non-compliance record when deciding to approve or deny applications
• retroactively correcting data
• removing credit privileges, or
• ordering the forced abandonment or closure of wells or facilities.

The goal of the EUB is an efficient, accountable energy and utilities industry that desires compliance as part of their corporate culture, and which recognizes that the cost and impact of non-compliance is too great to ignore. The EUB believes the industry should be self-correcting NOT self-regulating.

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For further information please contact:

Greg Gilbertson, Senior Advisor
EUB Communications
Tel: (403) 297-3648
Fax: (403) 297-3757
E.mail: greg.gilbertson@eub.gov.ab.ca

NR 99-10