2006 BCCA 537 Tsawwassen Residents Against Higher Voltage Overhead Lines Society v. B.C. Utilities Commission

Before:	The Honourable Madam Justice Levine
	(In Chambers)

J.J. Arvay Q.C. and M.G. Underhill	Counsel for the Appellant (CA034328)
D. Austin	Counsel for the Appellant (CA034336)
P.J. Landry, J.K. Herbert and J.R. Devins	Counsel for the Appellant (CA034341)
N. Atchison	In-Person (CA034342)
D.G. Cowper, Q.C. A.W. Carpenter and C. Bystrom	Counsel for the Respondent B.C. Transmission Corporation
C.W. Sanderson, Q.C. and M. Storoni	Counsel for the Respondent B.C. Hydro and Power Authority
Place and Date of Hearing:	Vancouver, British Columbia
October 25, 2006
Place and Date of Judgment:	Vancouver, British Columbia
November 30, 2006

Reasons for Judgment of the Honourable Madam Justice Levine:

Introduction

[1] The applicants sought leave to appeal from the decision of the British Columbia Utilities Commission made July 7, 2006 (the “Decision”), granting British Columbia Transmission Corporation (“BCTC”) a Certificate of Public Convenience and Necessity (“CPCN”) for the construction of the Vancouver Island Transmission Reinforcement Project (“VITR”).

[2] The Decision may be found on the Commission’s website at: <<http://www.bcuc.com/Documents/Decisions/2006/1-VITR%20Decision-July%207%202006%20-%20Web.pdf>>.

[3] On November 7, 2006, I released brief reasons for judgment granting leave to appeal on one ground and dismissing the applications for leave on all of the other grounds, with reasons to follow. These are those reasons.

[4] The applicants, Sea Breeze Victoria Converter Corporation (“Sea Breeze”), Tsawwassen Residents Against Higher Voltage Overhead Lines (“TRAHVOL”), Island Residents Against Higher Voltage Transmission Lines (“IRAHVOL”), and Neil Atchison, were intervenors in the proceedings before the Commission, including pre-hearing consultations and the seven-week oral public hearing held in February and March 2006.

[5] The respondent, BCTC, applied to the Commission for a CPCN to construct transmission facilities to Vancouver Island. British Columbia Hydro and Power Authority (“B.C. Hydro”) intervened before the Commission on this application.

[6] The applications for leave were brought under s. 101(1) of the Utilities Commission Act, R.S.B.C. 1996, c. 473, which provides that: “An appeal lies from a decision or order of the commission to the Court of Appeal with leave of a justice of that court”. While not expressly stated in s. 101, it is accepted that an appeal from the Commission is restricted to questions of law: see Joint Industry Electricity Steering Committee v. British Columbia (Utilities Commission), 2005 BCCA 330 (“JIESC”) at paras. 5 and 75.

[7] The applicants raised 21 grounds of appeal in their submissions on the applications for leave. Some of the grounds overlap, and I condensed them to 15 for the purposes of review. The condensed 15 grounds of appeal, and the applicant or applicants who raised each ground, are set out in Appendix A.

[8] With one exception, all of the grounds of appeal raise either issues of fact or mixed fact and law. The question on which I granted leave, raised by TRAHVOL and IRAHVOL, is a question of law. It is whether existing right of way agreements permit the construction of new overhead transmission lines under Option 1.

[9] While some of the remaining grounds of appeal, as originally expressed by an applicant, referred to jurisdictional, or statutory interpretation or application issues, on review, in the context of the Decision, I concluded that none of these grounds of appeal challenge the jurisdiction of the Commission or raise an issue of the interpretation or application of a statutory provision. All challenge the manner in which the Commission approached its decision-making in the circumstances of this particular case, including its review of the evidence and the factors it considered, the weight it gave to the relevant factors, and the analysis it undertook in reaching its decision. The Commission is entitled to considerable deference in these matters. The remaining grounds of appeal raise no substantial questions of law to be argued, and there is no prospect of an appeal on any of those grounds succeeding on its merits. For those reasons, I dismissed the applications for leave to appeal on all of the grounds of appeal other than the question of the interpretation of the right of way agreements.

Background

[10] Vancouver Island’s current electricity needs are being met by a combination of transmission and on-Island generation. Transmission provides approximately 70 percent of Vancouver Island’s peak load, while on-Island generation provides the remaining 30 percent. Previous decisions of the Commission have recognized the need to upgrade the electricity supply system to the Island. Aging circuits resulting in decreased available transmission capacity mean that Vancouver Island’s power supply system will no longer meet applicable reliability criteria after 2007. In September 2003, the Commission accepted that there would be a capacity shortfall on Vancouver Island commencing in the winter of 2007-2008. Several solutions have been proposed to remedy these energy concerns, including both energy transmission and energy generation alternatives.

[11] BCTC applied for a CPCN for VITR on July 7, 2005, under ss. 45 and 46 of the Act. The purpose of VITR is to reinforce the transmission system serving Vancouver Island and the southern Gulf Islands. BCTC estimated the capital cost of VITR at $245 million and expected that it would be operational by October 2008.

[12] Under s. 45(1) of the Act, a person may not begin the construction or operation of a public utility plant or system without first obtaining a CPCN from the Commission. Under s. 46, the Commission may issue, refuse to issue or issue a CPCN for such projects, subject to conditions as, in the Commission’s “judgment, the public convenience or necessity may require”.

[13] Under the Transmission Corporation Act, S.B.C. 2003, c. 44, and a number of designated agreements with B.C. Hydro, BCTC is responsible for operating B.C. Hydro’s transmission system. BCTC is also responsible for planning, constructing and obtaining all regulatory approvals for enhancements, reinforcement, and expansions to that system. This responsibility includes entering into commitments and incurring expenditures for capital investments. The VITR facilities were to be owned by B.C. Hydro, and operated and maintained by BCTC.

[14] The Commission began its review of VITR in August 2005. In September 2005, Sea Breeze, a private sector company, came forward to the Commission with two projects that would use new direct current technology. Sea Breeze applied for a CPCN for one of the projects, the Vancouver Island Cable Project (“VIC”). The other project, the Juan de Fuca Project (“JdF”), was not within the jurisdiction of the Commission, but was considered by it for purposes of comparison with VITR and VIC.

[15] The Commission encouraged participants to identify any issues that had been considered in previous Commission decisions that they wanted to have included within the scope of this proceeding. During the proceedings, project alternatives and routing options were identified by BCTC and intervenors.

[16] In March 2006, Sea Breeze withdrew from the proceedings as an applicant and became an intervenor. As an intervenor, Sea Breeze continued to provide evidence about projects using the new technology. B.C. Hydro also intervened before the Commission in connection with both applications.

[17] The intervenors against VITR opposed the project on the basis that there were other more reliable and cost-effective alternatives that would use new direct current electrical transmission technology. This new technology would allow the transmission lines to Vancouver Island to be entirely underwater or underground, whereas the technology used in VITR would require extensive overhead transmission lines.

[18] The task before the Commission was to select among competing project alternatives, and among route options and designs for VITR. After a seven-week oral public hearing, the Commission granted BCTC a CPCN for VITR with routing Option 1.

Proposed Project Alternatives

[19] The alternative proposals before the Commission were:

VITR: As proposed by BCTC, this project entailed constructing a new 230 kV alternating current electrical circuit, replacing one of two existing 138 kV transmission lines between BCTC’s Arnott Substation in South Delta and its Vancouver Island Terminal Substation in North Cowichan on Vancouver Island. VITR would run partially overhead and partially underground, along the right of way of the existing 138 kV line. The line would run overhead from the Ingledow Substation in Surrey to the Arnott Substation in South Delta. It would continue through Tsawwassen, where it would be partly underground, and then underwater in the Strait of Georgia, passing in part through U.S. territorial waters. It would go overhead across Galiano and Parker Islands, then underwater to Salt Spring Island where it was to revert and remain as an overhead line until it terminated at the Vancouver Island Terminal in North Cowichan.

The transmission line routing options for VITR, identified by BCTC and intervenors, included three routing options through Tsawwassen:

Option 1: This option would involve the removal and replacement of all the existing 138 kV wooden H-frame transmission lines with a new 230 kV double-circuit line on single pole steel structures. The new line would be within the existing B.C. Hydro Right of Way (“ROW”), which passes through the backyards of more than 150 private residences. After significant opposition from TRAHVOL, BCTC announced, in March 2005, that it would not be recommending Option 1 to the Commission. The Commission ultimately selected this option.

Option 2: This is the option that BCTC recommended to the Commission. It entailed burying the new lines in the backyards of the residents along the ROW. TRAHVOL also vigorously opposed this option on the basis of concerns about adverse health effects from electromagnetic field radiation (“EMF”).

Option 3: This option entailed the removal of one of the existing overhead lines and its replacement with an underground line under the city streets in Tsawwassen. This option was supported by TRAHVOL.

VIC: This project proposal involved the use of new technology using direct current that would allow for transmission lines to be entirely underground and underwater. An underground or underwater cable was to be laid between Pike Lake Substation near Victoria and Ingledow Substation in Surrey. In its application, Sea Breeze estimated that VIC would cost $325 million and be operational by January 2008.

JdF: This project also involved the use of direct current technology that would allow for the transmission line to be underground and underwater between the Port Angeles Substation on the Olympic Peninsula in the State of Washington and the Pike Lake Substation near Victoria. Because it is an international line, the National Energy Board, and not the Commission, has regulatory jurisdiction over it.

The Decision

[20] The Executive Summary of the 210-page Decision sets out the Commission’s conclusions:

EXECUTIVE SUMMARY

In this Decision the Commission has concluded that VITR is a more cost-effective project to meet the load requirements of Vancouver Island than either VIC or JdF. The appropriate analysis for comparing the costs of the three projects is to compare total direct and indirect costs. For the purposes of comparing the total direct and indirect costs, Sea Breeze and BCTC do not agree on two fundamental aspects of the projects: 1) the system benefits and incremental losses from using HVDC Light® technology to meet the needs of Vancouver Island customers, and 2) how JdF will be used, and therefore the costs of using JdF.

The Commission has concluded that the system benefits of HVDC Light® technology are limited to the reduced need for synchronous condensers on Vancouver Island and VAr compensation on the Lower Mainland and accepts BCTC’s calculation of incremental losses. Further, the Commission has concluded that additional firm transmission service must be purchased for the use of JdF in order to meet reliability planning criteria for Vancouver Island. A comparison of the total direct and indirect costs of the three projects turns on these three conclusions. The total direct and indirect costs of VIC and JdF have been found to be approximately $149 million and $126 million, respectively, more than the direct and indirect costs of VITR.

The project alternatives are compared on other project characteristics, including seismic risk, risks of delay, risks of financing, and environmental and health effects. These other project characteristics are not found to be determinative. However, a comparison of the total direct and indirect costs is found to be determinative. Therefore, the Commission has concluded that VITR is a more cost-effective project alternative than either VIC or JdF, and is in the public interest.

In this Decision the Commission has concluded that VITR should be modified, and that Option 1 should replace Option 2 as the route through South Delta. The route options through South Delta and the Gulf Islands are considered and ranked against financial, non-financial and socioeconomic criteria. Although the Commission has approved the least cost route option, the non-financial and socioeconomic criteria are significant considerations relevant to the selection of the preferred route option.

In this Decision non-financial and socioeconomic differences amongst route options are afforded little or no weight where the beneficiaries do not express a preference or the non-financial and socioeconomic differences are in dispute. For example, TRAHVOL does not express a preference for either Option 1 or 2 and views the use restrictions differently than BCTC does. Further, where there are significant financial differences amongst route options and less significant non-financial or socioeconomic differences amongst route options, then the financial differences are afforded considerable weight in this Decision. For example, the aesthetic benefits of undergrounding across the Gulf Islands need to be considered in the context of the significant costs for undergrounding. After considering financial, non-financial and socioeconomic criteria, the Commission has concluded that Option 1 in both South Delta and the Gulf Islands are the preferred route options.

In this Decision a cost control/incentive mechanism is found to be appropriate, in part, because a prudency review and a cost control/incentive mechanism serve different purposes for ratepayers. Further, a cost control/incentive mechanism designed to encourage good management is considered necessary, particularly given the recent management turnover at BCTC.

Factors Considered on Applications for Leave to Appeal

[21] All parties agree that the factors set out in Queens Plate Development Ltd. v. Vancouver Assessor, Area 09 (1987), 16 B.C.L.R. (2d) 104 at 109 (C.A.), are those that the Court considers with respect to granting or refusing leave on an application for leave to appeal from the Commission:

. . . it seems a justice may have regard for one or more of the matters listed below:

(a)

whether the proposed appeal raises a question of general importance as to the extent of jurisdiction of the tribunal appealed from ... ;

(b)

whether the appeal is limited to questions of law involving:

(i)

the application of statutory provisions ... ;

(ii)

a statutory interpretation that was particularly important to the litigant ... ; or

(iii)

interpretation of standard wording which appears in many statutes ... ;

(c)

whether there was a marked difference of opinion in the decisions below and sufficient merit in the issue put forward ... ;

(d)

whether there is some prospect of the appeal succeeding on its merits ... ; although there is no need for a justice before whom leave is argued to be convinced of the merits of the appeal, as long as there are substantial questions to be argued;

(e)

whether there is any clear benefit to be derived from the appeal ... ; and

(f)

whether the issue on appeal has been considered by a
number of appellate bodies ....

[Case citations omitted.]

See JIESC at para. 9; Ashton Mining of Canada Inc. v. Stornoway Diamond Corp., 2006 BCCA 406 at para. 2.

[22] Factors (c) and (f) apply to all of the grounds of appeal. The Commission Panel was unanimous in its decision, suggesting that an appeal is unwarranted. On the other hand, no other appellate body has considered the Decision, suggesting that leave should be granted. As B.C. Hydro suggests in its submissions, the other four factors are more relevant in considering whether leave should be granted on the grounds of appeal raised by the applicants in this case.

Analysis

[23] The applicants do not dispute that in the Decision, the Commission considered and discussed at length the evidence, arguments and issues raised by the applicants and intervenors. The applicants’ grounds of appeal must be considered in the context of the whole of the Decision.

Chapter 1: The Certificate of Public Convenience and Necessity and the Regulatory Process

[24] The Commission began the Decision in chapter one with a discussion of the need for reinforced transmission supply to Vancouver Island, the relevant determinations from past Commission decisions, and the alternative solutions proposed. None of the grounds of appeal challenge this discussion.

Chapter 2: Jurisdiction and Other Legal Issues

[25] In the second chapter of the Decision, the Commission discussed issues relating to its jurisdiction to issue a CPCN. This included references to cases relied on by the applicants on these leave applications, including Memorial Gardens Assn. (Can.) Ltd. v. Colwood Cemetery Co., [1958] S.C.R. 353 and Sumas Energy 2 Inc. v. Canada (National Energy Board), 2005 FCA 377, for the test of what constitutes public convenience and necessity. The Commission quoted (at 11) from Memorial Gardens (at 357):

…it would…be both impracticable and undesirable to attempt a precise definition of general application of what constitutes public convenience and necessity….the meaning in a given case should be ascertained by reference to the context and to the objects and purposes of the statute in which it is found.

As this Court held in the Union Gas case, supra, the question whether public convenience and necessity requires a certain action is not one of fact. It is predominantly the formulation of an opinion. Facts must, of course, be established to justify a decision by the Commission, but that decision is one which cannot be made without a substantial exercise of administrative discretion. In delegating this administrative discretion to the Commission the Legislature has delegated to that body the responsibility of deciding, in the public interest, the need and desirability of additional cemetery facilities, and in reaching that decision the degree of need and of desirability is left to the discretion of the Commission.

[26] The Commission noted (at 15) that it had previously concluded that “…the test of what constitutes public convenience and necessity is a flexible test”, a conclusion with which none of the applicants disagreed.

[27] The Commission also considered (at 11) Nakina (Township) v. Canadian National Railway Co. (1986), 69 N.R. 124 (F.C.A.) (cited with approval in Sumas Energy 2), which dealt with the jurisdiction of the Railway Transport Committee. The Court in Nakina found that the Committee had erred in law in failing to consider, where it was required to have regard to the public interest, evidence of the effect of the closing of a railway station on the economy of the local community. The Court said (at para. 5):

…I would have thought that, by definition, the term “public interest” includes the interests of all the affected members of the public. The determination of what is in the public interest involves the weighing and balancing of competing considerations. Some may be given little or no weight; others much. But surely a body charged with deciding in the public interest is “entitled” to consider the effects of what is proposed on all members of the public. To exclude from consideration any class or category of interests which form part of the totality of the general public interest is according, in my view, an error of law justifying the intervention of this court.

The Commission quoted (at 11) the following passage from Nakina (at para. 10):

For clarity, however, I would emphasise that the error lies simply in the failure to consider. Clearly the weight to be given to such consideration is a matter for the discretion of the Commission, which may, in the exercise of that discretion, quite properly decide that other considerations are of greater importance. What it could not do was preclude any examination of evidence and submissions as to the adverse economic impact of the proposed changes on the affected community.

[28] After a discussion of further submissions on the content of the public interest, the Commission’s determination on this part of the Decision (at 16) was:

Given the need for a project to provide adequate and reliable power to Vancouver Island customers, the Commission Panel concludes that it is in the public interest that the most cost-effective alternative be selected from amongst the competing alternatives. Further delay in finding a solution for Vancouver Island customers is not an option that is in the public interest. Moreover, all the alternative solutions for Vancouver Island customers have adverse impacts. The alternatives, including VITR with its several route options, VIC, and JdF, need to be compared to determine the best, most cost-effective means of supplying power to Vancouver Island. Each alternative has different impacts on interests; some of those interests may be considered public interests and others are private interests. The Commission Panel is of the opinion that both public and private interests should be considered in selecting the project alternative and route option that is in the public interest, although the relative weight placed on the different interests may vary.

[Bold in original.]

[29] The Commission’s discussion and conclusion of the content of the public interest and the test of public convenience and necessity are relevant to the claims by Sea Breeze, TRAHVOL, and IRAHVOL that the Commission erred in holding that public convenience and necessity is to be determined by the most cost-effective option rather than what is in the public interest (Appendix A, 1). The Commission was clearly alive to its obligation to consider all relevant factors, and to determine the appropriate balance in the context of identifying a viable alternative to meet the needs of Vancouver Island residents. An analysis of the Decision as a whole demonstrates that it did so. Had the Commission limited its consideration of the factors put before it by the participants in the proceedings to matters of cost only, that would have been an error of law, as demonstrated by Nakina, and a question of general importance as to the jurisdiction of the Commission. However, the discussion of the relevant factors in determining public convenience and necessity in chapter two and the consideration of socioeconomic and other non-financial factors in subsequent chapters, described below, demonstrates that there are no substantial questions to be argued that the Commission failed to consider any relevant factor. For these reasons, leave to appeal on this ground was not granted.

Chapter 3: BCTC Project Selection and Consultation Process

[30] In chapter three of the Decision, the Commission reviewed and criticized the public consultation process undertaken by BCTC, including the commitment made by BCTC to TRAHVOL that it would not recommend Option 1. The Commission found that the commitment had conveyed a wrong impression of the alternative routes available for VITR, with the result that the preferences of those most directly affected by the choice of routes were not fully developed. The Commission concluded (at 40-41), however, that:

Although a better consultation process may have provided more support for the Application and helped to focus the Commission’s process, the Commission Panel also concludes that the issues raised by stakeholders have been adequately explored in this proceeding in order for it to make a determination regarding BCTC’s CPCN Application.

[31] TRAHVOL raises the issue of the sufficiency of BCTC’s consultation with stakeholders in its claims that the Commission erred in failing to attach any weight to the promise made by BCTC not to recommend Option 1 (Appendix A, 9), and in failing to require and consider additional evidence on the non-financial considerations of Option 3 (Appendix A, 11). I will address these grounds of appeal in the context of that part of the Commission’s Decision which dealt with its reasons for approving Option 1 over Options 2 and 3.

[32] In chapter three, the Commission also discussed the necessity to consider socioeconomic and other non-financial considerations, including safety, reliability, health, aesthetic, recreation, habitat, First Nations and construction impacts. While the Commission agreed with BCTC that a detailed review of socioeconomic impacts was not necessary, because any project approved by the Commission was subject to a comprehensive environmental review, the Commission concluded (at 36) that “a high-level review of the relative socioeconomic impacts of project alternatives is still necessary for the Commission to determine whether a particular project is in the public interest.” It gave four reasons for such a review: to ensure that BCTC had considered other alternatives with similar costs but lower socioeconomic impacts or better non-financial performance; to allow the Commission to make determinations, in the overall public interest, among projects with similar costs but different non-financial and socioeconomic impacts; to be assured that the recommended alternative is likely to receive environmental approvals in a timely fashion and that expected compensation or mitigation costs would not render the alternative more costly than another viable alternative; and to consider modest increases to project costs to reduce socioeconomic impacts and provide other non-financial benefits that may reduce financial or schedule risks associated with the project.

[33] This discussion demonstrates the Commission’s consideration of factors other than cost-effectiveness in determining public convenience and necessity, contrary to the claims of Sea Breeze, TRAHVOL, and IRAHVOL (Appendix A, 1).

Chapter 5: Socioeconomic Impacts

[34] The fifth chapter of the Decision addressed socioeconomic impacts, including safety and health issues, the impact of transmission lines on property values, and environmental and archaeological impacts. TRAHVOL raises two grounds of appeal which focus on the Commission’s analysis and conclusion with respect to health concerns associated with EMF exposure from both the existing and proposed transmission lines: that the Commission erred in law by giving little weight to EMF concerns in determining Option 1 was in the public interest, while giving substantial weight to those concerns in rejecting Option 3 (Appendix A, 10); and that the Commission erred in law by failing to apply the precautionary principle or the principle of prudent avoidance in interpreting ss. 45 and 25 of the Act (Appendix A, 14). IRAHVOL raised one ground of appeal with respect to property values: that the Commission erred in concluding that VITR will have no significant incremental impact on average property values over the long term (Appendix A, 13).

EMFs

[35] The Commission’s analysis of the EMF health concerns noted that the conclusions of Health Canada and the International Commission on Non-Iodizing Radiation Protection (“ICNIRP”) (which develops safety guidance for the World Health Organization, the International Labour Organization and the European Union) were that “there is insufficient evidence to support the development of standards to address concerns about possible health effects from long-term exposure” (at 63).

[36] The Commission summarized its conclusions from previous decisions concerning health concerns from EMF exposure (at 63):

[The Commission] concluded that the scientific evidence regarding EMF effects is inconclusive and does not support the theory that power line EMF is a health hazard. In view of the lingering uncertainty and until science is able to provide more definitive evidence, the Commission has previously concluded that a strategy of prudent avoidance and low cost attenuation where possible is appropriate, and has expressed an intention to keep itself apprised of EMF research….

[37] The Commission considered (at 64-70) BCTC’s evidence concerning EMF levels and mitigation measures, the intervenors’ views about the possible health risks of EMF exposure, and the evidence of two experts, for TRAHVOL and BCTC. In its determination on this subject, it concluded (at 70):

…that the EMF exposure guidelines established by organizations such as the World Health Organization, ICNIRP, and Health Canada provide a relevant and useful reference point for considering the safety of EMF levels from the existing transmission lines and the proposed VITR.

[38] The Commission did not accept TRAHVOL’s submission that EMF levels in the homes and yards along the ROW were “uniquely high“ (at 70), and noted (at 71) “that the residents living along the ROW purchased their homes after the existing lines were installed and that the benefits of large lots and/or low prices were weighed against the presence of the transmission lines”.

[39] The Commission criticized TRAHVOL’s expert’s conclusions because she had not reviewed scientific literature published since 2000. The Commission concluded (at 71):

In the absence of convincing new evidence that indicates that change is warranted and/or imminent, the Commission Panel concludes that it should not impose lower EMF exposure standards on VITR.

[Bold in original.]

[40] The Commission discussed “the precautionary principle” and “prudent avoidance”. It found that these terms are open to a range of interpretations, and for that reason did not adopt them in its determinations. It concluded that the cost of additional mitigation measures to further reduce EMF exposure along the existing ROW was not justified by the evidence. It found (at 71):

Mitigation measures may reduce the level of concern and worry experienced by nearby residents. However, while this benefit is not insignificant, the Commission Panel concludes that it does not warrant actions beyond the very low cost measures that BCTC has included in its VITR design.

[Bold in original.]

[41] TRAHVOL claims that the Commission erred in failing to apply the “precautionary principle” or “the principle of prudent avoidance” in interpreting ss. 45 and 25 of the Act (Appendix A, 14). TRAHVOL points to evidence, not all of which was before the Commission, where the application of these principles has been recommended, and to other jurisdictions where these principles have been applied. Counsel referred to 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241 (“Spraytech”) at paras. 30-32, (quoted in Wier v. British Columbia (Environmental Appeal Board), 2003 BCSC 1441 at paras. 33-38), where L'Heureux-Dubé J., for the majority, noted that the precautionary principle has been accepted internationally and was relevant in the interpretation of domestic statutes. She cited the definition at para. 7 of the Bergen Ministerial Declaration on Sustainable Development (1990):

In order to achieve sustainable development, policies must be based on the precautionary principle. Environmental measures must anticipate, prevent and attack the causes of environmental degradation. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

[42] I do not interpret the comments of L'Heureux-Dubé J. in Spraytech as setting out a principle of statutory interpretation that applies to every determination by a tribunal or court concerning environmental matters or issues of public interest, and in particular to determinations by the Commission of public convenience and necessity. TRAHVOL’s ground of appeal does not, therefore, raise an issue of law. While the Commission declined to use the terms “precautionary principle”, it did refer to a “strategy of prudent avoidance” (at 63), and its analysis was consistent with these principles. It spoke of “convincing new evidence”, not scientific certainty, and weighed the costs of mitigation measures against the clearly identifiable benefits. For these reasons, leave to appeal on this ground was not granted.

Property Values

[43] The Commission considered the evidence concerning the effect of transmission lines on property values. Its conclusion (at 77) was:

The Commission Panel concludes that the evidence of the impacts of VITR on property values in Tsawwassen and the Gulf Islands supports a finding that the approved VITR will have no significant incremental impact on average property values over the long-term. If there are any short-term impacts, the Commission Panel concludes that they will decline over time and should be afforded little or no weight in this Decision.

[Bold in original.]

[44] IRAHVOL claims that the Commission erred in concluding that VITR will have no significant incremental impact on average property values over the long term (Appendix A, 13). The Commission considered the evidence and gave it the weight it determined appropriate in the context of the Decision. This ground of appeal raises no issue of law, and leave to appeal was not granted.

Chapter 6: VITR Route Options

Comparison of Options 1, 2 and 3

[45] In chapter six (at 88-94), the Commission discussed and compared the impacts of Options 1, 2 and 3.

[46] The comparison of the three options was coloured by the Commission’s criticisms of BCTC’s public consultation process, and the resulting lack of clear statements of preference from stakeholders, including TRAHVOL and Delta.

[47] TRAHVOL rejected both Options 1 and 2; its objective was the ultimate removal of the transmission lines from residential properties. The Commission concluded that in deciding between Options 1 and 2, it should give “considerable weight” to TRAHVOL’s lack of an expressed preference.

[48] Delta strongly opposed Option 3. The Commission accepted that Option 3 had “considerable merit”, and commented (at 92) that “if both Delta and TRAHVOL had preferred Option 3 to Option 1 or 2, further consideration of Option 3 would have been necessary, and additional evidence regarding Option 3 may have been available and valuable.”

[49] BCTC recommended Option 2, because it had committed to Tsawwassen residents that it would not recommend Option 1, and Delta would not cooperate with respect to Option 3. The Commission stated (at 92) that when BCTC did not get support for Option 2 from the intended beneficiaries (the Tsawwassen ROW residents), and considering the potential for delay and significantly increased costs of Option 2 over Option 1 (from acquisition of new ROW rights to put the transmission lines underground as opposed to replacing the existing lines), it should have recommended Option 1. For these reasons, in deciding the preferred route based on a consideration of the public interest, the Commission concluded that the commitment by BCTC not to recommend Option 1 should be given “no weight” (at 93).

[50] The Commission noted (at 92) that EMF and safety concerns would have been determinative if they were supported by the evidence, but since they were not, the Commission concluded that it should give considerable weight to two considerations: (1) the existing ROW, particularly where residents bought their properties with knowledge of the existing ROW, and (2) the limited incremental impacts associated with upgrading the existing transmission lines.

[51] The Commission concluded (at 94) that Options 1, 2 and 3 had a similar non-financial rating, but Option 1 was preferred to Options 2 and 3 because it was more cost-effective than either of the other two options.

[52] Four of TRAHVOL’s grounds of appeal address the Commission’s comparison of Options 1, 2 and 3 (Appendix A, 9, 8, 10, 11). TRAHVOL claims:

The Commission erred in law in failing to attach any weight to the promise made by the BCTC not to recommend Option 1.

The Commission erred in law in effectively giving the Corporation of Delta a “veto” over Option 3, but not extending that same right or privilege to Tsawwassen residents.

The Commission erred in law in giving little weight to EMF concerns in determining Option 1 was in the public convenience and necessity, while giving substantial weight to those concerns in rejecting Option 3.

The Commission erred in failing to require and consider additional evidence on the non-financial considerations of Option 3.

[53] All of these are questions of fact. It is within the jurisdiction of the Commission, and it is uniquely qualified, to determine the weight to be given to factors considered in the determination of public convenience and necessity, consistent with the principles set out in Memorial Gardens and Nakina.

[54] TRAHVOL’s claim that the Commission erred in failing to attach any weight to the promise made by BCTC not to recommend Option 1 does not raise any question of law. It is the Commission, not BCTC, which must determine what is in the public convenience and necessity in the circumstances of the application and evidence before it.

[55] It would be an error of law, as described in Nakina, if the Commission had failed to consider the implications of BCTC’s promise. The Decision sets out, however, the Commission’s consideration of those implications, and its reasons for determining that it should be given no weight in the circumstances. It found BCTC’s promise not to be in the public interest, as it was “a commitment to one stakeholder that is contrary to the interests of other stakeholders” (at 93).

[56] TRAHVOL argued that as a result of BCTC’s promise not to recommend Option 1, some of the residents who would have been affected by Option 1 may not have participated in the Commission’s deliberations. TRAHVOL claimed that the consultation process was thus undermined by the promise, and was not corrected, as the Commission found (at 40-41, see para. 30 of these reasons for judgment), by the issues raised during the hearing.

[57] The Commission recognized that the promise had affected the consultation process, and that clear expressions of preference for Options 2 or 3 would have been helpful in its consideration of those alternatives. The stated preferences of stakeholders were among many factors that the Commission took into account in choosing which of the routing options to approve. It is for the Commission to determine whether, on the evidence before it, it has the information it required to make a decision in the public interest. It is not a question of law for this Court.

[58] The Commission accurately described its duty, and set out its conclusion (at 93):

The Commission Panel concludes that it must decide the preferred route option based on a consideration of the public interest, and the BCTC commitment should be given no weight in that determination.

[59] TRAHVOL sought to introduce affidavit evidence on this application to support its claim that, had they been asked, Tsawwassen residents would have expressed a preference for Option 3. This evidence is not relevant to this leave application, but TRAHVOL may apply to the Commission, under s. 99 of the Act, to reconsider its Decision based on new evidence.

[60] A review of the Decision as a whole reveals that the claims that the Commission gave Delta a “veto” over Option 3, and gave more weight to EMF concerns in the context of Option 3 than Option 1, cannot be supported. Those claims are interpretations by TRAHVOL of certain of the Commission’s words which simply do not stand up to scrutiny.

[61] As already discussed, whether the Commission should have required additional evidence on Option 3 is not a question of law. TRAHVOL raises no issues of natural justice or procedural fairness. It is within the Commission’s discretion to determine, on a hearing, the scope of the consultation process, and whether any further evidence is required.

[62] For these reasons, leave was not granted to appeal on these four grounds raised by TRAHVOL.

ROW Agreements

[63] The Commission considered whether the ROW agreements provide BCTC with the right to build Option 1, which would give Option 1 an advantage over the other options. The Commission noted (at 105) that: “this issue is a contractual matter for the courts”, but continued: “However, the advantages provided by the ROW agreements regarding Option 1 are relevant to this decision.”

[64] BCTC argued that the issue of the scope of the ROW was dealt with by this Court in Hillside Farms Ltd. v. British Columbia Hydro and Power Authority, [1977] 3 W.W.R. 749 (B.C.C.A.). In Hillside, the Court determined that a ROW agreement granted in perpetuity did not restrict its use to structures and voltage in place or technologically possible when the agreement was entered into. The appeal from the trial decision, finding that there was no liability for breach of contract, was dismissed.

[65] TRAHVOL and other intervenors sought to distinguish Hillside on the ground, among others, that the language in the ROW in Hillside is different from that in the ROW agreements in Tsawwassen. In October 2005, in response to an information request by TRAHVOL, BCTC supplied copies of the ROW agreements for the properties in Tsawwassen. The grant in those agreements is similar to that considered by the Court in Hillside, except that the words “from time to time” do not appear in the Tsawwassen ROW agreements. The Commission quoted from both agreements and noted the different wording (at 105-106).

[66] The Commission concluded (at 106) that the “ROW agreements can reasonably be assumed to provide BCTC with the right to build Option 1”, accepting BCTC’s reply submissions that the rights were granted in perpetuity and were not limited to existing facilities.

[67] TRAHVOL and IRAHVOL claim that the Commission erred in holding that the existing ROW agreements permit the construction of new overhead transmission lines.

[68] The Commission considered this issue in its response, dated October 6, 2006, to a Reconsideration Application brought by Ms. Pamela D. Sutherland and others. It stated:

Similar submissions to those made by Sutherland et al and others in this reconsideration proceeding have previously been made and considered by the Commission, and do not now provide a prima facie case of error. Therefore, on this ground the reconsideration application is denied. Ultimately, this is a matter for the courts. If the Commission erred in concluding that it could assume the TSW ROW Agreements provide BCTC with the right to build Option 1, then this error would be material to the Decision.

[69] The Commission invited either BCTC or the applicants to file a further reconsideration application if the courts conclude that BCTC does not have the right to build Option 1 as is assumed in the VITR Decision.

[70] Whether the ROW agreements permit the replacement of the existing poles and lines with the larger, higher voltage poles required by VITR Option 1 is a question of law. The Commission has answered the question of significance and importance: it has determined that if it is wrong that the Tsawwassen ROW agreements do not allow BCTC to replace the existing overhead transmission lines with taller, higher voltage poles, that would be material to its decision to approve Option 1. It is not for me to be convinced of the merits of an appeal; it is sufficient, to grant leave, if there is some prospect of success – an arguable case. There is, in my opinion, an argument to be made. Given its importance to the Decision, there would be a clear benefit in having this question determined on a timely basis. The question of whether the ROW agreements permit the construction of new overhead transmission lines under Option 1 satisfies the criteria set out in Queens Plate, and leave to appeal was granted on that question.

Chapter 7: Comparison of VITR, VIC and JdF

[71] In chapter seven, the Commission compared the three proposals on criteria of project schedules and obstacles to completion, reliability, capital costs and other financial aspects, and other systems costs and benefits. In part 7.8 (160-171), the Commission discussed “Other Costs and Benefits of JdF”.

[72] Sea Breeze and IRAHVOL claim that the Commission erred in its assessment of wheeling costs (charges for transmitting power over another party’s transmission system) and system losses (Appendix A, 2), and failed to consider Sea Breeze’s evidence concerning the assessment of compensation for the use of the JdF Project (Appendix A, 3).

[73] These claims raise no questions of law, and cannot be supported on a review of the Decision as a whole. The Commission reviewed Sea Breeze’s evidence in detail, and concluded that the payments Sea Breeze could potentially receive from BCTC for the use of JdF would not satisfy Sea Breeze’s requirements to obtain financing. The uncertainties surrounding the calculation of the price Sea Breeze would have to charge for the use of JdF, and whether it would be able to obtain financing in the time required, affected the reliability of the proposal. All of these were findings of fact. Leave was not granted on these grounds of appeal.

[74] Sea Breeze claims that the Commission erred by failing to consider evidence related to trade benefits that would accrue to the Province as the result of the construction and operation of JdF and the resulting enhancement of electricity exports (Appendix A, 4). Sea Breeze argued that the Commission erred by imposing an evidential standard of proof of trade benefits higher than the normal standard of the balance of probability, and by accepting submissions made by counsel for B.C. Hydro as evidence. IRAHVOL also raises these two claims as grounds of appeal (Appendix A, 5, 6).

[75] Sea Breeze and IRAHVOL object to the Commission’s conclusions dismissing Sea Breeze’s claims that the JdF Project would result in trade benefits from the export by B.C. Hydro or its subsidiary, Powerex, of excess power from JdF. The Commission said (at 170):

With respect to the trade benefits of JdF, the Commission Panel accepts that in theory there may be incremental benefits to the province from increased trading activity by third parties. However, the Commission Panel finds no compelling evidence on the record regarding the likelihood or magnitude of these benefits. The Commission Panel share BC Hydro’s concerns that the purported beneficiaries of these benefits have not confirmed or corroborated such benefits. Nor was this evidenced in the response to the Open Season conducted by Sea Breeze. Even if these benefits could be demonstrated, the Commission Panel does not necessarily view incremental trade benefits to the province as a relevant consideration in the comparison of VITR and JdF, unless those benefits accrue directly to ratepayers (in terms of third party wheeling revenue) or competing projects are otherwise comparable in terms of costs to ratepayers. The Commission Panel accepts BC Hydro’s submission that neither it nor Powerex are forecasting any substantial trade benefits from increased transfer capabilities between Canada and the United States, and is not aware of any proposals by BC Hydro to increase the transfer capability of the BCTC system to the U.S. in order to facilitate additional arbitrage and trade. Neither does BC Hydro have a mandate or commitment for long-term firm exports beyond the optimization of existing hydroelectric storage capability.

[Italics added.]

[76] There is simply no basis for the claim that the Commission did not consider the evidence relating to trade benefits. It rejected the evidence as not proving that trade benefits would be available. This is not a question of law.

[77] I agree that the Commission’s use of the term “compelling evidence” and reference to confirmation and corroboration could imply a higher standard than the normal balance of probabilities, but in the context of the Commission’s consideration of Sea Breeze’s evidence of trade benefits, there is no substantial question to be argued that a higher standard was in fact imposed. The Commission may have used more categorical language than necessary to explain its reasons for rejecting Sea Breeze’s evidence, but that does not support the application for leave to appeal.

[78] Similarly, there is no substantial question raised with respect to the alleged acceptance of B.C. Hydro’s submissions as evidence. There was no evidence of potential trade benefits, other than that put forward by Sea Breeze. The reference to B.C. Hydro’s submissions was merely a confirmation of that.

[79] These grounds of appeal and arguments raise no issues of general importance. The Commission rejected the JdF Project because of issues of reliability and certainty. The rejection of the benefits that could be obtained from potential trade was one factor in its consideration. However, a review of all of the Decision on JdF makes it clear that the trade benefits were not material. An appeal on this ground would be of no clear benefit. Leave was not granted on this ground of appeal.

Neil Atchison

[80] Mr. Atchison’s submissions were directed to an additional alternative route option he has identified since the Commission’s Decision. He calls his proposal Option 5B. He claims that the Commission erred in failing to consider that option (Appendix A, 15).

[81] Mr. Atchison’s application for leave to appeal is misplaced. This Court has no role in considering an alternative proposal that has not been considered by the Commission. The Commission has the jurisdiction, under s. 99 of the Act, to reconsider a decision. That would appear to be a more appropriate proceeding for a review of Mr. Atchison’s Option 5B.

[82] Leave was not granted on Mr. Atchison’s ground of appeal.

Rate Impacts

[83] IRAHVOL and Mr. Atchison claim that the Commission erred in failing to consider the actual impact on rates in determining public convenience and necessity (Appendix A, 7).

[84] This claim is contrary to the Decision. The Commission expressly considered the rate impacts of each of VITR, VIC, and JdF in comparing the three projects (at 172-174).

[85] Leave was not granted on this ground of appeal.

Summary and Conclusions

[86] The four applicants raised a total of 21 grounds of appeal, condensed into 15 grounds for the purposes of analysis on these applications for leave.

[87] Leave was granted on one question: whether the existing right of way agreements permit the construction of new overhead transmission lines under Option 1.

[88] Leave was denied on all other grounds.

“The Honourable Madam Justice Levine”

APPENDIX A

CONDENSED GROUNDS OF APPEAL

Consideration of Non-Financial Factors

1. The Commission erred in holding that public convenience and necessity in section 45 of the Act is to be determined by the most cost-effective option rather than what is in the public interest.

SEABREEZE (d); TRAHVOL (b); IRAHVOL (d)

Wheeling Costs

2. The Commission erred in arriving at an insupportable assessment of wheeling costs and system losses associated with JdF. This assessment was based on a misunderstanding and misconstruction of the evidence, thereby amounting to a palpable and overriding error.

SEABREEZE (a); IRAHVOL (c)

3. The Commission erred by failing to consider Sea Breeze’s evidence concerning the assessment of compensation for the use of JdF.

SEABREEZE (b)

Assessment of Benefits

4. The Commission erred by failing to consider evidence related to the benefits that would accrue to the Province, ratepayers and the BCTC as a result of the construction and operation of JdF and the resulting enhancement of electricity exports.

SEABREEZE (c)

5. The Commission erred in holding that the incremental benefits to the province from increased trading activity using JdF are a matter of compelling evidence on the record and that these benefits have not been confirmed or corroborated by the purported beneficiaries.

SEABREEZE (argument re: (c)); IRAHVOL (a)

6. The Commission erred in accepting BC Hydro’s submission that neither it, nor Powerex are forecasting any substantial benefits from the increased transmission transfer capabilities between Canada and the United States.

SEABREEZE (argument re (c)); IRAHVOL (b)

Rate Calculation

7. The Commission erred in failing to consider the actual impact on rates in determining public convenience and necessity under s. 45 of the Act.

IRAHVOL (e); ATCHISON (b)

Routing of Transmission Lines through Tsawwassen

8. The Commission erred in law in effectively giving the Corporation of Delta a “veto” over Option 3, but not extending that same right or privilege to Tsawwassen residents.

TRAHVOL (c)

9. The Commission erred in law in failing to attach any weight to the promise made by the BCTC not to recommend Option 1.

TRAHVOL (supplementary memorandum of argument)

10. The Commission erred in law in giving little weight to EMF concerns in determining Option 1 was in the public convenience and necessity, while giving substantial weight to those concerns in rejecting Option 3.

TRAHVOL (d)

11. The Commission erred in failing to require and consider additional evidence on the non-financial considerations of Option 3.

TRAHVOL (a)

12. The Commission erred in holding that the existing right of way (“ROW”) agreements permit the construction of new overhead transmission lines.

TRAHVOL (e); IRAHVOL (g)

Routing over Gulf Islands

13. The Commission erred in concluding that VITR will have no significant incremental impact on average property values over the long-term.

IRAHVOL (f)

Precautionary Principle

14. The Commission erred in law by failing to apply the precautionary principle or the principle of prudent avoidance in interpreting sections 45 and 25 of the Act.

TRAHVOL (f)

Alternative Routing – Option 5B

15. The Commission erred in failing to consider an alternative routing for overhead transmission lines, referred to as Option 5B.

ATCHISON (a)

Note: The letter in brackets indicates the identification of the ground of appeal in the applicant’s written memorandum of argument on the application for leave to appeal.

Citation:	*Tsawwassen Residents Against Higher Voltage Overhead Lines Society v. B.C. Utilities Commission,*
	2006 BCCA 537