Thank you. We will also deal with Committee Report 11-12(3). We Will take a short break.

--- SHORT BREAK

I would like to call the committee back to order. Bill 16, Norman Wells Natural Gas Distribution System Act. Mr. Morin, do you have any opening remarks?

Introductory Remarks

Thank you, Mr. Chairman. We have a unique situation in Norman Wells where the only natural gas system in the NWT is also part of the municipal water and sewer utilidor. For several years the Departments of Municipal and Community Affairs, Government Services and Public Works have been working with the town to transfer the water and sewer system and the natural gas system. Although the town has already assumed full responsibility for the water and sewer services, a normal municipal function, the new legislation is required before we can proceed with the transfer of the gas system. The water and sewer system and the gas...

Mr. Chairman, my apologies, my microphone turns on when Mr. Morin's turns on.

--- Laughter

Thank you, Mr. Chairman. The new legislation is required before we can proceed with the transfer of the gas system. The water and sewer system and the gas system share a common utilidor structure, therefore, in order for the town to assume full responsibility and ownership of the infrastructure and lands, a transfer of both systems is necessary. I am confident the town is ready, willing and able to take on these additional responsibilities, and in the spirit of the government's community transfer initiative, I give the transfer my full support. Thank you, Mr. Chairman.

Thank you. Does the Chairman of the Standing Committee on Legislation have any comments? Mr. Arngna'naaq.

Comments By Standing Committee On Legislation

Thank you, Mr. Chairman. The Standing Committee on Legislation reviewed Bill 16, Norman Wells Natural Gas Distribution System Act at its public meeting in Norman Wells on January 12, 1993, and at its public meetings in Yellowknife on January 22 and February 16, 1993. The committee would like to thank the Minister of Government

Services and Public Works, the Honourable Don Morin, and his officials from the Department of Government Services and Public Works, and the Department of Justice for presenting this bill and responding to committee Members' questions and concerns.

The committee also received witness presentations from the representatives of the Public Utilities Board and of the town of Norman Wells. Bill 16 would authorize the town of Norman Wells to make by-ton for the purchase and operation of the system that delivers natural gas to Norman Wells consumers. This is the only natural gas system in the Northwest Territories. At present the natural gas distribution system is owned by the Government of the Northwest Territories. However, natural gas is delivered to Norman Wells consumers through the utilidor system which the town uses to provide water and sewer services under the Cities, Towns and Villages Act.

The town has also already been carrying out a significant portion of the administration of the natural gas distribution system through a service contract with the department. The Public Utilities Act, which gives the Public Utilities Board jurisdiction to oversee the activities of public utilities and to approve or set just and reasonable rates for public utilities, would apply to the natural gas distribution system if this bill is passed.

As a result of evidence provided during public hearings in Yellowknife by the Public Utilities Board, the Standing Committee on Legislation focused on two significant issues in its review. This resulted in the identification and resolution of two problems with the bill at the committee stage. As a result, amendments have been made to the bill at the committee stage under our new legislative process.

The original bill contained a clause which would have authorized the town of Norman Wells to make by-laws to enter into agreements with the Government of the Northwest Territories setting standards and conditions for the management and operation of the natural gas distribution system. The committee was concerned that the standards and conditions of such an agreement might become too limiting in changing economic circumstances and might interfere with normal utility practice. As well, there was a potential for conflict if such an agreement contained terms which were not consistent with the regulatory requirements of the Public Utilities Board under the Public Utilities Act.

The committee also questioned the Minister about another issue raised by the Public Utilities Board. The committee was concerned that the bill did not contain a provision which would specifically require the town to provide the Public Utilities Board with the information necessary for the board to determine an appropriate rate base for the natural gas distribution system upon the town's purchase of the system. At its meeting on February 16, 1993, the committee invoked the procedure available under the new legislative process and carried a motion to amend Bill 16 to delete the sub-clause authorizing the town to make by-laws for the making of agreements with the Government of the Northwest Territories, which would set standards and conditions for the operation and maintenance of the natural gas distribution system. A second amendment was passed to add a sub-clause requiring the town to provide to the Public Utilities Board all information

necessary for the board to determine an appropriate rate base for the utility.

Thank you. Does the Minister wish to invite his witnesses into the committee? Mr. Morin.

Thank you, Mr. Chairman. Yes, I would like to invite in Les Clegg, acting deputy minister, Merv Homenuik, director of petroleum products and Diane Buckland, legislative counsel.

Thank you. Is the committee agreed?

Agreed.

--Agreed

Please proceed. For the record, Mr. Minister, would you please introduce the witnesses?

Thank you, Mr. Chairman. Mr. Les Clegg. the acting deputy minister, Merv Homenuik, director of petroleum products, and Diane Buckland, legislative counsel.

Are there any general comments? Mr. Whitford.

General Comments

Thank you. Mr. Minister.

Thank you, Mr. Chairman. The transfer of this legislation has been common knowledge in and around the community of Norman Wells for some time now. The Standing Committee on Legislation had a public meeting in Norman Wells and no one expressed any interest at that time. No one has expressed interest at all other than the community. Thank you.

Thank you. Mr. Whitford.

Thank you. Mr. Minister.

Thank you, Mr. Chairman. My understanding is that this has been an ongoing issue since 1988 and no one has expressed any interest to date. It is a request from the community to take it over. It is a unique situation because it is a utilidor with water and sewer and it happens to have a gas line in it. In order for the community to have full responsibility for that utilidor they have to take over the gas fine as well. Thank you.

Thank you. Mr. Whitford.