ARCHIVED – National Energy Board – 2015–16 Departmental Performance Report – Section III: Analysis of Programs and Internal Services

Section III: Analysis of Programs and Internal Services

Programs

1.1 Energy Regulation

Description

This program provides the regulatory framework under which the NEB carries out its mandate and achieves part of its strategic outcome. Specifically, it enables Canadian federally regulated energy infrastructure to be developed and supervised throughout its lifecycle. The regulatory framework includes components such as setting expectations for industry and others, monitoring and enforcing compliance with requirements, measuring performance of the NEB’s regulatory framework and focusing on continual improvement. The authority for this program is derived from the NEB Act, COGOA, CPRA, the Canada Labour Code and other associated regulations and guidelines. Energy regulation provides Canadians with safe, reliable and efficient energy supply.

Program Performance Analysis and Lessons Learned

The NEB has continued advancing improvements in 2015–16 and has completed additional activities to support performance against organizational priorities and expected outcomes.

Highlights of the past year’s work include:

• The Energy Safety and Security Act (ESSA) came into force in February 2016. This Act strengthens the NEB’s ability to regulate activities in the North and Canadian Arctic. The ESSA also amends the Canada Oil and Gas Operations Act, and introduced a number of new tools for regulating Northern oil and gas activities in the NEB’s jurisdiction. For example, the NEB now has the authority to establish an administrative monetary penalty (AMP) regime under COGOA and the ability to provide participant funding for certain projects under COGOA. The Act also introduces a new financial responsibility requirement on companies for liability purposes.
• The Pipeline Safety Act received royal assent in June 2015, and as a result the NEB worked diligently to prepare for its coming into force in June 2016. The most significant changes to the NEB Act relate to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, as well as audit and enforcement powers. Some of the specific changes result from the new legislation include:
  • NEB-regulated companies operating pipelines that have the capacity to transport at least 250,000 barrels per day of oil will be liable for all costs and damages for an unintended release, up to $1 billion, regardless of fault. The remaining pipeline companies under NEB jurisdiction wilf facilities, ground disturbance activities or vehicle or mobile equipment crossings in the area of an NEB-regulated pipeline, as well as the obligations of pipeline companies.
  • New regulations for damage prevention were made, which lay out the obligations of those planning construction of facilities, ground disturbance activities or vehicle or mobile equipment crossings in the area of an NEB-regulated pipeline, as well as the obligations of pipeline companies.
  • The NEB’s jurisdiction has been expanded to provide oversight of pipelines post-abandonment. Companies will remain liable for post-abandonment costs and damages. It also provides the NEB with new powers for Inspection Officers, and new authority to assume control of an abandonment or abandoned pipeline if a company is not complying with a Board order.
  • The Governor in Council was provided the authority, in the event of a pipeline release, to “designate” a company if it either does not have the ability to pay for the release, or does not comply with a Board order, and for the NEB to take over spill response.
• In June 2015, the NEB updated six sections of the Filing Manual^{Footnote 11} to provide more guidance on information requirements to regulated companies when preparing their project applications. The NEB’s Filing Manual assists applicants in understanding the NEB’s expectations about information that should be included in an application under the National Energy Board Act.
• The NEB introduced innovation in hearings such as video broadcasting services for hearings and proceedings for Trans Mountain Expansion proceedings and other hearings in 2015–16. There were more community outreach activities, town hall sessions and enhanced consultation as part of the NEB process in adjudicating applications.

• The NEB’s commitment to robust regulatory practices and transparency was reflected in the launch of the online NEB condition compliance table^{Footnote 13} in 2015–16. That work was done in response to the Board’s review of the audit entitled Oversight of Federally Regulated Pipelines^{Footnote 14}, by the Commissioner of the Environment and Sustainable Development. The NEB has also aggressively moved forward to centralize a number of risk assessment activities and to pursue new ways to meet key staffing challenges. These moves were part of a renewed commitment by NEB leadership to transform the organization through clear principles of governance, strong operating practices and accountabilities for every component of the National Energy Board.
• The NEB has fully implemented the five recommendations from the CESD’s 2014 Audit on Implementation of the Canadian Environmental Assessment Act, 2012^{Footnote 15} according to the management action plan.
• The NEB continued to pursue a commitment of openness and transparency and in spring 2015, consulted with the public regarding company pipeline emergency response plans and obtained their views on the level of detail that would be useful to them. Pipeline companies were also consulted in order to determine how they could share their plans. As a result, in early April 2016, the NEB ordered companies to publish the majority of their emergency procedures manuals to their internet sites for public viewing by fall 2016^{Footnote 16}. This will give the public access to emergency response information that may be relevant and important to them.
• Compliance and enforcement information has been available on the NEB’s website since 2011 and each year the NEB continues to make more information available. For example, this past year, the NEB started posting its evaluations of emergency response exercises carried out by companies at specific locations. Through these evaluations, the NEB verifies that companies are prepared to respond in case of an emergency. The NEB also worked on a new system, process and tools in order to make inspection reports available on its website. Easy access to these reports is unique among regulators and helps the public to understand how the NEB takes action on safety.
• The Participant Funding Program (PFP) at the NEB has been in place for five years to facilitate public participation in adjudication of energy projects. The PFP had its first evaluation^{Footnote 17} which confirmed that there is continuing need for it to support participation in NEB processes and it aligns with the responsibilities and priorities of the government and the NEB. Improvements to the design and delivery of PFP were made in response to the recommendations of the evaluation.

Budgetary Financial Resources (dollars)

2015–16 Main Estimates	2015–16 Planned Spending	2015–16 Total Authorities Available for Use	2015–16 Actual Spending (authorities used)	2015–16 Difference (actual minus planned)
49,588,459	52,632,974	62,723,358	43,185,092	(9,447,882)

Human Resources (Full-Time Equivalents [FTEs])

2015–16 Planned	2015–16 Actual	2015–16 Difference (actual minus planned)
334.8	251.5	(83.3)

Performance Results

Expected Results	Performance Indicators	Targets	Actual Results
Regulated activities are conducted in accordance with regulatory requirements	Number of inspections conducted per fiscal year	150	177
	Per cent of planned compliance activities that are completed	100%	100%
	Number of audits conducted per fiscal year	6	5

The outstanding audit commenced and the release of the finalized report was delayed in order for all technical aspects of the particular audited program to be evaluated.

1.2 Energy Information

Description

Under this program, the supply, demand, production, development, transmission and trade of energy are analyzed to ensure the requirements of Canadians are appropriately met. Advice is provided on energy issues of interest. The Board uses energy information to inform its regulatory decisions and to produce publicly available assessments of energy trends, events and issues that may affect Canadian energy markets and the supply and demand for energy.

Program Performance Analysis and Lessons Learned

In 2015–16, the Board continued to focus on providing Canadians with clear and accessible energy information by monitoring energy markets, gathering and analyzing data, and publishing energy information products. The NEB has made its publications fully accessible on its website and more visually interesting through the increased use of infographics. The Board is also increasingly publishing the data it uses in many of its reports.

In an effort to widen its audience and more effectively deliver information, the Board has embraced the use of social media to announce and disseminate its energy information products (e.g. the tweeting of key graphics and charts). Most notably, the NEB launched ground-breaking data visualizations related to its Energy Futures report (see below). These have been widely showcased across government, and since their publication on the NEB’s website, have provided Canadians with an innovative vehicle for understanding and conceptualizing Canada’s energy landscape.

• These publications include:
  • Canada’s Energy Future 2016: Energy Supply and Demand Projection to 2040 (Energy Futures): A long-term outlook (with summarized key findings) that covers all energy commodities across all provinces and territories. This report is based on input and data from energy experts across government, industry, academia and environmental organizations as well as energy market expertise from within the NEB. A supplemental report, “Canada’s Energy Future 2016: Province and Territory Outlooks”, was released in May 2016. An update to the main report is underway and will be released in fall 2016.
  • Energy Futures Supplement: Demand Sensitivities: Released in April 2015, this companion publication to the 2013 version of Energy Futures provides further information on long-term Canadian energy use in several sector-specific areas.
  • The Unconventional Gas Resources of Mississippian-Devonian Shales in the Liard Basin of British Columbia, the Northwest Territories, and Yukon (Energy Briefing Note): This report presents the joint assessment by the NEB and several provincial and federal departments of an area that straddles several Canadian jurisdictions. The study examines detailed information about the area and its potential as a gas resource.
  • Short-term Canadian Natural Gas Deliverability 2015–2017 (Energy Market Assessment): This report examines the factors that affect natural gas supply in Canada and presents an outlook for deliverability.
  • Canadian Energy Dynamics: Highlights of 2015 (Energy Market Analysis): This is an annual, easy-to-read retrospective of energy market highlights.
  • Canadian Energy Overview 2014 (Energy Briefing Note): This provides basic annual data on Canadian energy supply and markets.
• The NEB also published 47 Markets Snapshots on emerging trends in various segments of the energy market, including oil, natural gas, natural gas liquids, and electricity (including renewables).
• The NEB has increased availability of pipeline and safety information with a focus on mapping. For example, the NEB collaborated with the United States and Mexico to develop a North American Energy Infrastructure Map. The NEB also launched an Interactive Pipeline Incident Map in April 2015 on its website. This plots incident data (related to the Onshore Pipeline Regulations) from 2008 to the present on an interactive map of Canada. The data on the map is regularly updated and can be downloaded. This achievement reflects the NEB’s commitment to transparency and providing accessible data on the safety and performance of pipelines. It also supports the government’s open data and web renewal initiatives.

Budgetary Financial Resources (dollars)

2015–16 Main Estimates	2015–16 Planned Spending	2015–16 Total Authorities Available for Use	2015–16 Actual Spending (authorities used)	2015–16 Difference (actual minus planned)
5,982,273	5,620,814	8,475,092	9,018,344	3,397,530

Human Resources (Full-Time Equivalents [FTEs])

2015–16 Planned	2015–16 Actual	2015–16 Difference (actual minus planned)
42.9	48.1	5.2

Performance Results

Expected Results	Performance Indicators	Targets	Actual Results
Canadians access energy related analysis and information	Number of visits to the Energy Information webpage or material per fiscal year	≥ 500,000	544,244

Internal Services

Description

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Program Performance Analysis and Lessons Learned

In support of organizational priorities and NEB programs, Internal Services planned activities were carried out, several of which are government-wide led initiatives. The NEB will leverage previous work to improve the program alignment architecture in creating a new Departmental Results Framework. This new approach will not only allow us to report more effectively to Canadians on what they want to know about the National Energy Board, it will also allow us to transform and modernize as the Framework will provide clear lines of sight and more robust accountabilities for NEB staff and leadership.

• As part of government-wide Human Resource and Financial modernization, the NEB achieved a major milestone by successfully on-boarding on to the new the Human Resource information technology application, My GCHR, effective March 2016, and Phoenix, the pay system, effective April 2016. To on-board successfully, the NEB engaged in data cleansing, new business processes development, staff training, and identifying and managing risks, which, with Phoenix, were considerable.
• The NEB advanced work in being compliant with the Government’s Directive on Open Government and achieved a major milestone by finalizing the Implementation Plan for 2015–16. The activities that have taken place at the NEB include broad internal engagement to identify and develop a data set inventory. Some data sets may be eligible for release on the data portal (open.canada.ca) by October 2016. This will support the Government’s plan to increase transparency and accountability to Canadians and increase citizen engagement and open dialogue.
• The NEB has continued its work on web-renewal – another government-wide initiative to consolidate all government websites into a single point of entry at Canada.ca, where the NEB belongs to the Environment and Natural Resource theme; the NEB is also addressing its priority of “Engaging with Canadians” and providing access to information about the NEB. In the meantime, the NEB also made further improvements to its current external website by introducing a new layout, with the intent to make it easier for the public to search and retrieve information.
• The NEB initiated specific steps to comply with the Government’s Directive on Recordkeeping in order to improve record keeping practices and systems including creating an inventory of records with business value, raising awareness about information management, and providing training. Work continues on this initiative as planned, for full implementation in 2018.
• The government’s horizontal audit on Information Technology Security (February 2016) contained recommendations that the NEB has been working to implement. Some relate to updating policies, incident management plans and processes. The activities involved to address the recommendations will require until the end of 2017 to fully implement.
• As the Centre 10 building is both the NEB headquarters as well as a location of regulatory hearings, steps were taken to enhance physical security for staff and guests.
• Steps were taken to make internal improvements to the cost recovery process, deadlines for invoicing companies were met and there was increased interaction with regulated companies to provide updated information and respond to inquiries.

Budgetary Financial Resources (dollars)

2015–16 Main Estimates	2015–16 Planned Spending	2015–16 Total Authorities Available for Use	2015–16 Actual Spending (authorities used)	2015–16 Difference (actual minus planned)
21,249,778	19,296,723	25,238,978	30,193,132	10,896,409

Human Resources (Full-Time Equivalents [FTEs])

2015–16 Planned	2015–16 Actual	2015–16 Difference (actual minus planned)
93.5	157.9	64.4

Staff from Legal Services and Communications Business Unit were part of planned FTEs in the Energy Regulation Program for the 2015–16 RPP; however these FTEs were moved into Internal Services and thus account for the variance between actual and planned FTEs.