ARCHIVED – Cost Recovery – Questions and Answers

The National Energy Board Cost Recovery Regulations (Regulations) and an order of the CER respecting costs incurred in frontier areas define what costs are to be recovered. Generally, these include CER operating costs, the cost of services provided to the CER and paid for by other government departments but, exclude costs incurred by the CER in connection with activities in frontier areas. Frontier activities relate to work undertaken by the CER under the authority of the Canada Oil and Gas Operations Act and the Canada Petroleum Resources Act. Occasionally, the CER provides services to other governments or agencies under agreements with those entities. The cost of providing those services is not included in recoverable costs.

The Regulations set out the manner in which cost recovery levies are determined and invoiced to cost recovered entities.

The Regulations may be accessed online at:

National Energy Board Cost Recovery Regulations (SOR/91-7)

In summary:

From June to August of each year, the CER gathers information required to determine estimated recoverable costs and the estimated amount of levies to be charged to companies regulated by the CER.

During September of each year, all calculations required to estimate cost recovery levies for the upcoming year are carried out. Also, calculations required to determine the actual charge for the previous year are carried out.

By September 30 of each year, letters of notification are issued to large companies advising them of the amount of their bill payable for the coming year. The amount of the bill is the sum of the estimated levy for the coming year and the difference between the estimated and actual levy for the previous year. At the same time, large oil and gas pipeline companies are also invited to apply for relief from full payment of cost recovery levies providing they are eligible under the provisions of section 4.1 of the Regulations.

During October and November of each year, applications for relief from large oil and gas pipeline companies are received, reviewed and approved (if eligible). If relief is granted to any company, estimated cost recovery levies for large companies are re-calculated in accordance with the provisions of section 14.1 of the Regulations.

By end of December of each year, large oil and gas pipeline companies who have applied for relief will be notified of the CER’s decision on their application. All large oil and gas pipeline companies are notified of their revised estimated cost recovery levies resulting from relief granted to eligible companies.

The CER offers two options for submitting information in connection with the annual RFI.

1. The response may be e-mailed to a CER mailbox established for this purpose:
   CRdatasubmit@cer-rec.gc.ca
   
   Data may be handwritten on the template provided in the RFI letter and returned as a PDF attachment or an Excel worksheet may be created and attached to the above mentioned e-mail. Be sure to identify your company name on any e-mail submissions and attachments.
   
   Note: The CER's e-file facility should not be used for submitting cost recovery data.
2. The response may be mailed using regular postal service to:
   
   Canada Energy Regulator
   210-517 10 Ave SW
   Calgary AB  T2R 0A8
   Attention: Cost Recovery Analyst

Section 87 of the Canadian Energy Regulator Act (Act) authorizes the CER to make regulations for the purpose of recovering all or a portion of any costs that the Regulator (CER) considers to be attributable to the carrying out of its mandate, including costs related to applications that are denied or withdrawn. Generally speaking, that means cost recovery may apply to CER-regulated pipeline companies, power line companies, off-shore renewable companies and those companies who apply to the CER for approval of projects (irrespective of whether those applications are denied or withdrawn). Under the Act, companies who conduct activities over which the CER has responsibilities under the Canada Oil and Gas Operations Act and Canada Petroleum Resources Act could also be included in the Act’s cost recovery framework.

Today, cost recovery is still governed by the National Energy Board Cost Recovery Regulations (Cost Recovery Regulations) and these are in force until they are amended. Subsections 4(1 through 4(4)and 5.1(1) to 5.1(2) of those regulations provide that large oil, gas and commodity pipeline companies, large international and interprovincial power line companies, intermediate oil, gas and commodity pipeline companies, small oil, gas and commodity pipeline companies and small international and interprovincial power line companies holding authorizations under the Act, shall pay cost recovery charges as provided in the Cost Recovery Regulations. The regulations go on to describe the manner in which cost recovery levies will be determined for each of these entities.

After cost recovery levies have been determined, companies will be invoiced for their levies during the year to which the levy applies.

Companies classified as large companies by the Regulations, will be invoiced at the end of each calendar quarter. Each invoice will be for one quarter of the annual estimated amount of their billing.

Companies classified as small or intermediate by the Regulations, will be invoiced on or before June 30 for the entire year.

The CER does not hold any bank accounts of its own but is responsible for the collection and management of all accounts pertaining to cost recovery. All remittances must be made payable to the Receiver General for Canada but forwarded to the CER.

All payments must be payable to the Receiver General for Canada and sent to:

Canada Energy Regulator
210-517 10 Ave SW
Calgary AB  T2R 0A8

The Receiver General for Canada has also established a service for payment of accounts by wire transfer. If you wish to make use of this service, please contact our Cost Recovery Analyst by e-mail at Cost.Recovery@cer-rec.gc.ca to receive detailed instructions for the use of this facility.