National Energy Board Ministerial Briefing Binder – NEB & Cost Recovery

FOR INFORMATION

Security: Protected B
Date: 4 November 2015

• The NEB receives its annual appropriations from Parliament through the Main Estimates process. This includes baseline funding as well as temporary funding for specific purposes (e.g., sunsetters).
• The NEB then recovers most of its appropriations from NEB-regulated companies, on behalf of government.
• Cost recovered funds are deposited directly into government’s Consolidated Revenue Fund.
• The NEB Act provides that the NEB may, subject to Treasury Board approval, make regulations for recovering the costs related to its work from companies it regulates under the NEB Act.
• Currently, the NEB recovers approximately 95 per cent of the appropriations that it receives from Parliament from companies regulated under the NEB Act.
• The NEB does not currently recover costs related to its work under the Canada Oil and Gas Operations Act (COGOA) and the Canadian Petroleum Resources Act (CPRA). The Energy, Safety and Security Act, which comes into force 26 February 2016, will allow regulations to be made for the NEB to recover these costs.
• s.21(1)(a) s.21(1)(b)
• The National Energy Board Cost Recovery Regulations (Cost Recovery Regulations) set out how the NEB can recover costs from companies regulated under the NEB Act.
• The Cost Recovery Regulations divide companies regulated under the NEB Act into large, medium and small categories. Large companies are those who have an annual cost of service (annual cost of providing the facilities to transport hydrocarbons) of $1 million.
• The Cost Recovery Regulations provide for the following types of cost recovery:
  • Proportional levies for large companies calculated using a formula based on:
    • the amount of annual company throughput by commodity (oil, gas, electricity); and
    • the amount of time NEB staff spend working in a commodity area.
  • Fixed administrative levies for small and medium companies, as well as commodity pipelines (e.g., water, steam, and CO₂); and
  • A percentage levy (0.2% of estimated construction costs) for companies not previously regulated under the NEB Act.
• s.21(1)(a) s.21(1)(b)

Figure 1: NEB Appropriation

Date modified:

2021-06-11