Technical Owners and the Public Utilities Board


  • E. J. McCoy



Energy Law, Petroleum Law


Companies in the business of oil and gas exploration and development would not, in common parlance, be referred to as "public utilities ". Nonetheless, many enterprises in volved in such undertakings find themselves increasingly regulated by the Public Utilities Board. They are known in the industry as "technical owners" because they are caught by the statutory definitions of "owner of a public utility". In this paper, the author traces the history of the legislation culminating in our present Public Utilities Board Act and Gas Utilities Act Particular attention is paid to the political and economic events which underlie the evolution of those provisions which define and regulate technical owners. Under the topic of jurisdiction, the author addresses the question of legislative authority and the extent to which the definitions of "gas utility" and "public utility" ap ply to facilities and activities of technical owners. The author concludes that, while there may be some specific instances in which the statutes could not govern, they are capable of very wide application. The extent of jurisdiction is discussed with particular reference to the Board's power of control over securities, dispositions, encumbrances and mergers. This power is necessary for rate regulation since control of utility rates would be ineffective if utilities were unfettered in their financial dealings. Failure to obtain Board approval for such transactions can render the transaction unenforceable, although the courts have frequently avoided such harsh consequences in their interpretation of statutory limitations of contracts. The statutes recognize that in some instances utility owners ought to be exempted from statutory regulation by providing for both "statutory exemptions" and "declaratory exemptions". Statutory exemptions are quite limited and apply only to specific forms of transaction. Declaratory exemptions, on the other hand, may exempt an owner from all the regulatory provision of t