Decision No. 351-R-2004

June 29, 2004

File No. R 8050/863-000.84A

APPLICATION

[1] On July 25, 2003, British Columbia Hydro and Power Authority (hereinafter BC Hydro) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

[2] The application indicated that notwithstanding the issues before the Agency, the parties had agreed upon a one-day construction window of September 1, 2003, and asked that the application be considered on an urgent basis. By Decision No. LET-R-161-2003 dated July 29, 2003, the Agency, pursuant to section 8 of the National Transportation Agency General Rules, SOR/88-23, abridged the timelines for the filing of an answer and reply.

[3] In its letter dated August 1, 2003, BC Hydro advised of its intention to engage in the mediation process offered by the Agency with respect to the terms and conditions regarding the utility crossing, but not with respect to the construction project itself.

[4] On August 8, 2003, Burlington Northern and Santa Fe Railway Company (hereinafter BNSF), in view of the time and construction constraints relating to the project, agreed to allow BC Hydro to construct the utility crossing, with the proviso that the parties continue to negotiate the remaining terms and conditions. At that time, the parties were negotiating a utility crossing agreement respecting the terms and conditions and BNSF indicated that if no agreement were reached by the end of August 2003, the parties could take advantage of the Agency's mediation service. If the mediation process did not produce a resolution by the end of September 2003, the Agency would then rule on the outstanding terms and conditions relating to the utility crossing.

[5] On August 12, 2003, BC Hydro requested that the Agency hold the application in abeyance as an interim agreement had been reached with BNSF formally allowing the construction of the utility crossing. BC Hydro advised that negotiations towards a final agreement would be undertaken according to the timelines set out in the BNSF letter of August 8, 2003. In the event that BC Hydro and BNSF were unable to come to a final agreement that would supercede the interim arrangement, BC Hydro would then pursue its application under which the Agency would rule on the terms and conditions relating to the utility crossing.

[6] By Decision No. LET-R-171-2003 dated August 18, 2003, the Agency granted the stay of proceedings requested by BC Hydro until September 30, 2003, in light of the interim agreement in place between the parties. This date incorporated the parties' agreed upon deadlines of August 31, 2003 for a resolution of the outstanding matters by negotiation and September 30, 2003 for resolution, if necessary, of the outstanding matters by mediation.

[7] On September 10, 2003, BC Hydro advised the Agency that the parties had agreed to an extension of time from August 31 to September 15, 2003 for the negotiation of the proposed utility crossing agreement.

[8] On September 25, 2003, BC Hydro requested the Agency's assistance in mediating the remaining issues, and requested that the Agency's stay granted on August 18, 2003 be extended until October 31, 2003. On October 7, 2003, BNSF concurred with BC Hydro's request for a further extension of the stay and on October 10, 2003, the Agency issued Decision No. LET-R-206-2003, extending the stay until October 31, 2003, to resolve the disputed issues by mediation.

[9] In a letter dated February 11, 2004, BC Hydro advised the Agency that it had withdrawn from mediation without a settlement being reached and that it wished to proceed with its application for the relief sought, pursuant to section 101 of the Canada Transportation Act (hereinafter the CTA). In a subsequent letter dated February 19, 2004, BC Hydro submitted a draft agreement containing the terms and conditions that the parties were negotiating.

[10] Given the change in circumstances and the reduced scope of the application from the time of the original filing, the Agency, by Decision No. LET-R-64-2004 dated February 27, 2004, requested that both parties file, if applicable, new submissions.

[11] On March 12, 2004, BC Hydro filed a new submission and on March 19, 2004, BNSF requested an extension until March 26, 2004 for the filing of its response to the new submission. BC Hydro consented to the extension request on March 19, 2004 and by Decision No. LET-R-82-2004 dated March 22, 2004, the Agency granted it. The Agency provided BC Hydro until April 2, 2004 to file any reply.

[12] On March 26, 2004, BNSF's answer was received. In the conclusion of its answer, BNSF submitted a list of eight terms/conditions and stated that authorization would be granted if those terms were met. In its reply received on April 2, 2004, BC Hydro agreed to five of those terms and submitted counter offers on the remaining three.

[13] Pursuant to subsection 29(1) of the CTA, the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an extension of the deadline until June 30, 2004.

ISSUES

[14] The issues to be addressed by the Agency are threefold concerning the outstanding terms and conditions relating to the proposed utility crossing agreement: inclusion of the two-metre buffer zone required by BC Hydro; entitlement of the parties to supervise and/or inspect the other's works; and, indemnification during construction.

POSITIONS OF THE PARTIES

[15] As indicated above, many of the issues that were in dispute at the time of the original application were resolved by the parties during the pleadings, negotiation, or mediation processes. Issues such as an authorization for the utility crossing; the costs of construction, alteration, operation and maintenance; the questions of indemnification and notice of work; and the accident notification have all been agreed upon by the parties.

[16] Three issues remain unresolved:

Inclusion of a buffer zone

[17] BC Hydro requests that the agreement include a term wherein BNSF would not engage in any excavation, drilling or pile driving within two metres of the facility without the prior written consent of BC Hydro.

[18] BNSF objects to this clause, submitting that it has the potential to unduly interfere with railway operations. BC Hydro replies that the two-metre buffer zone is standard hydro practice and is very much in the interest of enhancing the safety of the railway and its employees. The clause does not prevent BNSF from working in the area, rather BC Hydro simply needs to have prior knowledge of such activity. BC Hydro adds that it would not unreasonably withhold its consent to any railway activity, if prior notice is given.

Supervision and inspection of work

[19] BNSF submits that it shall be entitled to appoint an inspector to supervise the construction, alteration or maintenance of the utility crossing and that BC Hydro should be responsible for the wages of that inspector.

[20] BC Hydro objects to the term "supervise" regarding the powers of an inspector. It suggests that such an inspector would not be fully qualified to deal with high voltage electricity lines. The role of a BNSF inspector should be limited to the interests of the railway company at the crossing, and would be there to "monitor" the specialized utility activities.

[21] BC Hydro adds that it is agreeable to paying the wages of such an inspector, subject to BNSF paying for a BC Hydro inspector performing similar monitoring activities when BNSF is conducting activities close to the utility facility.

Indemnification during construction

[22] The parties agree that BC Hydro shall indemnify BNSF for all loss, damage, cost, injury, and expense caused by the construction, maintenance or operation of the crossing. BC Hydro's concurrence however, is subject to BNSF complying with the terms of the agreement regarding the construction work within the two-metre buffer zone discussed above.

ANALYSIS AND FINDINGS

[23] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings.

[24] With respect to BC Hydro's request for a two-metre buffer zone, the Agency is of the opinion that it is reasonable for either party to have prior notice of any work to be performed by the other party that may affect the integrity or safety of their facility. As notice by BC Hydro to BNSF has not been raised as an issue, the Agency will direct BNSF to notify BC Hydro, in writing, at least 72 hours in advance, of any work to be undertaken by BNSF that may affect the integrity or safety of the BC Hydro facility, except in an emergency in which case notice shall be given as soon as possible to BC Hydro.

[25] With respect to the appointment of inspectors to supervise the construction, alteration or maintenance of crossings, the Agency is of the opinion that it is reasonable for either party to have an inspector appointed to supervise any work only to the extent that the work carried out by the other party conforms with any rules, requirements or specifications designed to protect the integrity or safety of their own facility. The wages and expenses of any such inspector should be paid by the other party upon receipt of a statement showing in reasonable detail the particulars of such wages and expenses. In the event of any dispute over the content of any such invoice, either party may refer the matter to the Agency for resolution.

[26] With respect to indemnification, the Agency is of the opinion that it is reasonable for a utility company constructing a line work across a railway, to reasonably indemnify the railway company from and against all loss, cost, damage, injury and expense to which the railway company may be subjected by reason of damage or injury to persons or property caused by the construction, maintenance or operation of the utility work and shall so order in this case.

CONCLUSION

[27] The Agency notes that the utility crossing has been constructed.

[28] Based on the above findings, the Agency concludes that:

[29] BNSF shall notify BC Hydro, in writing, at least 72 hours in advance, of any work to be undertaken by BNSF that may affect the integrity or safety of the BC Hydro 230 kV electrical transmission line at Cordova Street, in the city of Vancouver across and under the track of BNSF at mileage 0.84 Burrard Inlet Line off the New Westminster Subdivision, except in an emergency in which case notice shall be given as soon as possible to BC Hydro.

[30] BNSF may appoint an inspector under whose supervision the work shall be carried out, to the extent that any such work by BC Hydro conforms with any rules, requirements or specifications designed to protect the integrity or safety of the railway. Similarly, BC Hydro may appoint an inspector under whose supervision any work by BNSF that may affect the integrity or safety of the utility crossing shall be carried out, to the extent that any such work by BNSF conforms with any rules, requirements or specifications designed to protect the integrity or safety of the utility crossing. The wages and expenses of any such inspector shall be paid by the other party upon receipt of a statement showing in reasonable detail the particulars of such wages and expenses.

[31] BC Hydro shall at all times wholly indemnify BNSF from and against all loss, cost, damage, injury and expense to which BNSF may be subjected by reason of any damage or injury to persons or property caused by the construction, maintenance or operating of the utility crossing as well as against any damage or injury resulting from the imprudence, neglect or want of skill of the employees or agents of BC Hydro in connection with the construction, maintenance or operation of the utility crossing, unless the cause of such loss, cost, damage, injury or expense can be traced elsewhere.