NT Id: Documen . t Name: DECISION COLUMBIA ll, WORK TIME 11 : I: 53 07fllf83 11: :! 9 1105 1/83 12: ll 10: onto Total . . 17: 19 Total : to : 13
THE Commi IN
TA APPEARA I. I 1. Amortization 2. (c) (d) Mamtenance xpenses Income Taxes Rate of Return 4. Interest 5. Costs HI. RATES AND TARIFFS IV. R A CONTE Page No. 2 3 4 6 6 6 7 (ii)
R.J. GIBBS B.J. WALLA JOH N K N . Ms. H.L. MALKIN .S. MORRICE T .S. ELUS R.J. S.S. WONG J.A. W.R. HARPER RTING LTD. Commission N Limited for Cominco for Fordinl! Coal Lim for B.C. Ltd. Nest L Commission Staff
I. INTRODUCTION Colu N L ) for rate ssion Order No. 1, 198 It earn a return on common The to rates on an atlon rate Commi to: the rate by ss No. of a orooertv tax Amend the schedule of rates for a rate of return of 18 Provide for creation of a rate of No. 2 set heari 5, 1 or on of U was 2 on J to costs ng 13.75% the of 0.4% 1, for Order No. G-51-82 to on common interest account to from public bia.
2 Subsequently, in to como1ete a Co. commence on october 27, Accounting down for N , 1982 In ver. for A was F ; G.M.O. Mr. W and Mr. K. as witness Mr. R.B. Stokes, The ret Mr. T. Brown, Ames L to common equity. were Fording Coal Coal Mr. E.H. Director, Engineering Industries Ltd., a special contract of cost u. The ant a test year historical test year in applications. its Throughout to aware ot the on and the concerns of the intervenors and A ~Vl!'-Cil to minimize costs. of applications Inland Nat ural public to matter to was set by Mr. Vice-President, Mr. J.L. A of Columbia. Mr. Kleven also and and of evidence on rate of return on Forest Industries Ltd., Cominco Ltd., and Crows Resources ng ot Crestbrook Forest evidence concerning June 30, 1983 in the is the The industry the current
3 !. Base (a) Add -itio -ns The licant to mains extension the filing !I. were were Applicant. The ssion the amount (b) The ant not conducted study the 1978 Application to establish a nrrmPr working: al. purpose the Commission is to as a tuH out support of (c) The Commission to contributions over the estimated service life of each of the related assets an starting in 1984 f •
4 2. Revenue "-~--(a) The use customer. ant's to the However new olant It to rate return on common to as soon as for The zes its f The ssion ant's of and sales of new loac in rate for me is a m a nrnnl"'\<:::1 a in its rates some as
(c) Losses h loss factor. the The amount or ·-- customer m le of cost to maintain safe and Commission that volume but to customers and applied of per This matter is in L 1983. for current for to anum for for an of costs. On a cost per amounts to 9% per customer. It to are not linked to increased It finds tt the for to 5% per customer. This per customer as set out on for on Inland N Gas
6 ssion to of the cross-over measurement of the be done Return The ant rate of return on common Mr. Brown Domi the Aoolicant and his A lt. Interest account to absorb fluctuations in interest rates. Short-term interest or in a account for as forms a of to held 5. costs of to of of 18 ;v. Ames on on an of trends. in of the common rate of return common test iod. to create a %, 1, 1982, is to cost in account is for over two
7 III. confirms as No. For rate return %on common at of this of J interim rates in No. for ia to rate in
~\t;>r' COlu-z,. BRITISH COLUMBIA ~ . <:$) <o """'·' ~.:if ~ UTiliTIES COMMISSION s ..-. .>~,,~~~ ~ <;:.. ~ ·~;-:,:,;~ "'c!~>.V 0 ! 2 -»~ s cot-/! ~ '" " ' ' co ORDER NUMBER G-48-83 PROVINCE OF BRITISH COLUMBIA BRITISH COLUMBIA UTILITIES COMMISSION IN THE MATTER OF the Utilities Commission Act, S.B.C. 1980, c. 60, as amended and IN THE MATTER OF Applications by Columbia Natural Gas Limited BEFORE: M. Taylor, Chairman; and July 12, 1983 R.J. Ludgate, Commissioner WHEREAS Columbia Natural Gas Limited ("Columbia") applied June 21, 1982 pursuant to Section 67(2) and Section 106 of the Act for interim and permanent rate relief and requested inter alia, the following: (a) confirmation as firm rates the interim rates authorized February 1, 1982 by Commission Order No. G-18-82, (b) amendment of the interim rates authorized by Commission Order No. G-51-82 to allow for a rate of return of 18% on common equity, (c) provision for the creation of a deferred interest account to absorb fluctuations in the interest rate of unfunded debt from that assumed in the Application until the definitive form of financing has been resolved; and WHEREAS the Commission heard the Applications in public hearing and has considered the evidence adduced thereon, all as set forth in the Decision issued concurrently with this Order. . .. /2 TWENTY F1RST FLOOR, 1177 WEST HAST1NGS STREET, VANCOUVER, 1:3 C V6E 2L7. CANADA, TELEPHONE (604) 689-1831. TELEX 04·54536
BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-48-83 2 NOW THEREFORE the commission hereby orders Columbia Natural Gas Limited as follows: 1. The interim rate increases authorized by Commission Orders No. G-18-82, G-51-82 and G-74-82 are confirmed as firm rates. 2. Columbia's Application for increased rates to allow an 18% rate of return on common equity is denied and, in accordance with the Commission Decision Columbia is allowed the opportunity to earn a rate of return of 15.75% on common equity. 3. The Rate Base for the Test Year ending June 30, 1983 is approximately $9,829,536. 4. The Total Revenue Requirement for the Test Year ending June 30, 1983 is approximately $33,190,321. 5. Columbia is directed to establish a Deferred Interest Account for the purpose of recording fluctuations in short-term interest expense above or below 13.6% from July 1, 1982 for such period of time as a 13.6% cost of unfunded debt forms a component of approved rates. 6. The matter of Accounting for Income Taxes will be concluded at a forthcoming public hearing to be held in the Commission Hearing Room on a date to be determined. Accordingly, Columbia is directed to file evidence in accordance with the matters referred to in the Decision on or before August 31, 1983. DATED at the City of Vancouver, in the Province of British Columbia, this /1"' day of July, 1983. BY ORDER /*A; Chairman
SCHEDULE I COLUMBIA NATURAL GAS UTILITY RATE BASE FOR THE YEAR ENDING Per __ Commission us ted t Gas t in service 3,777,952 , 777, 952 Additions to gas Plant in service 705,960 705,960 Less: Customer advances on construction (88,000) 14,395,912 14,395,912 Less Contributions in aid construction 27 ,975) 272,975) Less: Distribution sion Grant 14,043,022 14,043,022 Accumulated iati.on 2,832,645) ( 2,832,645) ustment to accumula iation t 11,056,881 11,056,881 Deferred Income Tax 1,399,461 1,399,461) Deferred Hear Cost ( $ 201148 20,148 work Allowance Cash work 217 728 217,728 * Other work capital items * ustment has been made to accoun for a minor in cash as a result of this decis
of period End of period r
SCHEDULE II COLUMBIA NATURAL GAS UTILITY INCOME AND EARNED RETURN Per Commission us ted Sales volume (Mcf UTILITY REVENUE Gas Sales - existing rates $ 32,401,079 $ 32,401,079 - interim rates 776,516 776,516 - deficiency (a Total 33.<.-:.;;;~.:.....;;;_;:;. Purchase of gas 28,302,869 - 28,302,869 tion & Maintenance 1,883,330 ) ( 70,377) ,812,953 Hearing Costs - 40,295 40,295 , franchise and taxes {2 ) 914,107 914,107 ia t:i.on 314,392 - 314,392 Other operating revenue -~-~,---····-· ___. ,_ Utili evenue before taxes Income taxes - payable 528,605 (115 ,096) Total 696,231 EARNED RETURN s __ l._4_0_5_L32l UTILITY RATE BASE RATE OF RETURN ON UTILITY RATE BASE 1 4. 33% 13.44% Interim includes proper tax and interim rate increase , Tab 17, ) ( us tmen ts to reduce an ch ise fees are immaterial.
) Reductia1 to deficiency re Commission findings per this Deci • ) tion and Maintenance Exh. 9, Tab 3, Sch. 1 and Tab 5 pq. 15.00 1982 Normalized 0 & M cost. $1,598,322 # of cus tamers = ,503 Average cost per customer 138.95 1983 I of customer 12,426. Allowed 0 & M expenses .95 x 1.05 = .9 mul ied by 1983 i of cus tome s $1,812,953 0 & M costs per tion tment Costs of $80,590 to be amortized over two years
SCHEDULE I I I COLUMBIA NATURAL GAS LIMITED CALCULATION OF INCOME 'rAXES ON UTI.LITY Per Commission s CALCULATION O.F INCOME TAXES Earned Return ,405,35 $ ( 841261) ,32 ,090 Deduct - interest on debt 792,6 ) 14, 807,271 - non-tax deductible Accoun income after tax 608,6 ( 98,83 509 '827 Deduct-Timing difference ) Taxable Income after Tax come tax rate ent 53.8% 53.8% Income tax (deferred 52 0% 52.0% Taxable income before income tax $ 619,712 $ ( 213, 933) $ 405,779 Add amount provide for de fer red tax Taxable Income Income tax - current $ 528,605 $ ( ,0 $ 413,509 - deferred Total (a) Return on debt portion f rate base : 66.77% X 9,829,536 X 12.30% = ~~~~ No us tmen t has been made accoun for ificant as a result of this deci
Per ication Commission ~~~~-~-~ Unfunded debt ,285,415 (a)$502,17 -term debt 1,893,250 Common Total (a) ustment to reflect forecast unfunded debt per Exh. 25, Tab 14, Page 5. tment to reflect past actice where current earn as dividends. % Embedded Cost $4 787,588 47.85 13 60% .51 • 70 6 680,838 .77 12.30% are paid out
1981 0 & M costs ,338,376 ( ) number of customers 10 '6 90 (Exh. 9, Tab 3, Sch. ) Sales Volume (Mcf) ,491 835 ) 0 & M cost customer $ 5.20 % change from previous year - 0 & M cost per Mcf sold 15. % change from previous year - Note: ( ) Exhibit 19 { Exhibit , Tab 15.00 { 3) Exhibit 2 5 APPENDIX A 1982 1983 1983 ,598,322 ,883,330 ,B 2,953 ( 3) ,503 12,426 12,426 9,208,118 8,911,011 8,911,011 ( 2) ( 3) $ 138.95 $ 151.56 $ 145.90 11.0% 9.1% 5. 0% 17.36¢ 21 3¢ 20.35¢ .2% 21.7% 17 2%
LIST Commission No. J Affidavit - Proof of of N Columbia Natural Gas L Schedule of N Gas Lim Columbia Natural Gas Limited Columbia Natural Gas Lim Application-Update of Volume I Natural Gas Lim Application- Volume 4, Testimony of Columbia Witnesses Columbia Natural Gas Lim Application- Volume 5, Testimony of T. Brown Columbia Natural Gas Lim Application- Response to Request for Additional. Information, Columbia Natural Lim Application- Crestbrook Forest Industries Ltd. - to Request for Additional Information, ColumbiaN Columbia Natural Gas Lim on Utility Income June July 1, 1982 -June 30, 1983 EXHIBITS No. 1982 of 2 to its 3 4 - 2 5 6 7 8 27, 1982 9 3 !I l Statements for 13 M
LIST OF EXHIBITS and Prepared as requested of from Thorne to Mr. Ken M accounting procedures M ntenance Costs - Pulp M Crestbrook Indus tries Ltd. Outline of Evidence E.H. Jackson Qualific and Letter November 18, 1982 from Gas L to B.C. Utiiities Letter with ColumbiaN Natural Lim October 28 and 29, 1982 Direct of Bond Rati -Trans Exhibit No. Dominion 16 T. Brown. 17 Mcf Sold 19 Monthly Increases bia Nat ural L 20 son of 22 23 of N with attachments 25 to -27 A B Ltd. c
N Matter of an to Amend its me am Ltd. of Witness Watkins of Income Various Copy of Natural Gas Co. L of Gas 1n I Dollars - Year lO lA l' 3, 4, 5, & No. D E F G G.D. H I from C.I.C.A. J K L Cost M N 0
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.