IN THE MA'rTER OF THE UTILITIES COMMISSION ACT S.B.C. 1980, c. 60, as amended and IN THE MATTER OF APPLICATIONS BY BRI'riSH COLUMBIA HYDRO AND POWER AUTHORITY -DE -CI -SION December 4, 1985 M. Taylor, rman J.D.v. Newlands, Deputy Chairman D. B. Ki ck, Commiss
A P P E A R A N C E S C. B. JOHNSON D. C. DUFF and For B.C. Hydro & Power Authority L. F. HINDL.E R. B . WALL.AC.E For the Council of Forest Industries, R. ,J. GATHERCOL.E For the Consumers' Association of K. E. GUS'rAFSON For the B. KONST D. M. MASUHARA For Inland Natural Gas Co. Ltd. C. J. ALLNUTT For the Management and Profess S. WATSON For R. I.. PEEL For the Internat J, M. BLACK E. MARZOCCO On ssion Counsel and Assoc ion of British Columbia, the E Producers Canada, Federated Ant Poverty of B.C., the B.C. Old Pens rs' Organization, Local 217-IWA Sen s of the City of Nelson 1 loyees Soc of B.C. Of ce & Technical s' Union, Local 378 1 Brotherhood of Electr Local 258 s own behalf own behalf
1.0 Introduction On November 28, 1985 the on behalf of British Columbia ("B.C. Hydro"} in which B.C. Hydro objected to answer certain i requests made of cormnencement of a pubLic hear Commission will cons whether it should confirm or vary two interim to B.C. es relate to B.C. Hydro's March 31, 1985 and March 31, 1986. heard submissions on behalf of Intervenors objections of B.C. Hydro. In these Reasons for Decision the Commiss its views re ing the obj 2.0 By Appl March 20, 1984 B.C. Hydro to amend electric ff rate schedules. were amended e ive il 15, 1984 by No. G-18-84 authori an to at a public hearing. a further increase of 6.5% to be effec In response to an amended Appl Commission Order No. G-48-85 e of 3.75% e June 13, 1985 subject to review at a public hearing. ss heard ssions and Power Author pr to the At the publ hear the . The interim seal years end The Commiss also the s ons sed by B.C. Hydro. ied The schedules ss Order se of 6.5% subject B.C. Hydro then ied for April 1, 1985. ion dated May 13, 1985 the zed an
2 By Application dated July 11, 1985 B.C. for an Order of the Commiss Commiss Order No. G-26-82. directed B.C. Hydro to create an account to be known as the "Rate Stabilization Account" which account was to be credited with the revenue derived from the s lus e c energy and be transferred the amount of $60 as will reduce the account balance to seal subsequent to March 31, 1982. the Application of July 11, 1985 the Commiss No. G-62-85 which varied paragraph 5 of Order No. G-26-82 to B.C. Hydro on an record as income addi 1 to $60 the Rate Stabilization Account, electricity an amount exceeding $130 mill direct expenses. By Order No. G-62-85 the Commiss stated that would further cons rescinding Orde No. G-26-82 on an acceptable alternat to the with e surplus sales electricity, which matter may be an item to be cons red at the By Order No. G-77-85 dat Commiss ordered that a publ confirmation or otherwise of the two became ef April 15, 1984 appl resc 5 of 5 of that Order had sale of which account was to ll , or lesser sum l, in each the In response to issued Order basis for seal 1986 to 11 trans rred from lus es of be also to B.C. Hydro of ent basis dealing rate . 11, 1985 the nino to increases June 13, l 5 was
3 commence in Vancouver on No. G~77-85 also : "B.C. Hydro shall any event address the fol ng issues: (a) forecasts over a per years of export surplus sales of electricity and the future use of the Rate lizat Accountr (b) forecasts over a per of domes c sales of e (c) the appropriate accounting treatment under-utilized 7 and such other matters as are required for the purposes of the hear confirmation or se of the i:wo interim reases became ef and June 13, 1985." On October 31, 1985 the Commiss brought on behalf of the Industr public ring of Applications of B.C. Hydro. ion adjourn was Intervenors. Counsel who took the pos that the Appli been provided by B.C. was not Hydro's response to in Counsel supporting the adjournment made reference to B.C. Hydro's lack of response to the No. G-77-85 set out above which address certa issues. On the hear adjourn counsel for B.C. Hydro took the pos Appl as fi re r 4, 1985. Order not 5 not 5 ; , namely, the ive April 15, 1984 heard a mot 1 Intervenors to adjourn The . lS favour of the adjournment 1 which had and that B.C. requests were not . s Order rected B.C. Hydro to of the to that the es to
4 were adequate. In its decis on motion the Commission noted that B.C. Hydro had a letter of October 24, 1985 to the Commiss wh stated: that informat.ion regarding to those test per is not necessary in order for the Commiss the issue before , notwithst.and the provis of 6 of Order G-77-85 to the effect that such informa.tion may be prov ." The Commission also noted that B.C. Hydro, answer to an informat request s B.C. Hydro's best ass future e sales and seek a forecast of domest electricity sales, both for 1985/86 1990/91, had said that "Order G-77-85 does not require B.C. to forecasts of revenues or of the Rate Stabilizat Account the test end 31 March 1986". The Commission went on to say that. the effect of the answer by B.C. Hydro was a refusal to provide forecasts of surplus sales or sales al the Commiss had ordered that should so "The submission by B.C. Hydro is a of the Commiss Order. The Commis not order that B.C. Hydro may , required B.C. Hydro to address matters. B.C. Hydro has led, or refused to do so." The Commiss also stated:
5 "The Commission has outlined in hearing Order areas which requires B.C. Hydro to address. With regard to the forecasts the Commission s that will be as soon as possible and will period." In Order No. G-90-85 wh was made re o.f the adjournment Applicat the Commiss ordered that the public hearing be adjourned November 4, 1985 to January 6, 1986, set a for the filing of and responding to additional ion requests. B.C. Hydro was ordered to respond to relevant requests by November 20, 1985. The Co~niss also ordered that B.C. Hydro address, by November 20, 1985, the three issues identif in Order G-77-85. As of November 28, 1985 B.C. Hydro had Volume 5, Parts 1 through 5, response to reques·ts. Volume 5 (Part 6) has now been . Volume 5 (Part 4) which was l e by B.C. Hydro on November 20 contains B.C. Hydro's e rement that it address the three issues ified in Order G-77-85. It also contains many responses B.c. Hydro had objected to answer the in requests posed to . The Commiss sat on November 28, 1985 to hear the submissions of B.C. Hydro re the basis for B.C. Hydro's objections to answer sts. Intervenors were noti that the would be ing s ss B.C. Hydro on repre ives of rvenors submiss .
6 3.0 The Issues In its responses, B.C. Hydro which B.C. Hydro objected to answer The f st ground was that B.c. Hydro cons i requested was not relevant since it related to a beyond March 31, 1986. was stated to be: "In B.C. Hydro's s sought ending 31 March 1985 and 31 March 1986 is not necessary at this time for the Commiss the issue be or otherwise of the rate increases ef and 13 June 1985." The second ground of obj related to labour requests which B.C. to this subject B.c. stated: "B.C. Hydro is preparing to enter collective various disputes with organizations Hydro employees. submission, to provide the material sought might prejud Hydro's pos ngs." The rd ground of object cons the requested related to negot deal the sale the el cal . In its responses B.C. Hydro stated the objection in the llowing manne : upon requests. that. the In wr the obj the in+-'"'"'"''"" the two test years to of the rim ive 15 April 1984 on was that the ion . In answer to cons as rela is B.C. Hydro's ion in those was that B.C. Hydro s market of surplus
7 "B.C. Hydro is concerned that the public sion of marketing meetings held to further them could prejudice the pos B.C. Hydro in its dealings with customers, u.s. government agencies and other parties claiming an B.C. Hydro there supply that information. Because of the No. G-62-85 revenues subsequent to mill in need for the .increases for which is being B.C. Hydro objected to answer on the ground that B.C. Hydro considered that the in request related to responses that obj was stated as follows: "The question relates to Gas Operations and B.C. Hydro is not sting an for its gas services. There fore ·the question is not relevant to the otherwise of the interim electric rate reases." B.C. Hydro also cated that certain requests of on the ground that those information requests related to rate design matters and were not relevant to the oublic hearing. During the course of was by counsel for B.C. Hydro and counsel for the Industrial Intervenors that an agreement had been reached re manner of relating to s, tactics or of the and 1 st such matters. ful decl s to $130 effect on the . " certain informat s . In e revenue rmat or was objecting t.o Indus 1 rvenors ssions on November 28 it
8 requests and accord.ing the Commiss that issue. In deciding the ssues before it the Commiss keep mind the subject matter of the Appl Hydro for rate increases, the purpose ss and the s framework Applications are to be considered. increases which are being ewed by the Commiss to the two seal years Commiss must conduct suffic ions of B.C. Hydro to ensure that the rates are and will be fair and reasonable to the customers of B.C. and will ensure the nancial Commiss must examine B.C. Hydro to ensure is manag in an efficient manner. consider are not unique to B.C. sent whenever the Commiss of public utilit s that In the case of B.C. Hydro the Commiss into cons Spec 1 made pursuant to Section 3 of the That Spe 1 rection applies of the Commission's powers and funct B.C. Hydro and includes a statement:. that "the should ... improve its serv wi reasonable consis interest coverage ratio of 1.3:1 on such need not deal with must of B.C. the ic hear the B.C. The ra·te relat.e March 31, 1986. The ion of the r of B. c. Hydro. The B.C. Those but rather are cons rs rate . must also take No. 1, a regulat li es Commiss n Act. re to the exercise connect ty st coverage rat on electr so as to acn1eve an ce by the
9 1990/91 fiscal year . II To comply with the Special Direction the Commiss must not only ensure that the rates being proposed will be and reasonable the years which they apply but also that B.C. Hydro is moving towards the required rest coverage rat with "reasonable consi ". During the course of ss became that Intervenors were not only seeking answers to quest which B.C. Hydro had objected to answer but were also complaining of B.C. Hydro's lack te answers to ques which B.C. had to answer. An example to which re was made on November 28 was ion 4 posed by the Office and Technical s Union. The quest and answer are set out below: "QUESTION Does B.C. Hydro conduct a cost bene t analysis before submitting tenders for work to outside con·tractors? If so, what. or cr are used to jus fy contracting out work as opposed to Hydro emp s per ng this work? ANSWER The factors or criteria used to justify contracting out work as opposed to Hydro employees per.forming t.his work are set out in Section 14 of the and Power Author Act, R.S.B.C. 197 , c. '14. The shall publ advertisement, or when then by public not , for the construct repair of all power , except in case of ss emergency, where de would be jurious to the public or where from the nature of the work it can be more ly cally e by
10 off rs and servants of the ty.' The the '"power plant" or" " includes all land, water, rights to the use water, buildings, works, machinery, installat , materials, devices, ings, apparatus, appl offices, furn and , tools, stores and supplies, luding stores and supplies, constructed, red or used or adapted, or that, in the opinion of the authority, might be for or in connect the of power;'" B.C. Hydro did not object to answe that ques but the answer is wholly unresponsive to t.he . B.C. Hydro did not if cond.uci:ed a cost bene analysis before submitting tenders and not what s or eria are used in such cost bene t ana es. The Commiss cons s that the answer to the above question s lar unre answers cause unneces delays and inter th a and eff ient ic hearing process. The Commission requires B.C. Hydro to respond in a meaningful way to all ques to wh has not taken object and lar to the question set out above. 4.0 Co~nission's Cons rations and Cone The Commiss in s Order No. G-77-85 red that B.C. Hydro address ts of e surplus sales of e the use of the Rate lizat .Account. On October 31, 1985 the Commission noted that it
had required B.C. Hydro to address that matter and went on to order B.C. to address the issue sales. The submission of B.C. Hydro found under Tab l of Volume 5 (Part 4) does not sales, although it says that "In rly safe assumption that some B.C. Hydro now ludes such an assumpt in its planning". 'rhe Commission believes that clear to B.C. Hydro that B.C. e of export surplus sales of e present to March 31, 1991. The Commiss Hydro to provide such Dur the course B.C. Hydro, indicated that B.C. Hydro was computer runs regard e elasticity s ing directs that B.C. Hydro prov Intervenors the elas ity stud together with related under B.C. Hydro's best j as to the lower 1 of t Hydro is further directed to jected range of e sales to be best e of the In specifying the under 11 future any forecast of that is a sales will be made, of export sales has made abundantly should its best ity from the d s B.C. as soon as poss e. ss Mr. Duff, on behalf of ing certain sales had available e s. The Co~niss to the ss and to and the runs as , reflecting 1 and to March 31, 1991. B.C. cate the level in the ch B.C. Hydro cons1aers level such sales. ass the Commission
12 will not e that B. c. Hydro reveal any in which may signif ly affect In Order No. G-77-85 the to address the issue of "the treatment for under-utilized i requests which B.C. on the basis that considers that "the for per beyond ... 31 March 1986 is not necessary relate to the utilizat of plant subs to March 31, 1986. proper ion of the issue of the appropriate treatment unde Commiss , and Intervenors, must have available information rela·t to the extent of the utilizat years. B.C. Hydro is directed to requested relat to the utilization of B.C. Hydro's facilities for the pe up to and enu1ng 31, 1991. Commiss is red by to if B.C. Hydro will ach ratio of 1.3:1 on electr r. In order to comply with ssion must have lable Hydro's financ posi years of seal 1985 and 1986 but also for the to 1990/91. B.C. is directed to answer requests seek such on ions. ss B.C. Hydro te account ". A number the has refused to answer format sought II fiscal years In order that there can be a lized , the future i as lud seal l Di No. 1 an interest coverage e by the 1990/91 f cal 1 No. 1 the format ng B.C. not the test seal years That is not to say
13 that B.C. Hydro need prov detailed expense information for the years beyond March 31, 1986. however, suf cient Commission to if, el ci sales, the which may reasonably be Rate Stabili Account, the required will be achieved reasonable consi 1990/91 seal . 'rhe second of object sted related to labour nego,t who addressed that objection indicated that seeking ion relating to labour stated by Mr. Allnutt on behalf of M.A.P.E.S. at page 254 of the transcript" ... is matters that are before the Courts or in collect negotiat should not be hearing because would s t si and we don't want that". As both sides to that issue ing labour iations should not be before the Commission, the Commission need not a matter of principle, but information requests to which B.c. Hydro has objected, to if the relevant to the . B.c. Hydro must, to allow thz: the forecast domestic sales of electricity , and the use of the rest e by the was that the formation . The Intervenors were not iations. As nly our pos that to this ly a labour that matters the objec on must the request is In Schedule "A" to these
Reasons for Decision the Commission has dealt with individual ques . The third ground of obj related to i surplus el 1 ene in the e requests to which object ground were in requests posed acts on behalf of the Consumers Associ other Intervenors. Mr. Gathercole sa that: II . The second that they get B.C. Hydro to reveal 1 in ions in sess Hydro is concerned that any of this information will impact on, I to discuss that with Mr. Du.ff, and I am sure we can work this out". The Commission does not wish to made publ if could judice the negotiat of the and B.C. Hydro potential customers, u.s. :les claiming an st in such matters. Commiss , however, is concerned that B.C. Hydro may have re to Canada or the States of America on the basis of a worded object . The and counsel to confer with Mr. sted to ensure material wh 14 was that the formation dealing with the sale of market. Many of the was taken on that Mr. Gathercole who of Canada and at page 180 of the all these que cally not trying, as I . And, if , in s, am certainly ire ion be position dealings wi t.h ies and other The is al publ ss directs B.C. Hydro le and others is relevant and
will be useful the publ hea at t.he same that the negot the nee and B.C. Hydro is not adversely affected. With regard to the object requests relate to gas ope with the pos ion taken by B.C. Hydro. es under ew by the Commission relate only to the el c operations of B.C. Hydro. relating to B.C. Hydro the Commiss there should be an ion of the electric ope . As as the two ser ces costs of ng natural gas s from the costs of elect c s In Schedule "A" to these Reasons for Commiss s its direct information requests which B.C. Hydro has not All of the in objected are not luded on Schedule "A" as the Commiss B.C. Hydro s counsel to work with Mr. Gathercole and other intere resolve the B.C. on the basis that the informat an adverse impact on With to the information ch B.C. Hydro should answer, B.C. Hydro is directed to answers within seven days. 1.5 is made available while ting position of that format_ion , ~the Commission agrees The rim rate In its 1983 De sian not suggest that gas s the should remain apart ce. s the re ing of the answered. to B.C. Hydro has es an effort to obj to answer , if prov , have respect t sales. sts on Schedule ...A "
16 Dated at City of Vancouver, Province of British Columbia this ~Ar day of December, 1985. ~ M. Taylor,cha}!T"man
SCHEDULE "A" INFORMATION DIRECTIONS OF THE COMMISSION Volume 5 (Part 1) B.C.P.I.A.C. No. 3 No further response B.C.P.I.A.C. No. 4 No further response B.C.P.I.A.C. No. 9 No further sponse B.C.P.I.A.C. No. 22 No further response B.C.P.I.A.C. No. 29 B.C. Hydro's best as the volumes and revenues of ure sales .for 198 1990/91 are to be Volume 5 {Part 4) B • C • P • I • A • C • No . 7 to a most recent B.C.P.I.A.C. No. 8 is detail descr1D1ng jects or expenses are to be reduced if such informat is lable B.C.P.I.A.C. No. 11 B.C. B.c. documentat Marzocco No. 13 B.C. need not answer relat to s Marzocco No. 14 to advise if the would be cal revenues but need not informat 1 Marzocco No. 19 B.C. Hvdro need not answer further
INFORMATION DIRECTION S OF THE C . OMMISSION Marzocco No. 2 B.C. Hydro need not answer further that portion of the quest relating to B.c.u.c. staff No. 1 B.c. Hydro is to in as requested B.c.u.c. staff No. 3 B.C. to the information requested showing domest and export sales on a gross basis and is to fy the factors caus material differences as sted B.c.u.c. Staff No. 5 The staff will the quest B.c.u.c. Staff No. 6 B.C. Hydro is to summary data as requested M.A.P.E.S. No. 1 B.C. Hydro is to answer the quest as ed at 261 of the transcr M.A.P.E.S. No. 2 B.C. need not answe~ O.T.E.U. No. 1 B.C. Hydro is to a led cost analysis of contrac for the seal years March 31, 1985 and 1986 O.T.E.U. No. 4 B.C. Hydro is to provide a respons answer City of Nelson No. II(2) B.C. Hydro is to the in as requested Volume 5 (Part 5) B.C. P • I • A. C. No. 2 5 B.C. Hydro need , memoranda or other documents repre ng the of field or dist ct . The subject of qual ce or securi may addressed during cross-of B.C. Hydro's sses Marzocco No. 16 B.c. Hydro is to answer a manner similar to B.C.P.I.A.C. No.8 above B.C.P.I.A.C. Nov. 6 No. 7 B.C. need not prov requested documents. Ef and sec B.C. B.c. Hydro ses
INFORMATION DIRECTIONS OF THE COMMISSION B.C.P.I.A.C. Nov. 6 No. 10 B.C. Hydro is to provide the information as requested O.T.E.U. No. 3 B.C. Hydro is to the requested formation to March 31, 1986 Industrial Intervenors No. 26 B. c. need not its assumptions or forecas·ts revenues on a monthly basis but as noted the Reasons for Decis it is to such information on an annual basis Volume 5 (Part 6) Marzocco No. 4 B.C. Hydro is to provide re the number of customers the Keat substat will serve and the load forecast to 1990/91 B.C.P.I.A.C. Nov 27 No. 4 No further response required B.c.u.c. Staff No. 4 B.C. Hydro is to provide the in format Westcoast No. 4 No further of Nelson No. IV(4) B.C. Hydro in as l Intervenors No. 9 B.C. is to provide the in as ted for the period to 1990/91 Industrial Intervenors No. 11 B.C. Hydro is to the as requested
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.