DOCUMENT SUMMARY Document Id: 0009B Document Name: DECISION WKPL Force Maj. Operator: S. Werner fC. Smith Author: RJL/DBK Comments: December 20, 1984 STATISTICS OPERATION DATE TIME WORKTIME KEYSTROKES Created 02/10/84 14: 12 :45 7027 Last Revised 12/20/84 10:34 :02 71+ Last Printed 12/20/84 I 0:37 Last Archived 12/18/84 16: 17 onto Diskette 0063B Total : 16 Total Worktime: 6:00 Total 356 Total : 21+ 323 Pages to be printed: 16
IN THEM OF THE UTILITIES COMMISSION ACT S.B.C. 1980, c. 60, as and IN THE MATTER OF A CONTRACT DISPU BETWEEN WEST KOOTENAY POWER AND LIGHT COMPANY, LIMITED and B.C. TIM LTD. D N December 19,1984 BEFORE: J.D.V. New Deputy Chairman D.B. R.J. m
TABLE OF CONTENTS APPEARANCES LIST OF EXHIBITS INTRODUCTION THE ISSUES I. Force Majeure 2. Ter 3. ms and Order Page No. (i) i) 2 4 5
APPEARANCES R.J. GIBBS B.J. WALLACE G.K. MACINTOSH J. WILSON J. BROOK J.S. McKAY S.A. ASH G. SALEBA T.B. GIBBON D. ISHERWOOD R.J. BAUMAN K.C. McKENZIE M.M. MOSELEY K. GUSTAFSON R.G. KUHN R.J. GATHERCOLE DR. J.P. ACTON M. ANDERSON J. HARRY R. MILES G. KENYON I. ZAHYNACZ, P.Eng. J. McDONALD Wm. EYERS K. KIDD DR. R.H. SARIKAS R.D. DEANE T.D. TUTTI Commission Counsel West Kootenay Power and Light Company, Limited c. of Kelowna City of Penticton Corporation of the City of Forks Corporation of the District of Summer Corporation of the City of son Consumers' Association of Canada (B. C. Br Anti-Poverty Groups of B.C. B.C. Old Age ioners Organization Sierra Club of Western Canada B.C. Wildli Federation of Cast For Self B.C. Timber Ltd. . and Wholesale Customers B.C. Utilities Commission Cominco Ltd.
APPEARANCES G. GOULD K.BENTLEY MAYOR C. LAKES G. JENKS S. MOULD J. BIRT W. SWEENEY D. BATEMAN J.P. DOROZ G~ HANN J. MENN D.A. KNOERR T.R. CARTER S. MOULD Commission Staff Hearing Officer Court Reporters (i i) Princeton & Power Limited City of Trail of Rossland Self B.C. Timber Ltd. For Self and Irrigation B.C. Fruit Growers Association Fairview Heights Irrigation District B.C. Federation of Agriculture Association of B.C. Irrigation Districts J. UN R. BROWNELL W.R. HARPER W. B. AUDIOTRON ENTERPRISES LTD.
LIST OF EXHIBITS Commission Order No. G-51-83 Affidavit - Proof of Pub! of Notice of Hearing Affidavit of Service of Documents to all Intervenors West Kootenay Power and Light Company, Limited "1984 Rate Design" Volume 1 June 15, 1983- Comprising Cost of Service Study-Revised ms and Conditions and Rate Schedules West Kootenay Power and Light Company, Lim Adjustments to Cost of Service for the Forecast Year Ending December 31, !983 W KPL - Summary of Adjustments to Cost of Service for Forecast Year Ending December 31, 1983 with Adjustments for Princeton Light and Power and Irrigation West Kootenay Power and ght Company, Limited- "1984 Rate Design" Comprising T es timon y Written Volume 2 August 8, 1983 West Kootenay Power and Light Company, Limited- Reply to Request for Additional Information regarding 1984 Rate Design, Volume 3 September 8, !983 West Kootenay Power Company, Limited - Additional Information 1984 September 13, 1983 West Kootenay Power and Light Additional Information September 16, 1983 List of Errata for 1984 Rate Letter from J.S. Brook of West Kootenay Power and Commission Secretary re: 1984 Rate 1983 with attachment Response to Request B.C. Example of the Im of Granting B.C. Timber a "Force Majeure" Clause Exhibit No. 2 3 4A -Summary of 4B s 4C of y Witnesses-5 6 y to Request Volume 4 7 y, Limited -Reply to Request for Volume 5 8 9 gn, Volume l, 10 ll 12
LIST OF EXHIBITS Written Evidence of B.C. Timber Ltd. - Volume I Written Evidence of B.C. Timber Ltd.- Volume 2 Filed Evidence of K.H. Kidd on Behalf of the Intervenors, City of Kelowna, the Corporation of the City of Grand Forks, the City of Penticton and the Corporation of the District of Summerland Evidence of Jan Paul Acton filed on Behalf of Consumers Association of Canada, B.C. Branch, the Federated Anti-Poverty Groups of B.C. and the B.C. Old The Prepared Testimony of Robert H. West Kootenay Power and Light Study) Long Run Incremental Cost Revised Exhibit 18 - Electric LRIC Studv Brief to B.C.U.C. re: Design Application by West Kootenay Power Light Company, Limited by Economic Development Commission Regional District of Kootenay Boundary on behalf of Two Cities and ee in the West area. Intervention by D.H. Bell-Irving on behalf of Princeton Light and Power Company, Limited WKPL- Calculation of Rate Change indicated before Adjustments to the Cost of Service Study Forecast Year December 31, 1983 W KPL Submission to B.C. Utilities Commission regarding Proposed Revision to Extension Policy Witness Aid "A" - Comparison of W KPL Capacity Load/Resource Tables for January, February and March I Witness Aid "B"- Comparison of W KPL 1983 Forecast Steam Energy Resources with all of Firm Energy Resource from Cominco West Kootenay Power and Light Company, Limited -Response to Commission request of November 8, 1983- Percentage Rate Increase (Decrease) including Rate Design Adjustments PreliminarY Forecast 1984 to 1988 Exhibit No. 13 Ill-15 Intervenors, the Pensioners Organization 16 17 Limited lc (L.R.I.C. 18 !8A 19 20 21 22 3 23 24 25
LIST OF EXHmiTS WKPL- Response to Question Re: Single Phase Service Submission by S. Mould on behalf of B.C. Association of Irrigation Districts Agreement between B.C. Hydro and Power Authority and West Kootenay Power and Light Company, Limited Witness Aid - W K PL - Residential Class - Average Consumption Cominco - 1982 Cost of Power Surplus to WKPL January, 1982 Response by Princeton t and Power Re: Investment as requested by W K PL WKPL- Residential Rate of Return WKPL -Rate of Return by Customer Class WKPL Analysis of Discount for Supply Transm ion Line Voltage W KPL -Analysis of Discount Applicable to Services Metered at Transmission Voltage Statement in the Legislature the Hon. Wm. G. Davis, Premier of Ontario Re: Rural Electrical - Aoril 10. 1980 W KPL - City of Penticton Estimated Return on Equity WKPL -Summary of Adjustment to Cost of Service for the Forecast Year Ending December 31, 1983 Incorporating the Re-calculations of Excess General Service Revenue and Submission by Graham Kenyon on Letter G.F. Kenyon to B.C.U.C. dated WKPL- Amendment to Question C3(b), B.C. Timber Ltd.- Exhibit 4 (WWE Revised) Re-distribution of Residential Subsidy Exhibit No. Three Phase 26 27 28 29 -Sale 30 Customer 31 ison 32 33 Power to sat 34 35 36 37 Distribution Investment 38 f of B.C. W fe Federation 39 1980 40 3, Exhibit 6 41 42 (v)
LIST OF EXHIB Increase in Capacity Cost by 28,000 kVa as the Allocator in place of 22,400 kVa of Increasing Transmission Response to Commission Request : Allocation of Operating and Maintenance Expense Reply to Commission Staff Request Re: Allocation of Net Plant Response to Commission Staff Request of Service Study W K PL - Rates and Customer Services - Collection of Deposits Security and Revenue Guarantee Deposits Sample of W K PL Application for Service Photocopy of Excerpt from Magazine "Skeptical Eye" (Discover) October, 1983 Photocopy of Article in "Science" WKPL Irrigation Cost Comparison- September, !983 W KPL - Cost Comparison between Residential WKPL - Miscellaneous Outstanding Hearing - November, 1983 WKPL Details of Transmission Facilities Recorded Inappropriately in Distribution Related Accounts WKPL - Proposed Amendments to Electric Tariff Resulting from Customer Input at 1984 Rate Hear Letters from WKPL to David Bateman Re: Brldesville Area W K PL - Risk by Customer Highest Risk WKPL - Impact on Cost Structure of Operation of B.C. Timber's Co-generation Exhibit No. 43 Base by $13,117,090 44 45 46 : Sensitivity of Cost 47 48 49 50 -July 15, 1983 51 52 Irrigation 53 Re: !984 Design 5l~ 55 56 Rates in 57 to 58 59 (vi)
LIST OF EXHIBITS WKPL - Estimates of Receivables Resul Proposed Tariff Revisions Rossland - Significant 1983 - Significant 1983 WKPL Percentage Rate Increase (Deer Adjustments - Preliminary Forecase 1984 to 1988 Resulting from Amendment to Schedule D and Exhibit 4B W KPL November 29, 1983 - Summary of Revenue of Proposed Tariff Revisions for the Year 1982 WKPL - Consideration of Submission by Princeton Light and Power Company, Limited Regarding Excess Distribution Investment Copy of Contract between Cominco Tariff Sheets and Terms and Conditions of Schedules ll, 12 and !3 Force Clause WKPL - City of Pen Submission of Mr. s. Stanley Statistics com The Association of B. C. Irrigation Districts !977 Statistics compiled by The Association Distr lets 1980 Statistics The Association of B. C. Districts 1981 B.C. Federation of Agriculture - 1982 (Cost of Production) WKPL - Proposed Amendment to Exhibit No. Implementation of 60 61 62 Incuding Rate 63 mated Effects on December 31, 64 65 and B.C. Timber Ltd. 66 ial 67 68 n on Equity 69 70 71 B.C. 72 73 ptions - Yearly Pounds 71+ Schedule - Outdoor 75 (vii)
LIST OF EXHIBITS Memo from J. Simpson to Chairman of Public Utilities Commission daterl February 2, 1965 Re: WKPL Proposed Rate Schedule 79 Optional Irrigation and Drainage Rate Residential Class Rate of Return Analysis of 700 Cost of Service Studies Graph Cornpar Investment per WKPL - Low Pressure Sodium Lamps Brief of John Dorosz a Tree Fruit mer in the South Okanagan Letters from Sierra Club to WK PL with Attached List of Questions Re: Low Pressure Sodium Lamps Comparison of Four Proposed Seasonal Rates for WKPL and B.C. Hydro Residential Tariff Affidavit of Douglas P. Or a City Nelson Map Showing Electr WKPL - Response for Information Regarding Appropriateness of using 2 CP for Alllocation of Transmission Related Expenses Loading/Capacities WKPL - Reply to the Request of Robert Miles of the Sierra Club of Western Canada Re: Low Pressure Sodium Lamps B. C. Federation of Agriculture - Br Guidelines for Benefit/cost Analysis Wholesale Class Cost Allocations W orklng Papers to Determine "Incremental Investment in Transmission" in Column 6, Schedule 5, Exhibit l8A WKPL - Analysis of Expenses Recoverable in the Basic Char Applicable to Rate Schedule 61 - Small lrrigation WKPL - Exhibits that Result in Exhibit No. 7(, 77 78 79 80 81 82 83 Letter from W K PL 84 Distribution 8.5 86 87 88 89 and LR!C 90 91 92 to Material 93 (vi
INTRODUCTION This Decision concludes matters which have been of the Com in September I Kootenay Power and Light of its existing rate structure. The matters involving a di between WKPL and its B.C. Tim Ltd. ("B.C. ")( 1 ) over power supply eement. were several matters at one of " " had been the Com 1982. Briefly, KPL assumed the (" Cominco ") in a power eement between Corninco and B.C. ln over the which in the Decision of ber 1982 directed that the "force restored, matter was to be reviewed at a The matters in were y The however, concluded that the issues involved in " distinct to warrant a (I) As of April !981+, to B.C. Timber. from a 3 with an West ited (" WKPL ")for a of the rate issues included industrial customer, n provisions of a proposed in the of a of and Corninco Ltd. a " eure" provision agreement. eure" provision be in Decision, the rate as of Hearing. 5, 1984 followed, " were sufficiently ease of to to
2 ISSUES The issues to be resolved between the parties to the proposed eement are as follows: 1. The inclusion, and terms, of a "force majeure" provision, 2. Termination provisions, and 3. The application of the general terms and conditions of the WKPL tariff where the proposed eement fails to make specific provision. I. "Force e" clauses of the nature discussed here are a "standard" feature industrial contracts in British Columbia. Evidence was introduced showing extent of the provisions as they exist between B.C. Timber and other suppliers of ener power. Indeed, the provision was apparently satisfactory to Cominco and B.C. Timber under the preceding eement. In the current dispute W K PL opposes extending the right of "force majeure" to its industrial customer, the primary reason being to protect u income from a loss of revenue should B.C. Timber finds itself in a position to invoke " ce e "· The loss of revenue is unpredictable and in the event of loss the fixed charges the Utility would have to be recovered from other of service, its shareholders or both. B. C. Timber represents a significant part of WK PL's total load and the problem of edictabi!ity of revenue is therefore compounded.
A complicating factor is the common use in British Columbia of "force majeure" provisions which allow the party claiming a "force majeure" to include factors such as "difficulties with workmen", difficulties" and "lockouts". "Force applicability can make forecasting by utilities related revenues a di t task with uncer Force majeure is also important to industrial customers and indeed any of the industrial customers of WKPL. While the "force majeure" conditions between B.C. Timber and WK PL is on a relatively large , such r ts, while having significant to a smaller industrial customers. concludes that if such r are to be available to a lar rights must extend to other customers. After full consider of the evidence in this hearing Commission in September 1982 the Commission has concluded that it is appropnate that a "force majeure" provision be included in the between WKPL and B.C. Timber. The provision must be red prov equivalent rights to both oarties. The Commission further concludes that industrial customers of WKPL. The clauses which exist in the contract approved by the decis of September r equir em en ts. 3 11 strikes", 11 other labour e " clauses with such broad their industrial and results. as B.C. Timber of impact on WKPL, would be equally The Commission accordingly customer those the findings of tne eement and rights must extended to all 1982, appear to meet these
4 The insertion of these clauses or these rights into the relationship between W KPL and its industrial customers will equire WKPL to forecast the impact of "force majeure" conditions in its market. The Commission concludes that this problem can be resolved by the establishment a "strike adjustment provision" in the forecasting of sales revenue by WK PL in a manner similar to that employed by natural utilities under the jurisdiction of the Commission. 2. Termination W KPL seeks a five-year ter notice which it submits is not inconsistent with the operation of major enterpr as of B.C. Timber. B. C. Timber argues that it is unreasonable to have a term longer than one year, since there are no specific obligations on W K PL in respect of power purchases and the contract for supply from B.C. Hydro expired in March, 1984. The Commission concludes that it is in the best interest of both parties that the terms of service and the contract be stable reasonable periods of time, and that it is not unreasonable that B.C. Timber d be to project power purchases from WKPL on more than a year to year basis. In the present circumstances, however, and in of commitment by WK PL to long-term contracts with B.C. Hydro, other suppl s or to additional generating capacity of its own, the Commission does not agree that :five years is a reasonable term. The Commission accor y concludes that a two-year termination notice is appropriate and will so order. This will provide a degree
5 of certainty to WK PL without unduly prejudicing B.C. Timber's rights to make such adjustments to its power supply as may be in its best interest. The two-year term will allow WKPL to extend lts activity with respect to future sources of supply and the Commission expects that WKPL will take steps to improve its supply position with B.C. Hydro or other sources or through additional generation. Whichever of these alternatives is adopted, it may be appropriate at that time to change this provision to reflect a longer period of notice of termination than two years. 3. Terms and Conditions A dispute exists between WKPL and B.C. Timber related to application of the general terms and conditions of WK PL's filed Tariff in the event the contract is silent on a particular issue. B. C. argued that the contract must be the only document defining the Agreement between the parties and that it was important to the Company's operating mangement responsible for that all requisite terms and conditions be defined in one document. W KPL maintained that it is essen to its filed terms and conditions as a backstop to prevent protracted on a m or over looked element. Neither party could point to a matter that the proposed contract does not cover. The Commission has, in the past, accepted negotiated industrial contracts as the filed tariffs for service. In the current rna tter the Commission can see no detriment to either party in adhering to that practice.
6 The Commission therefore concludes and will so order, that the final Agreement should contain all of the pertinent terms and conditions and that "fall-back" reference to the Applicant's general ff provisions is neither necessary nor appropriate. DATED at the City of Vancouver in the Province of British Columbia, this day of December, 1984.
'::>'' --... u t5KIII~H liULUIVItliA (<)~ " ' ~:! . If?<$ : > v UTILITIES COMMISSION ~Jf 1 z :f! ~ ~;-~g Q:;c.> q ")f~ _.,,"-> ORDER scot-J."'' NUMBER G 81-84 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 an agreement between West Kootenay Power and Light Company, Limited and B.C. Timber Ltd. for the supply of power BEFORE: J.D.V. Newlands, Deputy Chairman; D.B. Kilpatrick, December 19, 1984 Commissioner; and R.J. Ludgate, Commissioner 0 R D E R WHEREAS evidence related to certain contractual matters in dispute between West Kootenay Power and Light Company, Limited ("WKPL") and B.C. Timber Ltd. (now Westar Timber Ltd.) was heard in a public hearing; and WHEREAS the Commission has considered the matters in dispute and issued a Decision dated December 19, 1984. NOW THEREFORE the Commission orders as follows: 1. "Force majeure" provisions are to be included in the Agreement between West Kootenay Power and Light Company, Limited and B.C. Timber Ltd. Such provisions shall be equivalent to those contained in the existing agreement approved by a Decision of the Commission dated September 10, 1982. 2. WKPL must extend such "force majeure" conditions, in principle, to all industrial customers. 3. A two-year termination notice shall be incorporated into the said Agreement, subject to modification under the conditions described in the Decision • . . . /2 TWENTY FIRST fLOOR. 1111 WEST HASTINGS STREET. VANCOUVER BC V6E 2ll. CANADA lELEPHDNE 16041689-1831 TELEX 04·54536
4. The general terms and conditions which apply to the provision of service shall be those set forth in the said Agreement. DATED at the City of Vancouver, in the Province of British Columbia, this 19th day of BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-81-84 2
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.