G-13-95 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 BC TOLL FREE: 1-800-663-1385 CANADA FACSIMILE: (604) 660-1102 AN ORDER IN THE MATIER OF the Utilities Commission Act, S.B.C. 1980, c. 60, as amended and An Application by Centra Gas British Columbia Inc. - Fort St. John District for Approval of Deferral Account Treatment of Costs for the Be 21 Power Smart Program BEFORE: M.K. Jaccard, Chairperson; and ) K.L. Hall, Commissioner ) January 19, 1995 ORDER WHEREAS: A. On January 6, 1995 Centra Gas British Columbia - Fort St. John ("Centra GasH) applied to the Commission for approval of deferral account treatment of costs, including interest and inclusion in rate base in 1996, associated with its participation in the joint provincial government/utility residential energy conservation program referred to as the BC 21 Power Smart Program ("the Program H); and B. Centra Gas has estimated that its cost of participation in the Program will be approximately $30,000 and this amount will be recovered in rates through rate base treatment; and C. The Program will be available to approximately 450 Centra Gas residential customers with energy saving initiatives such as walk-through energy audits, low-flow shower heads and faucet aerators, flow-reduction devices for toilets, hot water tank insulation wraps, draft-proofing and weather-stripping, and will be in place commencing January 1, 1995 and will end June 30, 1996; and D. The Commission has considered the Application and is satisfied that approval is necessary and in the public interest. NOW THEREFORE the Commission orders as follows: The Commission approves for Centra Gas, deferral account treatment for the spending of $30,000 of costs for its participation in the BC 21 Power Smart Program, commencing January 1, 1995. The Commission's Reasons for Decision are attached as Appendix A. DATED at the City of Vancouver, in the Province of British Columbia, this day of January, 1995 BY ORDER Dr. Mark K. Jaccard Chairperson Attachment Orders/CG-DfrlAcct-BC21
Appendix A to Order No. G·13·95 BRITISH COLUMBIA UTILITIES COMMISSION Reasons for Decision The Commission has reviewed and, in the Order accompanying these Reasons, approves the Centra Gas British Columbia - Fort St. John District ("Centra Gas") expenditure of $30,000 and deferral account treatment for its participation in the BC 21 Power Smart Program (ttthe Program") in conjunction with the nrC)ViIlci:al gIJ\,t~.rrlll1~Ilt ~aInlqd other utilities. The Commission's reasons for of the are twofold: First, Centra Gas has analyzed the impact of its participation in the BC 21 Power Smart Program on the total costs of the utility and on the impact on rates. The analysis indicates that the benefits of the Program will exceed the utility's costs by a significant margin and could result in a reduction in rates. Second, these rate and bill impacts exclude any environmental benefits that will be achieved due to the reductions in energy and water use. As utilities have more aggressively begun to promote Demand-Side Management programs that may include both energy efficiency and fuel-switching programs, a key issue for the Commission has been how to incorporate the environmental and other social costs into the resource evaluation and selection procedure of utilities so that the socially optimal mix of energy resources and energy services is selected and delivered to ratepayers. In other words, if utilities are going to provide least-cost energy services to consumers, how are the utilities and the Commission going to assess the social and environmental costs to ensure that all costs - financial and otherwise - are incorporated into the decision-making processes? While attempting to ensure that social costs are included, the Commission has been aware that the utilities it regulates provide only a portion of the energy services delivered in British Columbia, and that moving too aggressively to include such costs could also serve to distort energy markets. Moreover, estimates of environmental and social costs and benefits are based on societal values which the Commission cannot unreasonably impose on society, although it may attempt to incorporate into decision-making such values or estimates as it comfortably feels are reasonable. Therefore, the Commission looks, where possible, to policy statements or other signals from government to reassure itself that the degree of importance it puts on social and environmental values for resource allocation and energy service delivery is reasonable. In this instance, the Commission interprets the government contribution to the BC 21 Power Smart Program to reflect the level of the provincial government's support for the environmental and other social benefits of this program, and it is in this context that the Commission approves the Centra Gas Application as in the public interest. Orders/CG-DfrlAcct-BC21
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