LETTER No. L-72-97 SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. CANADA V6Z 2N3 TELEPHONE: (604) 660-4700 ROBERT J. PELLATT BC TOLL FREE: 1-800-663-1385 COMMISSION SECRETARY FACSIMILE: (604) 660-1102 VIA FACSIMILE November 28, 1997 Mr. Rick Dowling Assistant Business Manager International Brotherhood of Electrical Workers Local 213 4220 Norland Avenue Burnaby, B.C. V5G3X2 Dear Mr. Dowling: Re: BC Gas Utility Ltd. Changes to BC Gas Customer Services Policies Your letter of November 10, 1997 expresses concern that changes to BC Gas customer services policies will adversely affect your members and requests that the Commission respond. In particular, you express concern regarding the recent introduction of a fee for non-emergency burner tip service by the utility. As you have been informed, the Commission believes that such a change is in the best interest of ratepayers and conforms to the Commission's recent Retail Markets Downstream of the Utility Meter ("RMDM") Guidelines. In your letter, you ask five specific questions to which you have requested an answer. Your questions and the Commission's answers follow below. 1 . Has the Commission been informed that approximately thirty (30) gas servicemen's jobs will be eliminated from the utility because of 'stranded' employees who will no longer be peiforming this service? Commission staff and representatives from the utility met earlier in the fall to discuss this Application. At that time, Commission staff were informed that the introduction of a fee for burner tip service was likely to result in a reduction of the number of gas servicemen positions if customers opt for appliance service from independent contractors. This information was given to .. .12
2 the Commissioners at the time of their deliberations with regard to the Application. BC Gas has said that it will evaluate the required staffing levels after the new pricing has been in place for some time and that any downsizing will be minimized by employee retirement packages and attrition. 2. Is the BCVC in agreement with the BC Gas position on transitioning all burner tip service work out of the utility? As indicated in the RMDM Guidelines, with the exception of those burner tip services necessary to ensure the safe operation of the system, the Commission believes that those burner tip services which can be provided equally well by the competitive market should be provided by the competitive market. This position derives from the Commission's mandate which is to ensure that natural monopoly services are provided at rates which are fair, just, and reasonable. In the Commission's view, where services can be provided equally well through a fully functioning competitive market, it is no longer appropriate to provide them on a regulated tariff basis. Accordingly, the Commission expects to be in agreement with the BC Gas position on transitioning burner tip service work out of the utility in an orderly fashion, if ratepayers choose competitive suppliers in preference to a fully costed utility service. This will not be known until the fee for service program has been in operation for some time. However, the Commission has concluded that these services should no longer be paid for out of general revenue requirements but rather these services should be paid for by those ratepayers taking advantage of the service. 3. If the BCVC allowed this work to remain in the utility on a fee for service basis, would the Commission approve a profit sharing mechanism between the gas customers and the BC Gas shareholders in recognition of using integrated manpower resources? The RMDM Guidelines clearly indicate that where utility facilities or services are used in the provision of a non-regulated business, the fee to be paid for the facilities or services must fully recover all costs. In addition, it has generally been Commission policy that these fees accrue entirely to the ratepayer. 4. Following the cancellation of the BC Gas Furnace Repair Plan by the Commission, BC Gas was ordered to advertise the current burner tip service policy. Why was this order not enforced and why is the transitional fee for service proposition not being advertised? Please find enclosed a copy of a brochure produced at the time of the cancellation of the BC Gas Furnace Repair Plan which shows that the order to advertise the current policy was carried out. With respect to your suggestion that the recent change in policy be announced prior to its implementation, the Commission is concerned that advertising the fee changes in advance would encourage consumers to take inappropriate advantage of the existing non-fee service. . . ./3
3 5. In the "Retail Markets Downstream of the Meter" BCUC Guidelines, there are several references to customer choice. Does the Commission feel that customers, who wish to continue with burner tip service being provided by the utility, are being properly informed of their choices now that BC Gas has decided to eliminate this workfrom the Utility Operations? In Section 5.0 of the RMDM Guidelines, the Commission clearly states that, based on the legal opinion sought by staff, the intervention of numerous other parties and its own deliberations, it has come to the conclusion that its mandate under the legislation as currently written is limited to the protection of ratepayers. Although the earlier Commission staff discussion paper suggested customer choice as an objective to be used by the Commission in making decisions in this area, based on the above, the Commission did not include this as an objective in the Guidelines. With respect to your specific question, the Commission believes that BC Gas' proposed strategy of indicating to those customers requesting non-emergency service that a fee is being attached and that the customer may wish to employ an outside contractor is appropriate. BC Gas is to respond to emergency situations immediately. The Commission recognizes that the transitioning of this type of service outside the utility will have impacts on BC Gas employees. Further, the Commission will emphasize to BC Gas the necessity of undertaking the changes in a manner which reduces the impacts on employees to the greatest extent possible, consistent with the Commission's overall mandate to protect the interests of ratepayers. Yours truly, DWFlcms Enclosures cc: The Honourable Andrew Petter Minister of Finance Mr. Ron Jupp, Senior Vice President BC Gas Utility Ltd. BCG/Cor/IBEW#23&BumerTipSvce
4220 NORLAND AVENUE, BURNABY, B.C. V5G 3X2 • FAX (604) 294-1538 • TELEPHONE: (604) 294-2361 ES COMM!SSION i ',,- '.A ACKNOWLEDGED I November 10,1997 I . 3 1997 ) B.C. Utilities Commission I .. ~1 , r' vi<':'ll, .. t..;,t'ONSE ! Box 250 I ...~ RESOURCE ROOM /}0 j 6th Floor _9 00 Howe Street' .... INFO. TO BE FILW ........ Ck===-r Vancouver, B.C. V6Z 2N3 Attention: Mr. Robert Pellatt Commission Secretary Dear Sirs/Mesdames: Our Union represents all of the physical and trades employees who work for BC Gas. Recently the Company has announced some very serious changes in its Customer Services policies which will adversely effect our members. For the past forty years BC Gas customers in the Lower Mainland (from Horseshoe Bay to Hope) have been provided with "burner tip service" as part of their natural gas rate structure. We have been informed that the B.C.U.C., agreeing with interveners, and BC Gas, has decided that this service can no longer be provided under the present cost recovery method, and in the short term can only be continued on a fee for service basis. This would be a transitional approach to eliminating the service work from Utility Operations. Meanwhile, customers are not being informed of the current services avaiiable nor the fee for service policy; they will only be informed if and when they call for service. We therefore submit the following questions for your response: 1. Has the Commission been informed that approximately thirty (30) gas servicemen's jobs will be eliminated from the utility because of ·stranded" employees who will no longer be performing this service? 2. Is the B.C.U.C. in agreement with the BC Gas position on transitioning all burner tip service work out of the utility?
Mr. Robert Pellatt, BC Utilities Commission Re: BC Gas Customer Services policies November 10, 1997 Page 2 3. If the B.C.U.C. allowed this work to remain in the utility on a fee for services basis, would the Commission approve a profit sharing mechanism between the gas customers and the BC Gas share holders in recognition of using integrated manpower resources? 4. Following the cancellation of the BC Gas Furnace Repair Plan by the CommisSion, BC Gas was ordered to advertise the current burner tip service policy. Why was this order not enforced and why is the transitional fee for service proposition not being advertised? 5. In the "Retail Markets Downstream of the Meter" - B.C.U.C. Guidelines there are several references to customer choice. Does the Commission feel that customers who wish to continue with burner tip service being provided by the utility are being properly informed of their choices, now that BC Gas has decided to eliminate this work from the Utility Operations? In conclusion, we sincerely believe that gas customers would support a quality service plan within the utility, if they were given the necessary information in order to make their choice. By denying them this opportunity, and turning over all of this work to non-regulated contractors we feel that the Commission is not following its own guidelines. We respectfully submit that these questions require immediate response. Our members livelihoods are in jeopardy. Yours sincerely, , -"~ ~:.~;,.. Rick Dowlin( Assistant Business Manager RD/tp oteu - 15 d_pelat314 c.c. Honourable Andrew Petter Minister of Finance, Energy Mr. Ron Jupp, Senior Vice President BCGas Local 213, I.B.E.W. Executive
''----"' Fee for Service: Coaches Notes This document will give a~a managers enough background on the Operational Efficiency (OE) to be able to explain the implementation plans to employees. It : is not intended to be copied and handed our to employees. It is not intended to explain the operational details of the new processes, or how many employees will be given lay-off notice, and when. Area managers will !-Ise this information to explain the OE to their people in their ~wn words. Managers will use the Q&A sheet on the oe as supplementary information to answer 5pecmc questions that are anticipated. Key Meaaages : fee for service is all about a change in direction: in the long run, the Regulated Utility will not be providing burner tip service. Fee for &eNlce Is a transition step toward the Interior seevice policy. The duration of this transition period will be detennined by the customer. Even if we are able to lower the cost of providing this service, and customers demand it; the regulated utility will not be providing ,~ competitive services in the long run. We are transitioning out of burner tip service: What is Fee for Service? • Beginning in early 199B. Be Gas will be charging Coastal customers for the non--emergency bumer tip service which is deli'verad by utility employees • This service will not be offered in the In1~rior Why are we making this change? • acuc and Be Gas have 2 objectivee in mind: have customers who receive a service pay for that service, and move competitive services out of the regUlated monopoly· • a "competitive service" is any service that can be purchased in the competitive marketplace; and burner tip service/appliance diagnostics can "-"
certainly be purchased from a number of HVAC contractors \~ • in moving non-emergency burner tip service out of regulation, the commission and Be Gas had a choice: A) stop offenng the service, effective immediately, and go to the Intenor seN ice policy today, or B} attach a price to the service to cover the current delivety cost • because many L.ower Mainland customers have come to expect this service aver the years, we have chasen the seconcJ alternative: fee for service • we will offer the customer a choice, and let the customer decide whether or not to buy it from Be Gas Utility • user pay is not new; the utility has been mOVing in this direction in recent years. Other examples include: • 8elVice connection charge: increased froin $10 to $300, and willlikel'! go to actual cost (even higher) in future • basIc monthly fee: increased from $3 to $8 per month • charge for unlocking meter after non-payment: $55 fee to cover costs "'--../ • we are not trying to grow a competitive repair service within tile utility; we are simply recovering the cost of providing a service that we have traditionally offered • . the regulated utilrty is transffioning out of delivering competitive services: even if we cculd lower our CDsts tor burner tip service, the regulator will not let us offer thJs service in the long run • we simply want to &end customers a signal that they must pay for non-emergency services from the utility, just as they would pay fot services from a contractor • we will continue to respond to "emergent- and "urgenr calls just as we do today .--..
,,-,. How wiU service charges work? • customer caUs in to report an appliance problem • service center rep screens caU to determine if it is an emergency ot a non· emergency , . • if it is not an emergencYI then rep explains choices; Be Gas will make a service call and charge I or the customer can call a contractor • this is not a furnace repair service or a maintenance service: we will not offer to complete the repair job, rep/ace parts, or install houseJine for fee, even If . requested by the oustomer. Repairs and parts installation are competitive services that the regulated utility will not offer in the long run. • rf we cannot resolve the problem, then we refer customer to' contractor; no charge for the call How will this affect me? \,--" • apart from some procedural changes that are required for processing charge$, you will continue to pertonn service calls just as you do today • we expect layoffs to occur as a result of service charges; some customers WIll chose to hire a contractor instead of Be Gas and this will result in fewer service calls • number of layoffs and timing are yet to be determined '-.......,/'
24-Hour t:mer~en:-" '_=:;: lower Mainland 298-1400 Be GAS Abbotsford, Clearbrook, Aldergrove/ Clayburn, Huntingdon/Matsqui, Mission/ Mt. Lehman, Whonnock Chilliwack, Cultus Lake, Rosedale/ _ 1.800.663.9911 Sardis, Yarrow Agassiz/Harrison Hope/Kent i::nergy US,,- Inr:;;;,;~·:=.:~" .. Inc FOR ADVICE ON NATURAL GAS EQUIPMENT Lower Mainland 293-8888 Areas east of Abbotsford/Mission 1-800-561-4GAS Call BerorE. 'rOU [J:' TO LOCATE UNDERGROUND PIPE LOCATIONS Greater Vancouver 293-8554 Delta, langley, Surrey, White Rock 576-7069 Maple Ridge, Pitt Meadows, Ladner, Tsawwassen 525·0184 Chilliwack 792-8936 Abbotsford/Matsqui, Aldergrove, Mission 853-0971 Agassiz, Harrison, Kent 796-9685 Hope 869-7523 hlr ,1 tnT lOr\ or Hili "j :/', [he BC C;,[,> (;lllue [() ErH:ri':Y Conserv<!(loll. call 2<) ~-SHSS ()r [()li-trtT I-K()()- 'i(' 1--lGAS, (!; ..... BCGas ~.' \ ~::: .. " ... ' ... " ... ' .. _' : -;- , '\;. ,'\. .. _;. "' BCGas\ ! ",:. . :j7~h, Il-ql@
A s a valued BC Gas cusromer. we wam vou [() be aware or" key services that are provided b\ BC Gas at no additional chan.~e to YOU, These ser,'lces mclude: ,Gasileaks;andemecgeacies.". Be Gas will mVeStll~ate am' rtron or" an odour, P.1S leak or anv other call that lfldlCates a roremlalh danperou;, conditIOn mvolvlfl,!.: natural gas. BC G.1'> .1dds small Jmounrs or an ociourant (() the narurai ,uas to ,ulve It Its dlsnnctlve smell or sulphur <Jr (orten egg:, ThiS smell allows qUick derecrlOn of .1 rosslble rroblem With auas plpmg S\"item If vou smell natLIral ,uas, Lall BC ar ont (;.15 ot the emeruenu' numbers Iisred on rhe back oj rhlS brochure d{ft-h h1H' fJT'!t. i Be Gas will rrovlde dragnos(J( '>ervlce when narural gas arrirances are maltuncclonrnp. Dunnp rhls servlct VISI(, the Be (;.15 rc'presema(lvt ma\' make mmor .1dlustments ()r ren.urs It no parts are reqUlrtd, Malor rtralrs are rhe resronslbdlt\' or" the (usromer anci should bt pertormed hv a licensed gas tItter t;, Ii, ;;;}j gaRD mom hi I"y :r" t.t-From (Jme to time. BC Gas must rerrorm IOspeCTlOns and mamtenance on compam'-ownell equipment. mcludmg meter replacements. (() meer go\'(:,rnment reqUlrements. F'l"!~ BC llas IS pleased to proVide ;lcivICl' Oil the :,eleC(lOIl. operanon and mamtenance or n.1tuLll uas .Iprilarlu:,s, Call the Ener,uv Lse Intorma[Joil Lnt .lC rill' number on the reverse ror aSSiStance, The BC Gas Call Before Jim Die program IS .Ivadable to help homeo'.vners and conuacwrs locate U;IS service lines before dOlnu all\' lOnstructlOn or landscaprnu, Cu:,wmer, .1rl' (l'qUireu bv law to call BC (j.l' .lnd (lOtall) .1 U)1'1 of pians (() IlldlCltC' [Ilt: 1()(,I(JOIl {)I underuround Plpe\. F.lIiurc [{) lll! so could rcsu i [ I n a '.Hl'[\ li.lLard, rnterruptlon or serylCl' arll! cost! v ciamagt:. ''='Jr--.r--
tiff ;1 IN THE MATTER OF the Utilities Commission Act S.B.C. 1980, c. 60, as amended and IN THE MATTER OF a Review of the Be Gas Utility Ltd. Furnace Repair Plan DECISION September 17, 1993 BEFORE: Lorna Barr, Deputy Chair and Chair of the Division Kenneth Hall, Commissioner Katherine "'ellman, Commissioner
I W ~ 27 7.0 COMMISSION DETERMINATIONS In reviewing the FRP and the Inquiry Report, the Commission has focused on the level of compliance with Order No. G-47-91 and the accompanying Reasons for Decision. On the basis of the evidence presented, the Commission makes the following determinations: 1 . Independent customer surveys and other evidence presented at the hearing demonstrated that customers are interested in protecting themselves against unexpected furnace repair expenses through the purchase of insurance. In the Reasons for Decision attached to the 1991 Order, the Commission considered that such plans are a matter of improved quality of service and customer convenience rather than a critical service. The Commission is still of this view. -, In the same Reasons for Decision the Commission expressed the belief that safety and insurance considerations need not necessarily be linked in the same program. The Commission reiterates that safety is a primary concern and periodic inspections of gas appliances are desirable to ensure safe and efficient performance. 3. The Commission fmds that BCGUL has not complied with the direction in the 1991 Reasons for Decision, in that there was to be a full allocation of overheads to the FRP and stand-alone accounting. The Commission also recognizes that there is some duplication in service between the FRP and BCGUL's emergency service program and that the costs are not being allocated appropriately. FRP losses incurred will result in a cross-subsidization from utility rates if the Commission allows the losses to be recovered in revenue requirements. 4. The Commission finds that BCGUL did comply with the direction in the 1991 Reasons for Decision to include the Association telephone number in promotional material on the FRP. However, not all of the promotional material was submitted to the Commission as required. S. The Commission finds that all gas customers are not adequately informed about BCGUL's emergency services. The Commission directs BCGUL to provide information about its Safety and Diagnostic Services to all of its customers. 6. The Commission finds that there is interest in a furnace pans insurance plan and that it is in the interest of the consumer to have such an option available. However, the Commission finds that the BCOUL Plan has not adequately met many of the directions in the 1991 Reasons for Decision
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.