LETTER NO. L-24-00 ROBERT J. PELLATT SIXTH FLOOR, 900 HOWE STREET, BOX 250 COMMISSION SECRETARY VANCOUVER, B.C. CANADA V6Z 2N3 Commission.Secretary@bcuc.com TELEPHONE: (604) 660-4700 web site: http://www.bcuc.com BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 Log No. 3417 VIA FACSIMILE June 19, 2000 Mr. David M. Masuhara Vice President Legal, Regulatory & Logistics BC Gas Utility Ltd. 24th Floor, 1111 West Georgia Street Vancouver, B.C. V6E 4M4 Dear Mr. Masuhara: Re: BC Gas Utility Ltd. (“BC Gas”, “the Company”) Unbundled Agency, Billing and Collection Transportation Service Tariff ____________for Residential and Commercial Customers___________ Thank you for the report dated June 12, 2000 that BC Gas filed in response to Commission Letter No. L-20-00. The Commission has also received a copy of a letter dated June 9, 2000 from Direct Energy Marketing Limited (“DEML”) and a letter dated June 12, 2000 on behalf of the Consumers' Association of Canada (B.C. Branch) et al. [“CAC(B.C.) et al.”]. DEML stated that agreement on an operational balancing system, which addresses baseload and peak supply (and which appears to involve a load-shaped approach), is needed before it will dedicate the required resources to the development of the computer processes. DEML also identifies a number of issues with the Market Unbundling Group (“MUG”) recommendations related to customer enrolment, mobility, education, billing, and supply contract review where further discussion is needed. CAC(B.C.) et al. continued to support the MUG recommendations and was concerned that unbundling on some other basis may not benefit consumers. In its June report, BC Gas proposed to continue with the initial three-month phase of the unbundling project to refine the MUG business rules and processes and the implementation plans. The Company also requested approval for a deferral account for the $269,000 portion of the first phase work (of the $435,500 total cost) that would be carried out using external resources. The Commission recognizes BC Gas’ willingness to absorb internal staffing costs within existing budgets as an indication of its support of the unbundling process. However, the Commission is concerned that a considerable amount of discussion appears needed to resolve the issues that DEML has raised and, as BC Gas recognizes in the June report, a November 1, 2001 implementation date may no longer be feasible. Moreover, the discussions may result in changes to the unbundling approach set out in the MUG Report which could reduce the long-term value of development work that was based on the June report. In this circumstance, the Commission considers that the prudent action is to accept that unbundling will not be implemented as proposed for November 1, 2001. Significant incremental expenditures should be deferred until a consensus view of the activity is more clearly defined, and BC Gas’ Customer Information System has been implemented. Therefore, the Commission is not prepared to approve the requested deferral account. …/2
LETTER NO. L-24-00 2 In its June report, BC Gas also identifies several outstanding elements and areas of policy where the MUG did not reach consensus, and which need to be dealt with to ensure the market rules present effective customer options. The Commission encourages BC Gas to use its internal resources to continue discussions with DEML and the MUG participants to reach consensus on the unbundling framework to apply in British Columbia. Commission staff will be available to participate in these discussions as needed. BC Gas should also propose specific unbundling initiatives that it can implement using existing internal resources. Meanwhile, the Commission will evaluate its legislative authority to implement necessary consumer protection measures, and will seek any changes that may be needed. The Commission intends to have staff convene a meeting of interested parties in the fall of 2000 to discuss the status of BC Gas’ Customer Information System, the involvement of marketers in the unbundling process, and the interests of customers in availability of an unbundled supply option. BC Gas is requested to file, no later than the end of 2000, a report on its discussions to resolve outstanding issues related to unbundling and the opportunities to implement unbundling for November 1, 2002. At that time, providing there is significant customer interest and the costs appear to be justified, the Commission intends to proceed with unbundling initiatives that appear to be worthwhile. Yours truly, Original signed by: Robert J. Pellatt JBW/mmc Enclosures cc: Mr. John Wallace Director, Business Development Direct Energy Marketing Limited Consumers' Association of Canada (B.C. Branch) et al. c/o of Mr. R.G. Gathercole Executive Director BC Public Interest Advocacy Centre Interested Parties to the ABC Transportation Service Tariff (Lists A and B) BCG/ABC-T Service/DEML-CAC(BC) Issues-L-24
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