LETTER NO. L-22-01 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. 6293, 6398 VIA FACSIMILE July 5, 2001 Mr. Ian Anderson Vice-President, Finance Centra Gas British Columbia Inc. 1675 Douglas Street P.O. Box 3777 Victoria, B.C. V8W 3V3 Dear Mr. Anderson: Re: 1995 Losses-Pacific Coast Energy Corporation (“PCEC”) The Commission has reviewed the June 7, 2001 request by Centra Gas that it acknowledge the amount of PCEC 1995 losses for tax purposes and that these losses will not be used in determining revenue requirements in future rate proceedings. The Commission has reviewed your request, along with the 1995 Vancouver Island Natural Gas Pipeline Agreement (“VINGPA”) and the Province’s audit results dated November 22, 1996 that examined plant additions, cost of service and revenue deficiency for 1995. The Commission notes that funding for revenue deficiencies ended on December 31, 1994 under Section 6.01 of VINGPA and the audit results specified a 1995 annual revenue deficiency for the Centra Distribution System, but did not identify a 1995 annual revenue deficiency for PCEC. Subject to any finding from the Province with regard to the 1995 revenue deficiency of PCEC, the Commission considers that the shareholder is responsible for losses incurred by PCEC in 1995. The tax benefit realized from the application of 1995 tax losses will not be used in the determination of subsequent period revenue requirements to the extent such tax loss was the responsibility of the shareholder. Yours truly, Original signed by: Robert J. Pellatt cms cc: Ms. Karen Koncohrada Director, Minerals, Oil and Gas Branch Ministry of Energy and Mines CG/Cor/PCEC 1995 Losses
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