B R I T IS H C O L U M B I A U T I L IT IE S C O M M I S S I O N O R D E R N U M B E R G-69-01 SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. V6Z 2N3 CANADA TELEPHONE: (604) 660-4700 web site: http://www.bcuc.com BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 and A Complaint filed by Sumas Energy 2, Inc. Regarding the Wholesale Transmission Service Tariff of British Columbia Hydro and Power Authority BEFORE: P. Ostergaard, Chair ) P.G. Bradley, Commissioner ) B.L. Clemenhagen, Commissioner ) R.D. Deane, Commissioner ) June 28, 2001 K.L. Hall, Commissioner ) N.F. Nicholls, Commissioner ) O R D E R WHEREAS: A. Sumas Energy 2, Inc. (“SE2I”) filed a complaint with the Commission on October 23, 2000, regarding the rates and terms and conditions of the British Columbia Hydro and Power Authority (“B.C. Hydro”) Wholesale Transmission Service Tariff Supplement No. 30 (“WTS Tariff”) and associated rate schedules; and B. After receiving comments from both parties, the Commission issued Order No. G-121-00 on December 20, 2000, which directed B.C. Hydro to: (i) reinstate SE2I in the appropriate reservations queue as of October 23, 2000 for long-term firm point-to-point transmission service pending a resolution of the SE2I complaint; (ii) discuss with SE2I an appropriate rate and terms of service for a location specific point-to-point transmission service based on a formula or principles that could be applied in a non-discriminatory manner and which might be used by other generators or customers requesting locational specific rates; (iii) submit, on or before March 30, 2001, a proposed rate and terms of service, or B.C. Hydro and SE2I may file position papers on the form of rate and terms of service they deem to be appropriate; and …/2
B R IT I S H C O L U M B I A U T I L IT I E S C O M M IS S I O N O R D E R N U M B E R G-69-01 2 C. On March 30, 2001, B.C. Hydro and SE2I filed separate reports pursuant to Order No. G-121-00, which were reviewed by the Commission; and D. B.C. Hydro’s response of March 30 2001, sought the Commission’s approval to remove SE2I’s Open Access Same Time Information System (“OASIS”) Request No. 343571 from the reservation priority queue; and E. B.C. Hydro and SE2I responded to Staff Information Requests regarding B.C. Hydro’s request to remove SE2I from the queue on May 25 and May 28, 2001, respectively; and F. The Commission has reviewed B.C. Hydro’s request and the evidence and information submitted; and G. The Commission will review the WTS Tariff following the finalization of a regional transmission organization structure. NOW THEREFORE the Commission orders as follows: 1. SE2I’s complaint is dismissed, as set out in the Commission’s Reasons for Decision, attached as Appendix A. 2. B.C. Hydro is to provide 30-days notice to SE2I prior to removing SE2I’s OASIS Request No. 343571 from the reservation priority queue. During this time SE2I will be allowed to comply with the terms and conditions of the WTS Tariff. DATED at the City of Vancouver, in the Province of British Columbia, this 24 th day of July 2001. BY ORDER Original signed by: Peter Ostergaard Chair Attachment Orders/BCH-SE2I WTS Complaint
APPENDIX A to Order No. G-69-01 Page 1 of 3 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 CANADA BC TOLL FREE: 1-800-663-1385 web site: http://www.bcuc.com FACSIMILE: (604) 660-1102 Sumas Energy 2, Inc. Complaint regarding British Columbia Hydro and Power Authority’s Wholesale Transmission Service Tariff Supplement No. 30 REASONS FOR DECISION On October 23, 2000 Sumas Energy 2, Inc. (“SE2I”) complained that B.C. Hydro’s Wholesale Transmission Service Tariff Supplement No. 30 (“WTS Tariff”) and associated rate schedules are unreasonable for its particular circumstances and that B.C. Hydro’s proposed application of the WTS Tariff regarding the terms and conditions of the Service Agreement (“the proposed Service Agreement”) is unreasonable. SE2I requested that the Commission set down a process for the resolution of its complaint. B.C. Hydro replied to this complaint on November 10, 2001 and argued that it was applying the WTS Tariff correctly and any amendments to the Service Agreement would be improperly discriminatory at the expense of other customers. In rebuttal comments on November 30, 2000 to B.C. Hydro’s response, SE2I argued that it believed B.C. Hydro had the ability under the WTS Tariff to implement the tariff in a manner that ensured a commercially practical solution. SE2I also stated that it did not believe B.C. Hydro had followed the tariff correctly in some instances. However, SE2I did not provide specific examples and reiterated that SE2I was requesting the Commission require B.C. Hydro to implement the WTS tariff in a commercially practical manner and that the tariff be amended to create a rate for location specific applications. This letter also requested that the Commission reinstate SE2I in the reservations priority queue pending resolution of the complaint and suggested a process, which would lead to a public hearing, on the structure of the WTS Tariff. The Commission responded to these comments and requests by issuing Order No. G-121-00 to establish a process to try to resolve this complaint. Order No. G-121-00 required that B.C. Hydro: (i) reinstate SE2I in the appropriate reservations queue as of October 23, 2000 for long-term firm point-to-point transmission service pending a resolution of the SE2I complaint;
APPENDIX A to Order No. G-69-01 Page 2 of 3 (ii) discuss with SE2I an appropriate rate and terms of service for a location specific point-to-point transmission service based on a formula or principles that could be applied in a non-discriminatory manner and which might be used by other generators or customers requesting locational specific rates; (iii) submit, on or before March 30, 2001, a proposed rate and terms of service, or B.C. Hydro and SE2I may file position papers on the form of rate and terms of service. On March 30, 2001 both parties filed responses which reiterated their previous positions. B.C. Hydro, in its response of March 30, 2001, also applied to the Commission to remove SE2I’s Open Access Same Time Information System (“OASIS”) Request No. 343571 from the reservation priority queue. B.C. Hydro argued that continued placement of SE2I in the queue without a security deposit created uncertainty for other WTS customers and placed an unacceptable risk on B.C. Hydro and its ratepayers. B.C. Hydro further argued that SE2I’s position in the queue without an executed service agreement or security deposit is in violation of the WTS Tariff. The existing WTS Tariff was approved in 1998 following an oral public hearing. In Section 4.2 of its 1998 Wholesale Transmission Services Decision, the Commission recognized an underlying theme of that hearing, namely the potential benefits to be achieved if the terms and conditions of B.C. Hydro’s WTS Tariff were consistent with those in neighboring jurisdictions, including the Pacific Northwest states and Alberta. At present, efforts to achieve interjurisdictional consistency are focussed on the development of the Western Regional Transmission Organization (“RTO-West”). As RTO-West or a similar regional transmission organization comes to fruition, B.C. Hydro’s WTS Tariff will be reviewed and may be amended for alignment with the scheduling, congestion management, access, pricing, and other practices of the new transmission organization. SE2I’s requested amendments to the WTS Tariff may change revenue requirement allocations to other users and call into question the current rate design methods approved in the 1998 Wholesale Transmission Services Decision. Therefore, they are best examined in the Commission’s review of the WTS Tariff following the finalization of the structure of a regional transmission organization. At that time, British Columbia utilities’ participation in the transmission organization and suggested changes to the WTS Tariff (including rate design, scheduling, pricing, and access issues) will be considered. The Commission has determined that it is not prudent to make major amendments to the WTS Tariff at this time, as information required to thoroughly review SE2I’s and other possible amendments to the WTS Tariff will not be available until the transmission organization structure is finalized.
APPENDIX A to Order No. G-69-01 Page 3 of 3 The Commission determines that SE2I’s complaint should be dismissed and if, in the future, SE2I wishes to request changes to the WTS Tariff, it may do so in the context of the WTS Tariff review associated with the implementation of a regional transmission organization. The Commission has also determined that B.C. Hydro has not violated the terms and conditions of the WTS Tariff regarding the execution or filing of the proposed Service Agreement with SE2I, and has therefore concluded that SE2I’s continuing position in the OASIS queue without a Service Agreement and security deposit would violate the WTS Tariff. The Commission notes that Section 19.4 of Tariff Supplement No. 30 requires that the Transmission Customer shall provide the Transmission Provider with a letter of credit or other reasonable form of security acceptable to the Transmission Provider equivalent to the costs of new facilities or upgrades consistent with commercial practices as established under the laws of Canada and the Province of British Columbia. It further provides that the Transmission Customer shall have thirty (30) days to execute a Service Agreement or request the filing of an unexecuted Service Agreement and provide the required letter of credit or other form of security, or the request will no longer be a Completed Application and shall be deemed terminated and withdrawn. The Commission concludes that SE2I must comply with the terms and conditions of the WTS Tariff in order to maintain its position in the reservations priority queue for firm transmission service. The Commission therefore orders B.C. Hydro to give 30-days notice to SE2I, during which time SE2I will be allowed to comply with the terms and conditions of the WTS Tariff including the requirements to either execute a Service Agreement or request the filing of an unexecuted Service Agreement, and to provide the required letter of credit or other form of security. If SE2I does not comply with the terms and conditions of the WTS Tariff, B.C. Hydro may remove SE2I’s OASIS Request No. 343571 from the reservation priority queue.
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