LETTER NO. L-9-04 SIXTH FLOOR, 900 HOWE STREET, BOX 250 ROBERT J. PELLATT VANCOUVER, B.C. CANADA V6Z 2N3 COMMISSION SECRETARY TELEPHONE: (604) 660-4700 Commission.Secretary@bcuc.com BC TOLL FREE: 1-800-663-1385 web site: http://www.bcuc.com FACSIMILE: (604) 660-1102 Log No. 5031 VIA FACSIMILE 1-866-352-5953 February 16, 2004 Mr. George Isherwood Regulatory Affairs Executive Aquila Networks Canada (British Columbia) Ltd. 1290 Esplanade PO Box 130 Trail B.C. V1R 4l4 Dear Mr. Isherwood Re: Aquila Networks Canada (BC) Ltd. Supply Reinforcement in the South Okanagan Final Estimates and Incentive Mechanism Filing This is in response to Aquila’s filing of final cost estimates and proposed Cost Containment Mechanism pursuant to Commission Order No. C-3-03. The Commission accepts Aquila’s final cost estimates of January 14, 2004 as a basis for cost control for the South Okanagan Supply Reinforcement Project as defined in Order No. C-3-03. Please file the detailed breakdown to the January 14, 2004 final cost estimates by Friday, March 5, 2004. With regard to the Cost Containment Mechanism as proposed in the January 14, 2004 filing, the Commission does not approve this mechanism. The Commission believes that the best interests of ratepayers are better served by a stringent cost control and project management regime subject to prudence reviews, rather than the cost containment mechanism as proposed. Yours truly, Original signed by: Robert J. Pellatt RWR/yl cc: Registered Intervenors/Interested Parties Aquila/Cor/SOK Reinforcmnt Final Cost Ests
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