LETTER NO. L-50-04 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. 7108 VIA E-MAIL October 1, 2004 regulatory.affairs@terasengas.com Mr. Scott A. Thomson Vice President, Finance & Regulatory Affairs Terasen Gas Inc. 16705 Fraser Highway Surrey, B.C. V3C 2X7 Dear Mr. Thomson: Re: Terasen Gas Inc. (“Terasen Gas” or the “Company”) Coastal Facilities Project – Variable Interest Entity Application On August 16, 2004, Terasen Gas Inc. applied to the Commission for approval to adopt a new accounting guideline AcG-15 for Consolidation of Variable Interest Entities, effective January 1, 2005. By adopting this new guideline, TGI would effectively transfer the Coastal Facilities Assets of $50.3 million under a Synthetic Lease to rate base. The Application outlined the impact of this accounting change would be an additional $1.053 million to the 2005 revenue requirement for TGI. The Commission has reviewed this Application and the appropriate accounting treatment under AcG-15 and has determined that deferral of this Application to Terasen Gas’ annual review in November 2004 would be in the best interest of the ratepayers given the significant impact of the cost to be recovered. In accordance with Order No. G-51-03, which included a “no surprise” term to ensure that any significant changes or restructuring at the utility will have been discussed with interested parties in order to reduce the risk of undesirable outcomes, TGI shall provide in the annual review material the financial impact to the ratepayers and shareholders for the following three scenarios if: • AcG-15 is adopted, • AcG-15 is not adopted, or • Variance from GAAP is ordered for regulatory purposes. These scenarios will enable the interested parties to review the impact and provide opportunities to evaluate mitigating options for adopting this new accounting treatment. Yours truly, Original signed by: Robert J. Pellatt RJP/cms cc: Intervenors/Interested Parties to 2003 Annual Review TGI/Cor/Coastal Facilities Variable Interest
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.