Orders

BR I T I S H CO L U M B I A UT I L I T I E S COM M I S S I ON OR D E R NU M B E R G -60-05 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 IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 and An application by British Columbia Transmission Corporation for Approval of its F2006 Revenue Requirement Application BEFORE: L.A. Boychuk, Panel Chair and Commissioner June 23, 2005 L.A. O’Hara, Commissioner R.W. Whitehead, Commissioner O R D E R WHEREAS: A. On December 23, 2004, British Columbia Transmission Corporation (“BCTC”) filed for approval of its F2006 Revenue Requirements Application (“the Application”) and rates effective April 1, 2005 pursuant to sections 58 and 60 of the Utilities Commission Act (“the Act”). For F2006, BCTC applied for interim rates based on the forecast Deemed Equity Component as of April 1, 2005. After April 1, 2005 and determination of the actual Deemed Equity Component, BCTC requested for permanent rates for F2006 based on the actual April 1, 2005 Deemed Equity Component; and B. BCTC also requested approval of its depreciation accounts and rates of depreciation, pursuant to Section 56 of the Act; and C. By Order No. G-8-05, the Commission established a Pre-Hearing Conference (“PHC”), rescheduled by Order No. G-17-05, to be held on Thursday, March 3, 2005 to identify principal issues and address procedural matters related to process options for review of the Application; and D. On February 15, 2005, BCTC filed for Approval of a temporary Open Access Transmission Tariff (“OATT”) Terms and Conditions of Service as well as rates for certain Ancillary Services pursuant to sections 60 and 61 of the Act. This filing would effectively roll over the terms and conditions contained in BC Hydro’s current Electric Tariff Supplement 30 – the WTS Tariff (“WTS Roll Over Tariff Application”); and E. On March 2, 2005, BCTC filed its Evidentiary Update with a reduction to the Total Transmission Revenue Requirement (“TRR”) of $2.6 million, a reduction of $6.9 million to the Network Integrated Transmission Service charge, and a forecast increase in revenues from Point-to-Point (“PTP”) and Ancillary Services of $4.3 million. On March 9, 2005 BCTC filed revised rate schedules resulting from the Evidentiary Update (“Revised Rate Schedules”); and F. On March 8, 2005, following the PHC, the Commission, by Order No. G-25-05, established an Issues List and a regulatory timetable for a Negotiated Settlement Process (“NSP”) to review the Application and …/2

BR I T I S H CO L U M B I A UT I L I T I E S COM M I S S I ON OR D E R NU M B E R G-60-05 2 approved the WTS Roll Over Tariff Application along with Revised Rate Schedules on an interim refundable basis effective April 1, 2005; and G. The Negotiated Settlement discussions were held on May 25 and 26, 2005 and a proposed Settlement Agreement regarding the Application was agreed to by BCTC and Intervenors who participated in the discussions; and H. The Negotiated Settlement agreed to by the parties was provided to the Commission and circulated to all Intervenors on June 14, 2005, seeking comment from non-participants by June 21, 2005; and I. A non-participant provided a Letter of Comment on the Negotiated Settlement which did not oppose the settlement; and J. The Commission has reviewed the Negotiated Settlement, including the Final Issues List and letters of support filed by participants in the NSP and Letter of Comment of the non-participant and considers that approval of the Negotiated Settlement is in the public interest; and K. The Commission notes the higher than anticipated Deemed Equity Component resulting from the application of Special Direction No. 9 and BCTC’s undertaking to seek determinations from its Board and Shareholder on whether Special Direction No. 9 should be adjusted. NOW THEREFORE the Commission orders as follows: 1. The Commission approves for BCTC the Negotiated Settlement, attached as Appendix 1 to this Order, the Terms of Settlement along with Tables 2B-1, 2B-2, 7.1, 7.2 and 7.3 showing the effects of the changes arising from the Negotiated Settlement. The Final Issues List, as set out in Appendix A to the Terms of Settlement, includes the additional issues discussed by the Intervenors. 2. BCTC’s request for approval of the Depreciation Accounts and corresponding depreciation rates are approved for F2006. 3. BCTC is to refund any overpayment in rates with interest calculated at the average prime rate of the principal bank with which BCTC conducts its business. BCTC is to inform all customers of the final rates and refund by way of a customer notice. 4. BCTC is to provide the Commission with a report in the format of Exhibit B-7 that reconciles Total Transmission Revenue Requirement under the Settlement Agreement with rates by rate schedule. 5. The Commission will accept amended Electric Tariff Rate Schedules in accordance with the terms of this Order by no later than July 8, 2005. …/3

3 6. BCTC is to advise the Commission on the actions taken related to Special Direction No. 9 by September 30, 2005. DATED at the City of Vancouver, in the Province of British Columbia, this 23 Attachment Orders/BCTC_F2006RR_Settlement Agreement BR I T I S H CO L U M B I A UT I L I T I E S COM M I S S I ON OR D E R NU M B E R G-60-05 rd day of June 2005. BY ORDER Original signed by: Lori Ann Boychuk Panel Chair and Commissioner

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APPENDIX 1 to Order No. G-60-05 Page 18 of 19 -----Original Message----- From: JD Newlands [mailto:dnewlands@telus.net] Sent: Friday, June 10, 2005 9:09 AM To: Pellatt, Rob BCUC:EX Cc: Grant, Bill J BCUC:EX; Dal Scott (E-mail); Dan Potts Subject: British Columbia Transmission Corporation-Revenue Requirements- 2005/06 Dear Mr. Pellatt RE:British Columbia Transmission Corporation Negotiated Settlement Revenue Requirements-2005/06 Elk Valley Coal Corporation supports the Negotiated Settlement Agreement,inclusive of the supporting documents, attached to the letter of June 7,2005,from William J.Grant,Executive Director,Regulatory Affairs and Planning,British Columbia Utilities Commission. This settlement was achieved through the implementation of the British Columbia Utilities Commission,Negotiated Settlement Process. Yours truly J.David Newlands

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