BRITISH COL UMBIA UTILITIES COM MISSION ORDER NUMBER G -32-05 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 British Columbia Hydro and Power Authority Application for Approval of F2006 Rate of Return on Equity BEFORE: L.F. Kelsey, Commissioner L.A. Boychuk, Commissioner March 17, 2005 O R D E R WHEREAS: A. British Columbia Hydro and Power Authority (“BC Hydro”) applied on March 1, 2005 for approval of its F2006 allowed return on equity (“ROE”) in accordance with Special Direction HC2 and BC Hydro’s F2005 and F2006 Revenue Requirements Decision. For F2006, BC Hydro is allowed a pre-tax rate of return based on the allowed 2005 ROE and the 2005 effective income tax rate for Terasen Gas Inc. (“Terasen”), (“the Application”); and B. BC Hydro calculated that the allowed 2005 ROE and the 2005 effective income tax rate for Terasen results in an allowed F2006 ROE for BC Hydro of 13.52 percent; and C. BC Hydro also calculated that the reduction in allowed ROE from the F2005 BC Hydro allowed ROE of 13.91 percent represents a 0.15 percent reduction in rates and a $3 million revenue decrease; and D. BC Hydro proposes to maintain customer rates at the current levels and transfer the $3 million in revenue to its existing deferral accounts; and E. The 2005 Federal Budget has proposed increases to certain capital cost allowance (“CCA”) rates which may impact the 2005 effective income tax rate for Terasen; and F. By Letter No. L-23-05, the Commission required Terasen to provide a report on the impact on Terasen’s 2005 income taxes that would occur if the proposed changes to CCA rates were to take effect; and G. The Commission has reviewed the BC Hydro Application and considers that approval is warranted. . . ./2
2 NOW THEREFORE the Commission orders that the BC Hydro Application is approved on an interim basis effective April 1, 2005, subject to adjustment following Terasen’s recalculation of its 2005 income taxes as required by Letter No. L-23-05. DATED at the City of Vancouver, in the Province of British Columbia, this 22 Orders/BCH Recalulated ROE-FY2006 BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-32-05 nd day of March 2005. BY ORDER Original signed by: Lori Ann Boychuk Commissioner
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