LETTER NO. L-35-05 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. 10116 VIA E-MAIL Stirling.Bates@gems6.gov.bc.ca June 2, 2005 Mr. Stirling M. Bates Director, Regulatory Policy Oil and Gas Policy Branch / Oil and Gas Division Ministry of Energy and Mines PO Box 9318, Stn Prov Gov’t 5th Floor, 1810 Blanshard Street Victoria, BC V8W 9N3 Dear Mr. Bates: Re: Terasen Gas (Squamish) Inc. Proposed Main Extension to Sea to Sky University The Commission has reviewed the financial projections contained in the Terasen Gas (Squamish) Inc. (“Terasen Squamish) Sea to Sky University (“SSU”) main extension application dated May 13, 2005. Based on the information provided, the Commission agrees that the extension should proceed. Due to the nature of the development and the uncertainty of demand, Terasen Squamish is not prepared to assume the volume risk, and therefore economic risk, for the development. As such, SSU has agreed to pay a refundable contribution in aid of construction (“CIAOC”) for the entire cost of the main extension. Consistent with previous main extension applications, Terasen Squamish will take responsibility for increased Rate Stabilization Facility (“RSF”) funding that results from capital costs that are higher than forecasted. In the application, Terasen Squamish has included natural gas prices based on its approved January 1, 2005 rates. The RSF impact analysis pertaining to the SSU main extension indicates favourable RSF payments for each of the 20 years in the forecast period (Case 2). If no load materializes (Case 1), the Annual RSF Discounted Cumulative Draw will be $28,707 at the end of 20 years. Due to developer construction timelines, the Terasen Squamish SSU main extension application should be considered at the Ministry’s earliest convenience. If approval is granted, the Commission requests a copy of the Ministry’s response to Terasen Squamish approving the SSU main extension. Should the Ministry not approve the extension, or require changes that affect the RSF payment calculations, please provide the Commission with details regarding the disapproval, or the changes. …/2
2 LETTER NO. L-35-05 Yours truly, Original signed by: Robert J. Pellatt DC/yl cc: Mr. Scott A. Thomson, Senior Vice President and CFO Terasen Gas (Squamish) Inc. Mr. Paul Wieringa, Director Electricity Policy Branch Ministry of Energy and Mines TGSQ/Cor/Sea to Sky University Main Xtnsn
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