BRITISH COL UMBIA UTILITIES COM MISSION ORDER NUMBER G -56-06 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 Establishment of Regulatory Asset Regarding First Nations Claim Provisions BEFORE: R.H. Hobbs, Chair A.W.K. Anderson, Commissioner May 18, 2006 A. J. Pullman, Commissioner O R D E R WHEREAS: A. On April 18, 2006 the British Columbia Hydro and Power Authority (“BC Hydro”) applied for the establishment, by a British Columbia Utilities Commission (“Commission”) Order, of a regulatory asset in respect of a loss provision (“ the Application”) pertaining to two claims made against BC Hydro by First Nations; and B. BC Hydro advised that negotiations in respect of these two claims have advanced to the point in fiscal year 2006 that BC Hydro is now obliged, under generally accepted accounting principles (“GAAP”), to record a loss provision in that period; and C. BC Hydro attached to the Application, in confidence, a summary of these two claims, the current status of the negotiations in respect of them, and BC Hydro’s estimate of the net present value of proposed agreements that would, among other things, settle these two claims on the basis described; and D. BC Hydro sought confidential treatment of this information because it believes that making the information public at this stage could adversely affect both the negotiations in respect of the proposed agreements from which the Application arises, and in addition other First Nations grievances that BC Hydro is addressing; and E. In the Application BC Hydro did not seek any pre-approval from the Commission with respect to the ultimate recovery in rates of the amount of the loss provision. If and when payments occur and legally binding payment obligations are accepted by BC Hydro, it would seek recovery of the actual payments in future revenue requirements proceedings; and F. BC Hydro asked the Commission to give early consideration to the Application so that there is no unnecessary delay in closing its books for fiscal 2006; and …/2
2 G. On April 21, 2006, May 9, 2006 and May 15, 2006 the Commission issued Commission Information Requests (“IR”) No. 1, 2 and 3, respectively to BC Hydro to obtain further information regarding the Application. BC Hydro responded to Commission IRs No. 1, 2 and 3 on April 28, 2006, May 12, 2006 and May 17, 2006, respectively; and H. The Commission considers that the Application is in the public interest. NOW THEREFORE in accordance with the Application, the Commission authorizes BC Hydro to establish, in fiscal year 2006, a regulatory asset in the amount of the loss provision it recognizes in respect of the two claims made against it by First Nations and carry forward the regulatory asset until: (i) the settlement with First Nations is completed and the actual amount is known; (ii) BC Hydro has filed an application providing for the accounting treatment for the final settlement amount and the manner in which, if any, that amount may be recovered in rates; and (iii) the Commission has made a determination thereon. DATED at the City of Vancouver, in the Province of British Columbia, this 18 Orders/BCH_Regulatory Asset First Nations BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-56-06 th day of May 2006. BY ORDER Original signed by: R.H. Hobbs Chair
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