Orders

BRITISH COL UMBIA UTILITIES COM MISSION ORDER NUMBER G -42-07 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 FortisBC Inc. and Customer Complaints regarding the Naramata Substation Project BEFORE: L.F. Kelsey, Commissioner April 12, 2007 O R D E R WHEREAS: A. The Naramata Substation Project to rebuild the Naramata substation at a different site (the “Project”) was included in the FortisBC Inc (“FortisBC”) 2005 Capital Expenditure Plan that formed part of the 2005 Revenue Requirements, System Development Plan and Resource Plan Application; and B. After the 2005 Capital Expenditure Plan was reviewed in an oral public hearing, the Commission by Order No. G-52-05 approved all capital projects in the 2005 Capital Expenditure Plan except for four projects, for which FortisBC was directed to submit Certificate of Public Convenience and Necessity (“CPCN”) Applications. The Project was not one of these four projects; and C. After receiving correspondence from a number of local residents about the execution of the Project by FortisBC, by letter dated July 13, 2006 the Commission requested that FortisBC file a status report for the Project; and D. FortisBC filed a status report on the Project on July 21, 2006 that addressed its site selection process and other matters; and E. FortisBC subsequently filed additional information about the Project on August 11, August 18, September 15, October 26 and November 16, 2006, and February 14 and March 15, 2007; and …/2

BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-42-07 2 F. On November 1, 2006, FortisBC held a public information session in Naramata to review the Fire Hall and Arawana Road potential substation sites, which was attended by approximately 200 residents; and G. In its March 15, 2007 filing, FortisBC advised that it had completed its review of the Fire Hall and Arawana Road sites for the Project, and that it intends to construct the Project at the Arawana Road site based on a number of factors including costs, operations and safety, aesthetics and flexibility for future growth; and H. The Commission has received a considerable amount of correspondence referencing concerns about FortisBC’s decision to proceed at the Arawana Road site and requesting that the Commission require FortisBC to apply for a CPCN for the Project and hold a public hearing into the matter; and I. The Commission has considered the submissions that it has received on the matter and has concluded that an oral public hearing into the siting of the substation is required; and NOW THEREFORE the Commission orders as follows: 1. The Commission directs that any construction work on the Project will be suspended immediately in an orderly and safe manner, pending further instructions from the Commission. 2. Pursuant to Section 82 of the Utilities Commission Act (the “Act”), the Commission establishes an oral public hearing into Project siting options and related costs and issues. The Regulatory Timetable, date, time and location of the hearing will be determined in a future Order. 3. The Commission directs FortisBC to file a Report comparing the Arawana and Fire Hall siting alternatives, and such other siting options as FortisBC wishes to include, by Monday, April 30, 2007. The Report will provide the information identified in Appendix A and may include the FortisBC letter dated April 10, 2007 to the Commission. …/3

3 4. When it files the Report, the Commission requests FortisBC to provide a proposed Regulatory Timetable for the hearing, which includes one set of written Information Requests. 5. FortisBC will publish, by Wednesday, April 25, 2007 or as soon as possible thereafter, in display ad format, the Notice of Oral Public Hearing attached as Appendix B to this Order, in the appropriate sections of local news publications that will properly provide adequate notice to the public in the Naramata area. 6. FortisBC will provide a copy of this Order to all parties that attended the November 1, 2006 public information session or who have otherwise contacted it regarding the Project, to the extent it is possible to do so. 7. Intervenors and Interested Parties are to register with the Commission, in writing, by Monday, May 7, 2007. DATED at the City of Vancouver, in the Province of British Columbia, this 17 Attachment Orders/G-42-07_FortisBC_Naramata Substn Ntc Hrg BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G-42-07 th day of April 2007. BY ORDER Original signed by: L.F. Kelsey Commissioner

APPENDIX A to Order No. G-42-07 Page 1 of 1 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 CANADA BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 web site: http://www.bcuc.com FORTISBC INC. NARAMATA SUBSTATION PROJECT Report Comparing Siting Alternatives for the Substation The Report will provide a summary of expenditures to date, a total project cost estimate and project schedule for the substation and transmission and distribution line connections that are included in the Naramata Substation Project, for each site alternative. A summary of the agreements, permits and approvals that remain outstanding for each site will be included. The Report will also provide a table similar to the following that compares the sites on the basis of non-financial criteria. FortisBC should provide a definition for each criteria, and suggest additional or revised criteria, where necessary. The criteria should be clearly defined and non-redundant. A score of 5 is suggested for the best performing alternative, and the weighting factors for the criteria should sum to 100. Criterion Weighting Arawana Fire Hall Other Factors Rank Weighted Rank Weighted Rank Weighted Rank Rank Rank 1. Reliability 2. Operations & Safety 3. Public Health 4. Risk of Delay 5. First Nations 6. Terrestrial Habitat 7. Parks & Recreation 8. Aesthetics 9. Property Values 10. EMF 11. Effects during Construction 12. Flexibility for Future Growth 13. Totals 100

APPENDIX B to Order No. G-42-07 Page 1 of 2 SIXTH FLOOR, 900 HOWE STREET, BOX 250 TELEPHONE: (604) 660-4700 VANCOUVER, B.C. V6Z 2N3 CANADA BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 web site: http://www.bcuc.com FORTISBC INC. NARAMATA SUBSTATION PROJECT NOTICE OF ORAL PUBLIC HEARING DATE, TIME AND LOCATION to be determined THE PROJECT The 2005 Capital Expenditure Plan of FortisBC Inc. (“FortisBC”) included the Naramata Substation Project to rebuild the Naramata substation at a different site. In Order No. G-52-05 that responded to the 2005 Capital Expenditure Plan, the Commission approved the project. In letters dated March 15 and April 10, 2007, FortisBC reviewed its selection of a site for the new substation, and advised that it was proceeding to construct the substation on the Gibbard property site on Arawana Road rather than the Fire Hall site at Naramata Road and Debeck Road. THE REGULATORY PROCESS In response to correspondence from a member of interested parties referencing concerns about FortisBC’s decision to proceed at the Arawana site, by Order No. G-42-07 the Commission established an oral public hearing into the siting of the substation, and directed FortisBC to file a Report on the siting options by April 30, 2007. The Regulatory Timetable, date, time and location for the hearing will be determined at a future date. Participant Assistance/Cost Award funding will be available for this proceeding, consistent with the criteria in the Guidelines that are Appendix A to Order No. G-15-04. The Commission has typically interpreted the Guidelines to mean that it will not fund individuals, individual business interests or municipalities INTERVENTIONS Persons who expect to actively participate in the proceeding should register as Intervenors with the Commission, in writing, by Monday, May 7, 2007, identifying their interest in the hearing to review Project siting. Intervenors will receive copies of the Report as well as all correspondence and filed documentation and should provide an e mail address if available.

APPENDIX B to Order No. G-42-07 Page 2 of 2 Persons not expecting to actively participate in the proceeding, but who have an interest in the Project, should register as Interested Parties with the Commission, in writing, by Monday, May 7, 2007, identifying their interest in the matter. Interested Parties will receive a copy of the Report and all Orders issued. All submissions and/or correspondence received from active participants or the general public relating to the proceeding will be placed on the public record and posted to the Commission’s web site. PUBLIC INSPECTION OF THE DOCUMENTS The Report and supporting materials will be available for inspection at the following locations: FortisBC Inc. British Columbia Utilities Commission Head Office Sixth Floor, 900 Howe Street Fifth Floor 1628 Dickson Avenue Vancouver, BC V6Z 2N3 Kelowna, B.C. V1Y 9X1 Telephone: 1-800-663-1385 http://www.fortisbc.com http://www.bcuc.com FortisBC Inc. Trail Office 1290 Esplanade Trail, B.C. V1R 4L4 FURTHER INFORMATION For further information, please contact the Commission Secretary, Mr. Robert Pellatt as follows: Commission Secretary Telephone: (604) 660-4700 Facsimile: (604) 660-1102 E-mail: Commission.Secretary@bcuc.com BC Toll Free: 1-800-663-1385