BR I T I S H CO L U M B I A U T I L I T I E S COM M I S S I ON OR D E R NU M B E R G -9-08 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 Terasen Gas Inc. 2008 Rate Riders BEFORE: L.F. Kelsey, Commissioner P.E. Vivian, Commissioner January 16, 2008 O R D E R WHEREAS: A. The Commission by Order No. G-150-07, approved for Terasen Gas Inc. (“TGI”), the Commodity Unbundling Deferral Costs Rate Rider 8 and the Stable Commodity Rate Residential Service Deferred Costs Rate Rider 9, both effective January 1, 2008. Rate Rider 8 was set at $0.118 per gigajoule for eligible residential customers and reset to $0.047 per gigajoule for applicable commercial customers. Rate Rider 9 was set to zero for the applicable rate classes; and B. The Commission by Order No. G-153-07, approved the TGI 2008 Revenue Requirements and Delivery rates including the Earnings Sharing Mechanism (“ESM”) Rate Rider 3 and Rate Stabilization Adjustment (“RSAM”) Rate Rider 5, effective January 1, 2008. The Reasons attached to the Order also directed TGI to use the prospective tax rate of 31.5 percent in setting 2008 rates rather than the proposed 32.5 percent tax rate; and C. By Order No. G-155-07 the Commission approved a TGI – Revelstoke propane increase effective January 1, 2008; and D. On December 20, 2007 TGI filed its Tariff Continuity Schedules and amended Tariffs in accordance with Orders No. G-150-07, G-153-07 and G-155-07, effective January 1, 2008; and D. On January 3, 2008 TGI filed its regulatory schedules in accordance with Order No. G-153-07. The regulatory schedules reflected the approved revenue requirements and the approved 2008 tax rate of 31.5 percent; 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-9-08 2 E. On January 7, 2008 TGI filed a response to a Commission staff information request regarding rate riders (“the Filing”). In the Filing TGI indicated that the ESM rider is unaffected by a change to the 2008 income tax rate. TGI also indicated that if the RSAM rider was updated for the 2008 income tax rate of 31.5 percent the rider would be $0.094 per gigajoule instead of $0.095 per gigajoule. Also, in the Filing TGI stated that the Commodity Unbundling Rider for residential customers would then be reduced to $0.117 per gigajoule instead of $0.118 per gigajoule when updated for the 31.5 percent tax rate; and F. Commission staff Information Request No. 1 dated January 10, 2008 was issued to TGI regarding net-of-tax treatment and the calculation of rate riders. TGI responded to Information Request No. 1 on January 14, 2008. In its response TGI confirms that the RSAM, Commodity Cost Reconciliation Account, and Midstream Cost Reconciliation Account deferral accounts are subject to net-of-tax deferral accounting with the rate rider based on the grossed-up amortization at the then-prevailing income tax rate in the year the rate rider charge/refund occurs. TGI submits with regards to the ESM that for 2008 rider purposes the utility has followed past practice and used the tax rate in place when the excess earnings were realized (the 2007 tax rate). TGI provided a calculation of the 2008 ESM rider if the 31.5 percent tax rate was used for the earnings sharing; and G. The Commission has reviewed the Filing and related information regarding the TGI rate riders. NOW THEREFORE pursuant to Sections 58, 60 and 61 of the Utilities Commission Act, the Commission orders: 1. TGI is directed to use the corporate income tax rate of 31.5 percent in setting 2008 rates including rate riders. 2. The Commission approves the ESM rider, effective February 1, 2008, as filed using the 31.5 percent tax rate. 3. The Commission approves the RSAM rider, effective February 1, 2008, as filed using the 31.5 percent tax rate. 4. The Commission approves the Commodity Unbundling Deferral Costs rider, effective February 1, 2008, as filed using the 31.5 percent tax rate. 5. The Commission will accept, subject to timely filing, amended Gas Tariff rate schedules in accordance with the terms of this Order. …/3
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-9-08 3 DATED at the City of Vancouver, in the Province of British Columbia, this 16 th day of January 2008. BY ORDER Original signed by L.F. Kelsey Commissioner Orders/G-9-08_TGI_2008 Rate Riders
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