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 -105-08 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 Application by British Columbia Transmission Corporation for Approval of Rates Effective April 1, 2008 and April 1, 2009 BEFORE: L.A. O’Hara, Panel Chair and Commissioner June 26, 2008 O R D E R WHEREAS: A. On February 20, 2008, British Columbia Transmission Corporation (“BCTC”) filed an application for approval of its F2009 and F2010 Transmission Revenue Requirements (the “Application”) pursuant to Sections 58 and 89 of the Utilities Commission Act (the “Act”). The Application seeks approval of permanent rates effective April 1, 2008 and April 1, 2009 and to amend on an interim basis the current rates effective April 1, 2008, to reflect the rates BCTC is seeking on a permanent basis as proposed in Table 11-9 of the Application; and B. The Application forecasts a revenue deficiency of $51.4 million in F2009 and a further revenue deficiency of $38.7 million in F2010, which result in the proposed revenue requirement increases of 9.9 percent and 6.8 percent for F2009 and F2010 respectively. The rates that BCTC seeks to have approved effective April 1, 2008 and April 1, 2009, are set out in Table 11-9 columns (d) and (e) respectively of the Application. The proposed rates are forecast to have an impact on British Columbia Hydro and Power Authority (“BC Hydro”) rates of 1.7 percent in F2009 and an additional 1.2 percent in F2010. The impacts on BC Hydro rates from the proposed BCTC rate changes are already reflected in the BC Hydro F2009/F2010 Revenue Requirements application (“BC Hydro F09/F10 RRA”); and C. In the Application BCTC sets out that upon conclusion of the proceeding BCTC will implement permanent rates and make adjustments to prior billings, in accordance with the Commission’s decision on the Application; and D. BCTC’s Application also seeks approval of: (i) Substation Distribution Asset Management and Maintenance costs and Distribution Operations Services costs for F2009 and F2010; and (ii) continuation of the existing deferral accounts and approval of a new deferral account; 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-105-08 2 E. By Order No. C-4-06 the Commission ordered that the incentive/penalty mechanism described in Section 9 of its July 7, 2006 Vancouver Island Transmission Reinforcement (“VITR”) Decision, be applicable to the VITR Project. The Application includes evidence that the cost variances of the VITR Project have primarily been outside BCTC’s control, and BCTC therefore requests that it be granted relief from the effects of the mechanism; and F. By Order No. G-22-08, the Commission approved interim refundable rates effective April 1, 2008 as set out in Table 11-9 column (d) of the Application; and G. By Order No. G-23-08, the Commission scheduled a Procedural Conference for March 20, 2008 to address procedural matters related to the Application. At the Procedural Conference, the British Columbia Old Age Pensioners’ Organization et al. (“BCOAPO”) made a motion that in view of the number of BC Hydro proceedings currently before the Commission this Procedural Conference be adjourned for a period of three months or longer (the “BCOAPO Motion”) (T1:5-8). The Commission Panel considered the BCOAPO Motion, found that although it had significant merit the submissions by BCTC and other Intervenors were more persuasive and, accordingly decided that the Procedural Conference would proceed as planned (T1:15); and H. At the Procedural Conference, BCTC and the Intervenors supported a negotiated settlement review process (“NSP”) for the review of the Application with the JIESC proposing a Pre-hearing Conference and BCOAPO proposing a second Procedural Conference in the event the NSP is not successful in resolving all of the issues; and I. By Order No. G-54-08, the Commission established a regulatory timetable for an NSP commencing May 14, 2008 and a second Procedural Conference on Wednesday, June 11, 2008 (the “Second Procedural Conference”). The settlement discussions concluded on May 15, 2008; and J. In a letter dated May 28, 2008, the Commission requested that NSP Participants provide comments regarding whether the Second Procedural Conference should be cancelled. The NSP Participants agreed that the Second Procedural Conference should be cancelled and Commission Order No. G-89-08 cancelled the Second Procedural Conference; and K. The NSP Participants provided Letters of Support for the proposed Settlement Agreement and Registered Intervenors who did not participate in the Settlement provided no comments by the deadline of June 20, 2008; and L. BCTC has applied to the Commission for approval of its F2009-F2018 Transmission System Capital Plan (“TSCP”). A Commission decision on the TSCP application (the “TSCP Decision”) is pending. BCTC will reflect in final rates the impact of the F2009 and F2010 capital expenditure approvals to be provided in the Commission’s TSCP Decision; and …/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-105-08 3 M. BC Hydro has applied to the Commission for approval of the BC Hydro F09/F10 RRA. By Order No. G-78-08 the Commission set a regulatory timetable which schedules a Negotiated Settlement Process for the BC Hydro F09/F10 RRA for August 18-22, 2008 and a oral public hearing to commence (if necessary) on October 6, 2008. BCTC will reflect in final rates the impact of pending Commission BC Hydro F09/F10 RRA Decision on BC Hydro’s Owners Revenue Requirement; and N. The Commission having reviewed the proposed Settlement Agreement and the comments related thereto and noting the support of all parties to the Proposed Settlement, in which none of the provisions are severable, considers that approval is warranted. NOW THEREFORE the Commission orders as follows: 1. The Commission approves the Settlement Agreement attached as Appendix 1 to this Order. 2. Pursuant to Section 6 of Special Direction No. 9, the Commission approves the continuation of the existing deferral accounts and the establishment of a new deferral account for International Financial Reporting Standards costs. 3. The Commission approves the Substation Distribution Asset Management and Maintenance costs and Distribution Operations Services costs for F2009 and F2010, to be incurred by BCTC for provision of services to BC Hydro, as shown in Table 7-14 and described in Sections 7.6.2 and 7.6.5 of the Application. 4. After the determination of items identified in recitals L and M, the Commission will accept amended Electric Tariff Rate Schedules in accordance with the terms of this Order. 5. BCTC is to refund any overpayment in rates with interest calculated at BCTC’s most recent annual weighted cost of debt as set out in the Commission Order that establishes permanent rates for BCTC. BCTC is to inform all customers of the final rates and refund by way of a customer notice. DATED at the City of Vancouver, in the Province of British Columbia, this 26 th day of June 2008. BY ORDER Original signed by: L.A. O’Hara Panel Chair and Commissioner Attachment Order/G-105-08_BCTC_F2009-F2010-Settlement
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