BRIT ISH COL UMBIA UTIL IT IES COM MISSION ORDER NUMBER G ‐169‐08 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 An Application by Terasen Gas (Whistler) Inc. for Approval to Amend its Schedule of Rates Effective January 1, 2009 and for a Return on Equity and Capital Structure BEFORE: A. Rhodes, Commissioner November 13, 2008 P.E. Vivian, Commissioner O R D E R WHEREAS: A. On October 3, 2008, Terasen Gas (Whistler) Inc. (“Terasen Whistler” or the “Company”) applied to the British Columbia Utilities Commission (the “Commission”) for adjustment to its rates effective January 1, 2009 and for approval of a Return on Equity (“ROE”) and Capital Structure; and B. Commission Order G‐14‐04 approved for Terasen Whistler a negotiated settlement (the “Settlement Agreement”) of its 2004‐2005 Revenue Requirement, which set rates for the two years and established the treatment of various deferral accounts over the term of the Settlement Agreement; and C. Commission Order C‐3‐06 granted a Certificate of Public Convenience and Necessity to construct the Whistler Pipeline and convert Terasen Whistler’s propane system to natural gas and also granted permission to discontinue propane service to Whistler when natural gas service is fully in place; and D. Commission Order G‐172‐06 approved for Terasen Whistler the continuation of the January 1, 2005 rates and the Rider A adjustment mechanisms effective January 1, 2007 and the recording of variances in various accounts for 2007 activity compared to 2005 approved as established in Order G‐14‐04; and E. Commission Order G‐146‐07, effective January 1, 2008, approved for Terasen Whistler the continuation of the January 1, 2007 rates and the Rider A adjustment mechanism and the recording of variances in the Interest Rate Differential deferral account, the Property Tax deferral account, the Sales Margin Differential deferral account and the Deferred Return on Equity variance account for 2008 activity compared to 2007 as established in Order G‐14‐04, effective January 1, 2004, and continued by Order G‐172‐06, effective January 1, 2007; and
BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G‐169‐08 2 F. Commission Order G‐146‐07 also approved the establishment of a non‐rate base, non‐interest bearing deferral account for consulting costs regarding TGW’s capital structure and ROE to be included in TGW’s next ROE application subject to a test for prudency and demonstrated benefits; and G. The Application seeks approval, pursuant to Sections 58, 60 and 61 of the Utilities Commission Act for a permanent reduction to its total bundled variable rates, inclusive of Rate Rider A of $1.176 per GJ from $25.459 per GJ to $24.283 per GJ effective January 1, 2009, and a revenue surplus forecast to be $0.88 million for 2009 based on the current bundled rate including Rate Rider A; and H. As 2009 is a transition period during which there remains uncertainty related to the completion date of the Whistler Pipeline and the conversion schedule of the Terasen Whistler propane system to natural gas, Terasen Whistler is seeking approval for the implementation of transitional deferral accounts for 2009; and I. Terasen Whistler also requests that its allowed ROE be set at 75 basis points above the benchmark utility and that its capital structure for ratemaking purposes be set at 60 percent debt and 40 percent equity, effective January 1, 2009. Terasen Whistler’s current allowed ROE is set at 60 basis points above the benchmark utility and its capital structure for ratemaking purposes is set at 65 percent debt and 35 percent equity; and J. Terasen Whistler is seeking approval for changes in certain accounting treatments and continuation of certain deferral accounts; and K. Terasen Whistler is proposing to harmonize its system extension and customer connection policies with those of Terasen Gas Inc. (“TGI”) and Terasen Gas (Vancouver Island) Inc. (“TGVI”), effective January 1, 2009; and L. Commission Order G‐172‐06 directed Terasen Whistler to consider changing to an unbundled rate structure as part of its next revenue requirements application. Terasen Whistler is requesting Commission approval for unbundling of rates within the Company’s Gas Tariff and for customer billing purposes, to be effective January 1, 2010, after the completion of the Whistler Pipeline and the conversion of the propane system to natural gas; and M. Terasen Whistler considers that a written hearing process followed by a negotiated settlement process is appropriate for review of the Application and proposed a regulatory timetable that included a deadline for Intervenor registration and Intervenor comments regarding the regulatory review process; and
BRITISH COLUMBIA UTILITIES COMMISSION ORDER NUMBER G‐169‐08 3 N. Commission Order G‐152‐08 established a Regulatory Timetable for the registration of Intervenors and for the preliminary review of the Application. The Order also allowed Intervenors to make written submissions on a formal review process; and O. In a letter dated October 30, 2008, the BC Old Age Pensioners’ Organization et al. (“BCOAPO”) submitted that current global economic crisis undermines many of the growth assumptions on which Terasen Whislter's growth forecasts and capital structure are based. BCOAPO further submitted that a public oral hearing is appropriate for the review of the Application and that, in the alternative, a written hearing is preferable to a negotiated settlement process; and P. The Commission has reviewed the Application and submissions and considers that the establishment of a regulatory timetable for the review of the Application is warranted. NOW THEREFORE pursuant to Section 60 of the Utilities Commission Act, the Commission orders as follows: 1. The Application will be reviewed in a written hearing process in accordance with the Regulatory Timetable attached as Appendix A to this Order. 2. The Commission establishes the current customer rates inclusive of Rate Rider A as interim and refundable, effective January 1, 2009. 3. The differences between the 2009 interim rates inclusive of Rate Rider A and the permanent rates that are determined by the Commission following consideration of this Application are subject to refund with interest at the average prime rate of Terasen Whistler’s principal bank as set out in a Commission Order that establishes permanent rates. DATED at the City of Vancouver, In the Province of British Columbia, this 13 th day of November 2008. BY ORDER Original signed by A.A. Rhodes Commissioner Attachment Orders/G‐169‐08_TGW_2009RRAmend Reg Timetable
Terasen Gas (Whistler) Inc. Application for Approval of 2009 Revenue Requirements, Return on Equity and Capital Structure REGULATORY TIMETABLE ACTION Terasen Whistler submitted detailed Application materials Terasen Whistler to publish in display‐ad format, the Notice of Revenue Requirements Application Commission Information Request No. 1 Intervenor Registration and Intervenor Comments regarding Regulatory Review Process Commission Procedural Order confirming Regulatory Timetable Intervenor Information Request No. 1 Terasen Whistler Response to Commission and Intervenor IR No. 1 Commission and Intervenor Information Request No. 2 Terasen Whistler Response to Commission and Intervenor IR No.2 Terasen Whistler Submissions Intervenor Submissions Terasen Whistler Reply APPENDIX A to Order G‐169‐08 Page 1 of 1 DATES (2008/2009) Friday, October 3 Week of October 20 and Week of October 27 Friday, October 24 Friday, October 31 Friday, November 7 Friday, November 7 Friday, November 21 Friday, December 5 Friday, December 19 Friday, January 23 Friday, January 30 Friday, February 6
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