SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, B.C. V6Z 2N3 CANADA web site: http://www.bcuc.com IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 and An Application by Kyuquot Power Ltd. for Approval of a Revision to Electric Tariff Rate Schedule 1102 BEFORE: L.F. Kelsey, Commissioner P.E. Vivian, Commissioner O R D E R WHEREAS: A. By Order C‐18‐01, the British Columbia Utilities Commission (“Commission”) approved a Certificate of Public Convenience and Necessity (“CPCN”) application by Synex Energy Resources Ltd. (“SERL”) to construct and operate a 14.4 kV single phase connection to British Columbia Hydro and Power Authority’s provincial electricity grid in order to provide electricity to Fair Harbour, Chamiss Bay and Kyuquot. The CPCN approval was conditional on SERL, or a company formed for the purposes, being a public utility. In accordance with Order C‐18‐01, SERL founded a wholly‐owned subsidiary, Kyuquot Power Ltd. (“KPL”), a public utility for the purpose of operating the distribution line; and B. Following a written hearing process, by Order G‐11‐06, the Commission approved an Electric Tariff for KPL containing terms and conditions of service and rate schedules on a permanent basis effective November 15, 2005. In the Reasons attached to Order G‐11‐06, the Commission accepted KPL’s estimated cost of approximately $3.6 million for SERL to construct the distribution line extension without markup subject to recording any funding received from the Ka:’yu:’k’t’h’/Che:k:tles7et’h’ Nation (“KCN”); and C. On February 5, 2007, KPL filed an application to change from a single Rate Schedule 1101 that covers all customers of the utility and to create a new Rate Schedule 1102 for service exclusively to the KCN effective March 31, 2007. It was KPL’s understanding that the Department of Indian and Northern Affairs (“INAC”) approved funding to KCN in the amount of $1 million prior to March 31, 2007 to lower the cost of electricity to KCN and, in subsequent years, KCN would receive a further $2 million to reduce its electricity rates (the “2007 Application”); and BRIT I SH COLU MBIA UTIL IT I ES COM MISS ION O RDER NUMBER G ‐18‐09 TELEPHONE: (604) 660‐4700 BC TOLL FREE: 1‐800‐663‐1385 FACSIMILE: (604) 660‐1102 March 5, 2009
BRIT I SH COLUMBIA UTIL IT I ES COMMISS ION ORDER NUMBER G‐18‐09 2 D. The 2007 Application requested approval to record 15 percent of the expected payment of $1 million from KCN to cover the accumulated shortfall in earned return of KPL with the remaining $850,000 to be applied as a Contribution in Aid of Construction (“CIAC”) and reduce the rate to KCN by 6.8 cents/kWh in Rate Schedule 1102. KPL provided a copy of the Application to KCN and INAC; and E. The Commission established a written hearing process to review the 2007 Application. KPL proposed in discussions with KCN and INAC that 15 percent of the grant received by KCN be paid to SERL to cover the markup on the construction of the distribution line extension and 85 percent of the grant received by KCN be used to reduce rates for KCN (BCUC IR 2.2.1, 2.2.5) (the “Revised 2007 Application”). In the Revised 2007 Application, KPL requested approval to reduce KCN’s rate by 6.8 cents/kWh in Rate Schedule 1102 effective when KCN makes a payment of $850,000 to KPL (BCUC IR 1.1.10, 2.2.5); and F. By Order G‐58‐07 dated May 31, 2007, the Commission approved the requested change to Rate Schedule 1101 and the new Rate Schedule 1102 to be effective from the date that KCN provides the CIAC payment of $850,000 to KPL, subject to review if a complaint was filed by KCN, INAC or an affected customer within six months of the Order. No complaints were received. The CIAC payment of $850,000 was received by KPL from KCN on February 18, 2008; and G. On March 9, 2008, KPL filed an application to amend Rate Schedule 1102 to decrease the energy charge by 6.8 cents per kWh from $0.282 per kWh to $0.214 per kWh upon receipt by KPL of the second CIAC payment (the “2008 Application”). By Order G‐53‐08 dated March 25, 2008, the Commission approved for KPL the requested amendments to the Electric Tariff Rate Schedule 1102 based on the 2008 Application and KCN providing a second CIAC of $850,000 to KPL; and H. On November 10, 2008, KPL received the second CIAC payment of $850,000; and I. On February 19, 2009, KPL received the third CIAC payment of $224,128.85 and on February 23, 2009, KPL filed an application to amend Rate Schedule 1102 to decrease the energy charge from $0.214 per kWh to $0.196 per kWh, calculated upon prorating the agreed reduction of 6.8 cents per kWh for a CIAC of $850,000 (the “Application”); and J. KPL is anticipating that a fourth CIAC payment in the balance of $625,817.15 ($850,000 less $224,128.85) will be received by KPL at which future time the energy charge will be reduced by $0.05 per kWh ($0.068 per kWh less $0.018 per kWh); and K. The Commission has reviewed the Application and finds that approval is warranted.
BRIT I SH COLUMBIA UTIL IT I ES COMMISS ION ORDER NUMBER G‐18‐09 3 NOW THEREFORE pursuant to section 60 of the Act, the Commission orders as follows: 1. The Commission approves for KPL the requested amendments to the Electric Tariff Rate Schedule 1102 based on the Application. 2. The approved revision to Rate Schedule 1102 is to be effective February 19, 2009, which is the date that KCN provided the third CIAC payment of $224,128.85 to KPL. 3. Subject to KPL’s receipt of the anticipated fourth CIAC payment balance amount of $625,817.15 from KCN, the Commission also approves KPL to amend Rate Schedule 1102 and decrease the energy charge by $0.05 per kWh. Upon receipt of the fourth CIAC payment, KPL is to inform the Commission within 10 working days about the CIAC payment amount, the date the CIAC payment was received and file a revised Rate Schedule 1102 for approval. If the fourth CIAC payment from KCN to KPL is not in accordance with Recital J of this Order, then KPL will be required to reapply for approval of the appropriate rate changes. 4. KPL is to provide a copy of this Order to KCN and INAC. 5. KPL is to inform all affected customers of the approval of the Application and its conditions by way of a customer notice. 6. The revision to Rate Schedule 1102 approved by this Order is subject to review if a complaint is filed by KCN, INAC or an affected customer within 6 months of this Order. DATED at the City of Vancouver, in the Province of British Columbia, this 5 th day of March 2009. BY ORDER Original signed by: L.F. Kelsey Commissioner Orders/G‐18‐09_Kyuquot Rate Schedule 1102
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