IN THE MATTER OF

the Utilities Commission Act, R.S.B.C. 1996, Chapter 473

 

and

 

Applications for Participant Assistance/Cost Award

in the Application by British Columbia Hydro and Power Authority

for the Review of the Fiscal 2011 Revenue Requirements Application

 

 

BEFORE:                 D.A. Cote, Panel Chair/Commissioner

                                M.R. Harle, Commissioner                                                  March 17, 2011

                                L.A. O’Hara, Commissioner

 

O  R  D  E  R

 

WHEREAS:

 

A.       British Columbia Hydro and Power Authority (BC Hydro) filed on March 3, 2010 with the British Columbia Utilities Commission (Commission, BCUC), pursuant to sections 44.2 and 58 to 61 of the Utilities Commission Act (the Act), its F2011 Revenue Requirements Application (the F11 RRA, or Application) for, among other things, final approval of an across-the board rate increase of 6.11 percent, effective April 1, 2010, and final approval to increase the Deferral Account Rate Rider from 1.0 percent to 4.0 percent, effective April 1, 2010.  For the residential inclining block rate schedules 1101 and 1121, BC Hydro is proposing to apply the 6.11 percent increase equally to the Basic charge and Step 1 and Step 2 energy charges;

 

B.       On March 15, 2010, Commission Order G-47-10 established an Initial Regulatory Timetable.  The Initial Regulatory Timetable included a Workshop on April 7, 2010, Commission and Intervener Information Requests, Responses by BC Hydro and a Procedural Conference on May 25, 2010.  The Order also approved BC Hydro’s request for interim rates subject to refund with interest at BC Hydro’s weighted average cost of debt for its most recent fiscal year;

 

C.       By Order G-180-10 dated December 2, 2010, the Commission approved for BC Hydro the Negotiated Settlement Agreement for BC Hydro’s F11 RRA;

 

D.       On October 13, 2010, VW Ruskin and Associates (Mr. Ruskin) filed an application for a Participant Assistance/Cost Award (PACA);

 

E.        Between December 7, 2010 and January 7, 2011, the following groups or individuals filed applications for a PACA:

 

•         British Columbia Old Age Pensioners’ Association et al. (BCOAPO);

•         BC Sustainable Energy Association and the Sierra Club of British Columbia (BCSEA);

•         Clean Energy BC (formerly The Independent Power Producers of British Columbia, IPPBC);

•         Commercial Energy Consumers Association of BC (CEC); and

•         Joint Industry Electricity Steering Committee (JIESC);

 

F.        By letter dated February 11, 2011 to the Commission, BC Hydro provided comment regarding the overall F11 RRA PACA and specific comments on each PACA application;

 

G.       Commission Letter L-9-11 increased the eligibility from 18.18 days to 20 days (13.94 for preparation and 6.06 for hearings) per participant to be considered for a PACA cost award and provided all Interveners with the option to resubmit PACA claims with justification and supporting invoices by Thursday, March 3, 2011;

 

H.       On March 1, 2111, BCOAPO and JIESC submitted revised PACA applications to the Commission;

 

I.         In a letter dated March 9, 2011, BC Hydro stated that the revised PACA applications are consistent with the ratio of hearing days to preparation days allowed for in BCUC Letter L-9-11;

 

J.        The Commission has reviewed the PACA applications with regard to the criteria and rates set out in the PACA Guidelines in Commission Order G-72-07 and has concluded that cost awards should be approved for Participants in the proceeding, as set out in the Reasons for Decision that are attached as Appendix A to this Order.

 

 

NOW THEREFORE the Commission orders as follows:

 

1.         Pursuant to section 118(1) of the Act, the Commission awards funds to the following for their participation in the proceeding:

 

 

2.      BC Hydro is directed to reimburse the above-noted Participant for the Award amount in a timely manner.

 

 

DATED at the City of Vancouver, in the Province of British Columbia, this                                               day of March 2011.

 

                                                                                                                                BY ORDER

 

                                                                                                                                Original signed by:

 

        D.A. Cote

                                                                                                                                Panel Chair/Commissioner

Attachment

Applications for Participant Assistance/Cost Award

in the Application by British Columbia Hydro and Power Authority

for the Review of the Fiscal 2011 Revenue Requirements Application

 

 

1.0       INTRODUCTION

 

On December 2, 2010, the British Columbia Utilities Commission (Commission) issued Order G-180-10 wherein it approved the Negotiated Settlement Agreement (NSA) dated November 18, 2010, with respect to the British Columbia Hydro and Power Authority’s (BC Hydro) F2011 Revenue Requirements Application (F2011 RRA).

 

The Commission has received six applications from Interveners pursuant to section 118 of the Utilities Commission Act (UCA) for Participant Assistance/Cost Award (PACA) funding for the F2011 RRA proceeding totaling $303,337.

 

The Commission PACA Guidelines are set out in Appendix A to Order G-72-07 state that the Commission Panel will first consider whether the Participant has a substantial interest in a substantial issue in the proceeding.  The Commission Panel will then consider the following:

 

(i)       Will the Participant be affected by the outcome?

(ii)     Has the Participant contributed to a better understanding of the issues by the Commission?

(iii)    Are the costs incurred by the Participant for the purposes of participating in the proceeding fair and reasonable?

(iv)    Has the Participant joined with other groups with similar interests to reduce costs?

(v)     Has the Participant engaged in any conduct that tended to unnecessarily lengthen the duration of the proceeding?  (This criterion will not, by itself, disqualify a Participant for pursuing a relevant position in good faith and with reasonable diligence)

(vi)    Any other matters appropriate in the circumstances.

 

 

2.0       Proceeding and Preparation Days

 

As outlined in Section 4 of the PACA Guidelines the term proceeding day encompasses the following: workshop days, negotiation days, pre-hearing conference days, hearing days and oral argument days.  In addition, the Commission Panel may award costs for preparation days which is typically on a ratio of up to two days per proceeding day.  The PACA Guidelines allow for an adjustment to this ratio where there has been adequate justification from Participants.

 

The Commission Panel has determined that the number of proceeding days in the F2011 RRA is 6.06 which would normally result an allowable preparation time of 12.12 days.  In a letter dated January 5, 2011, the Joint Industry Electricity Steering Committee (JIESC) submitted its PACA funding claim for this hearing.  The letter noted that the usual 2 to 1 formula of preparation days to hearing days was not commensurate with the effort required by the Interveners and JIESC’s costs were significantly higher than its submitted claim.  The JIESC added that it would like the opportunity to resubmit its application if the Commission were to vary from the usual formula.  In its January 27, 2011 letter regarding the PACA applications, BC Hydro noted the magnitude of evidence it had filed and commented that the Commission may wish to increase the ratio from the norm “in recognition of the substantial effort that had already occurred prior to the NSP, both in duration and scope of the proceeding.”  In Letter L-9-11, dated February 28, 2011, the Commission Panel acknowledged that the effort required to review the materials in their entirety was time consuming, given the significant volume of information and complexity of the issues.  Accordingly, it was the Panel’s finding that a ratio of 2.3:1 is more appropriate resulting in a maximum eligibility of 20 days (13.94 for preparation and 6.06 for hearings) per category of participant to be considered for PACA cost awards.  All Interveners were given the opportunity to resubmit PACA claims with justification and supporting invoices as a result of this change.

 

 

3.0       PACA Applications

 

The Commission received six applications as well as resubmissions from both BCOAPO and JIESC.  The original applications and the revised resubmissions from two of the Interveners are summarized in the table below.

 

	Original	Revised
British Columbia Old Age Pensioners’ Organization et al. (BCOAPO)	$41,135.06	$69,238.10
B.C. Sustainable Energy Association et al. (BCSEA)	$28,622.25	No Change
Clean Energy BC	$70,784.00	No Change
Commercial Energy Consumers of BC (CEC)	$87,869.61	No Change
Joint Industry Electricity Steering Committee (JIESC)	$75,107.20	$75,107.20
Vernon Ruskin	$  6,036.25	No Change
TOTAL	$309,554.37	$337,657.41

 

BC Hydro was asked to comment on each of the PACA applications as well as the resubmissions which were filed as a result of the change in the number of days allowed for preparation.  BC Hydro provided comments on the initial PACA applications in its letter of February 11, 2011 and on the resubmissions in its letter of March 9, 2011.

 

 

4.0       Adjustments to Individual PACA Application Amounts

 

The Commission Panel has reviewed all six PACA applications, has considered the comments of BC Hydro and makes the following determinations with respect to cost awards:

 

BCOAPO

 

BCOAPO claims for costs total $69,238.10 (including HST).  The BCOAPO claim is based upon a total of 20 days (proceeding and preparation) for legal counsel and a total of 20.65 days for consultants plus disbursements.  BC Hydro expressed no concern with the claims submitted by BCOAPO.  The Commission Panel considers BCOAPO as having a substantial interest and a broad scope with respect to substantial issues in the proceeding and notes that it participated fully.  However, the Panel notes that the amount of time being claimed for consultants exceeds the maximum of 20 days by .65 days.  Therefore, the amount claimed by BCOAPO is reduced in the amount of $910.00 ($1250 x .65 plus 12% HST).  The BCOAPO adjusted cost award amount is $68,328.10.

 

BCSEA

 

BCSEA claims for costs total $28,622.25 (including HST).  The BCSEA claim is based upon a total of 13.5 days (proceeding and preparation) for legal counsel and a further 2.85 days for a case manager.  BC Hydro in its comments is supportive BCSEA’s characterization of their interest in the proceeding as a “ratepayer group” and considers that their participation in the in the 2011 RRA focused on the issues of most concern to it.  BC Hydro was of the view that the number of days included in the application is consistent with the limited approach and the costs applied for are reasonable.  The Panel views the BCSEA’s limited participation in the 2011 RRA as reflective of its interest in the proceedings, is satisfied that it made a good contribution and that the amount of time being claimed for is consistent with PACA Guidelines and not unreasonable.  Accordingly, the BCSEA claim for a cost award of $28,622.25 is granted.

 

Clean Energy BC

 

Clean Energy BC has claimed costs which total $70,784.00 (including HST).  The Clean Energy BC claim is based upon a total of 24 days (proceeding and preparation) for legal counsel and a further 16 days for a consultant.  BC Hydro in its comments points out that Clean Energy BC did not represent a ratepayer group but participated in the 2011 RRA representing the interests of independent power producers as suppliers to BC Hydro.  Further, BC Hydro observed that this limited participation was not reflective of the number of days and the relatively high costs applied for as compared to Interveners representing customer groups that have a broader scope.  The Commission Panel acknowledges that Clean Energy BC has made a contribution to the 2011 RRA but does agree with BC Hydro that its issues were narrower in scope than the Interveners for customer groups and did not encompass all of the Application.  Because of this we are in agreement with BC Hydro’s description of Clean Energy BC’s involvement as ‘limited’ with respect to scope.  The Panel has reduced the cost award in this instance to 15 days and accordingly reduced the amounts for legal counsel by $18,144 (9 days x $1800 plus HST) and the consultant by $1,400 (1 day x $1250 plus HST).  The adjusted Clean Energy BC cost award is $51,240.

 

CEC

 

The CEC has claimed costs which total $87,869.61 (including HST, applicable GST and PST).  CEC’s claim is based on a total of 16.85 days (proceeding and preparation) for legal counsel, 18.0 days for a consultant and 20.5 days for what it described as the preparation of expert evidence.  The total of 38.5 days for consulting and expert evidence was fulfilled by Mr. David Craig who played a dual role.  BC Hydro in its comments notes that the CEC’s application appears reasonable with the exception of the cost claim for Mr. Craig for the time spent for the production of expert evidence.  BC Hydro continues by stating that while it does not deny the analysis of Mr. Craig was of some value and supports payment of some of the costs, it does not agree with the amount or the characterization of Mr. Craig’s analysis as expert evidence.  The Commission Panel considers the CEC as having a substantial interest in the substantial issues in the proceedings and that it participated fully.  However, the Panel is not convinced that the need for expert evidence has been established and views the contribution of Mr. Craig as performing the role of consultant.  The Panel notes that it has set a maximum of 20 days for consulting for participants and sees no reason to vary from this in the case of CEC.  Accordingly, the amount claimed by CEC is reduced in the amount of $25,900 (18.5 x $1250 plus HST).  The CEC adjusted cost award amount is $61,969.61.

 

JIESC

 

The JIESC has claimed costs which total $75,107.20 (including HST).  This claim is based upon a total of 20 days each (proceeding and preparation) for legal counsel and a regulatory and cost consultant and 6.06 days for a case manager.  BC Hydro raised no issues with respect to either the initial claim of the JIESC or the resubmission.  The Commission Panel considers the JIESC as having a substantial interest in the substantial issues in the proceedings and participated fully in the broad range of issues in BC Hydro’s 2011 RRA, and the amounts of time being claimed are consistent with provisions outlined in Commission Letter L-9-11.  Accordingly, the JIESC claim for a cost award of $75,107.20 is granted.

 

Mr. Vernon Ruskin

 

Mr. Vernon Ruskin has claimed costs which total $6,036.25 which is based on a total of 4.125 days at the expert witness/specialist rate of $1,450 per day and out of pocket expenses of $55.00.  BC Hydro noted that in its view the involvement of Mr. Ruskin was not typical of that associated with an expert witness or a specialist in this type of regulatory proceeding.  BC Hydro further commented that while the Commission may consider awarding some costs to Mr. Ruskin for his time, it should be at a lower daily rate and commensurate with his contribution.  The Commission Panel acknowledges that Mr. Ruskin had a personal interest in the proceedings and did participate.  However, the Panel notes that Mr. Ruskin did not have a substantial interest in a substantial issue related to the proceedings and therefore does not qualify for PACA funding.  However, it is understood that Mr. Ruskin did make a contribution.  Accordingly, the Commission Panel considers that awarding Mr. Ruskin an Honorarium in the amount of $1,000 (to include out of pocket expenses) in recognition of this contribution is appropriate in this instance.