Orders

IN THE MATTER OF

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

and

An Application by British Columbia Hydro and Power Authority

for approval of the Smart Metering and Infrastructure Regulatory Account

– F2011 Expenditures Application

BEFORE:               L.F. Kelsey, Commissioner                                           June 30, 2011

                C.A. Brown, Commissioner

                N.E. MacMurchy, Commissioner

                D. Morton, Commissioner

O  R  D  E  R

WHEREAS:

A.      The Utilities Commission Amendment Act, 2008 added section 64.04 regarding smart meters to the Utilities Commission Act (Act) effective May 1, 2008;

B.      Section 64.04 of the Act, as amended, requires British Columbia Hydro and Power Authority (BC Hydro) to install and put into operation “smart meters” in accordance with and to the extent required by regulations, and to complete such obligations by the end of the 2012 calendar year;

C.      By Order G-64-09, the British Columbia Utilities Commission (the Commission) authorized BC Hydro to establish the Smart Metering Infrastructure Regulatory Account for the purpose of deferring the fiscal 2009 operating costs, which BC Hydro incurred for its Smart Metering Program and Smart Grid Program (SMI), plus interest at BC Hydro’s weighted average cost of debt;

D.      By Order G-67-10, the Commission further authorized BC Hydro to include in the SMI Regulatory Account actual operating costs incurred in fiscal 2010 up to $8.8 million for its SMI program, plus interest;

E.       The Smart Meters and Smart Grid Regulation was issued by the Minister of Energy on December 7, 2010, which clarifies the smart metering and smart grid program as contemplated by section 64.04(1) of the Act;

F.       On March 11, 2011, BC Hydro applied to the Commission for approval to include in the SMI Regulatory Account the actual operating costs for the SMI program that it incurred during fiscal year 2011 (F2011), forecast to be $5.8 million.  BC Hydro also sought approval to accelerate the rate of depreciation on its existing meters and to include in the SMI Regulatory Account the increased amortization in F2011 related to the accelerated depreciation of its existing meters, forecast to be $8.9 million (collectively referred to as the Application);

G.     BC Hydro states that its activities in relation to the SMI program focused on foundational elements which would be expected to be part of any program mandated by the regulations;

H.      Commission staff issued Information Requests to BC Hydro on April 7, 2011 and BC Hydro provided responses on April 29, 2011;

I.        In response to a complaint letter dated April 15, 2011 from the British Columbia Public Interest Advocacy Centre (BCPIAC), the Commission established a public process for review of this Application through Order G-78-11;

J.        Registered Interveners in this proceeding included BCPIAC, B.C. Sustainable Energy Association (BCSEA), Canadian Office & Professional Employees Union Local 378 (COPE), Commercial Energy Consumers Association of B.C. (CEC), Association of Major Power Consumers of B.C. (AMPC), Coalition to Reduction Electropollution (CORE), Mrs. I Leis, and Mr. and Mrs. Noble;

K.      In accordance with the regulatory timetable, Interveners issued information requests to BC Hydro by May 13, 2011, which BC Hydro provided responses to on May 20, 2011;

L.       The evidentiary period for this Application ended with BC Hydro’s Reply Submission on June 7, 2011;

M.    The Commission has reviewed the Application along with all materials evidenced in this proceeding and determines that approval is warranted.

NOW THEREFORE in accordance with the Application, the Commission orders as follows:

1.       BC Hydro is authorized to include in the SMI Regulatory Account actual operating costs incurred in F2011 up to $5.8 million, for its Smart Metering Program and Smart Grid Program as described in the Application, plus interest at BC Hydro’s weighted average cost of debt for its most recent fiscal year.

2.       BC Hydro is authorized to accelerate the rate of depreciation on its existing meters and also to include the increased amortization incurred in F2011 of $8.9 million in the SMI Regulatory Account.

3.       BC Hydro is authorized to carry forward the SMI Regulatory Account until BC Hydro files an application with the Commission requesting recovery of the account balance in rates and the Commission has made determinations thereon.

4.       BC Hydro is instructed to file with the Commission, no later than March 31, 2012, a schedule detailing all deferred costs in the SMI Regulatory Account in the categories described in Directive No. 4 of Order G-67-10, plus the additional category of Accelerated Depreciation of existing revenue meters.  Any costs contained in the “other” categories of expenditures should be further broken down by activity.  All future BC Hydro SMI applications and filings to the Commission shall provide costs broken down by these categories.

5.       BC Hydro shall continue to file with the Commission quarterly updates on all SMI activities, including costs incurred and budgeted.  The quarterly updates shall also include a description and value of any contracts or commitments BC Hydro undertakes related to future SMI activities.

DATED at the City of Vancouver, in the Province of British Columbia, this              4^th          day of July 2011.

                                                                                                                                BY ORDER

                                                                                                                             Original signed by:

                                                                                                                                D. Morton

                                                                                                                                Commissioner