Orders

IN THE MATTER OF

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

 

and

 

Applications for Participant Assistance/Cost Award

British Columbia Hydro and Power Authority

Application for a Certificate of Public Convenience and Necessity

for the Dawson Creek/Chetwynd Area Transmission Project

 

 

BEFORE:                 L.A. O’Hara, Panel Chair/Commissioner

                                C.A. Brown, Commissioner                                                 December 27, 2012

                                D.M. Morton, Commissioner

 

O  R  D  E  R

 

WHEREAS:

 

A.       On July 11, 2011, British Columbia Hydro and Power Authority (BC Hydro) filed pursuant to section 46(1) of the Utilities Commission Act (the Act), an application for a Certificate of Public Convenience and Necessity to construct and operate the Dawson Creek/Chetwynd Area Transmission Project (the Project) as described in the Application, and an Amendment to the Electric Tariff under subsection 58(1) and 61(2) of the Act;

 

B.       By Order G-132-11 dated July 26, 2011 the British Columbia Utilities Commission (Commission) established a Written Public Hearing process for the review of the Application;

 

C.       By Order G-144-12 dated October 10, 2012, the Commission established conditions for granting a Certificate of Public Convenience and Necessity to BC Hydro for the Project;

 

D.       On August 22, 2012, the BC Sustainable Energy Association (BCSEA) filed its Participant Assistance/Cost Award (PACA)application in an amount of $29,948.85;

 

E.        On August 29, 2012, the West Moberly First Nation (WMFN) filed its PACA Application in an amount of $133,031.51;

 

F.        On September 4, 2012, the British Columbia Pensioners’ and Senior’s Organization (BCPSO) filed its PACA application in an amount of $32,216.81;

 

G.       On September 7, 2012, the Commercial Class Energy Consumers Association of British Columbia (CEC) filed its PACA application in an amount of $36,090.60;

 

H.       On September 10, 2012, Clean Energy BC (CEBC) filed its PACA application in an amount of $19,980.00;

 

 

I.         On September 14, 2012, the Association of Major Power Customers of British Columbia (AMPC) filed its PACA application in an amount of $53,872.00;

 

J.      By letter dated October 24, 2012, BC Hydro commented on the cost award applications of BCSEA, CEC, BCPSO, AMPC, CEBC, and WMFN;

 

K.     On December 7, 2012, the Commission provided AMPC and WMFN with an opportunity to respond to BC Hydro’s comments on their applications;

 

L.     On December 14, 2012, WMFN and AMPC submitted their comments to the Commission; and

 

M.   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 the PACA applications in the proceeding, as set out in the Reasons for Decision that are attached as Appendix A to this Order.

 

 

NOW THEREFORE pursuant to section 118(1) of the Utilities Commission Act, the Commission approves:

 

1.     Participant Assistance Cost Awards in the following amounts with respect to their participation in the proceeding:

 

 

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

 

 

DATED at the City of Vancouver, in the Province of British Columbia, this       27^th          day of December 2012.

 

                                                                                                                                BY ORDER

                                                                                                                               

                                                                                                                            Original signed by:

 

                                                                                                                                L.A. O’Hara

                                                                                                                                Panel Chair/Commissioner

 

Attachment

 

Applications for Participant Assistance/Cost Awards

British Columbia Hydro and Power Authority

Application for a Certificate of Public Convenience and Necessity

for the Dawson Creek/Chetwynd Area Transmission Project

 

 

REASONS FOR DECISION

___________________________________________________________________________________________

 

 

1.0               INTRODUCTION AND BACKGROUND

 

These Reasons for Decision summarize the Commission’s findings and determinations with regard to the six applications received from Interveners for Participant Assistance/Cost (PACA) funding for their participation in the Dawson Creek/Chetwynd Area Transmission Project proceeding.  In addition, some back ground and the criteria for PACA funding will be provided.

 

On July 11, 2011, British Columbia Hydro and Power Authority (BC Hydro) filed pursuant to section 46(1) of the Utilities Commission Act (the Act), an application for a Certificate of Public Convenience and Necessity (CPCN) to construct and operate the Dawson Creek/Chetwynd Area Transmission Project (DCAT, the Project) as described in the Application, and an Amendment to the Electric Tariff under subsections 58(1) and 61(2) of the Act.

 

By Order G-144-12 dated October 10, 2012, the Commission established conditions for granting a Certificate of Public Convenience and Necessity to BC Hydro for the Project, and denied the proposed changes to the Electric Tariff at this time.

 

As set out in the Order that accompanies these Reasons for Decision, the Commission received six applications pursuant to section 118 of the Act for PACA funding for the DCAT Project proceeding.  Section 118 provides that the Commission Panel may make cost awards for participants in a proceeding.  The Commission’s PACA Guidelines are set out in Appendix A to Order G‑72-07, and include the following provisions:

 

“The Commission Panel will determine whether a Participant is eligible or ineligible for an award.  In determining an award of all or any portion of a Participant’s costs, the Commission Panel will first consider whether the Participant has a substantial interest in a substantial issue in the proceeding.  If this criterion is not met, the Participant will typically not receive a cost award except, possibly, for out-of-pocket disbursement.

 

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.

 

If the Commission Panel considers it to be an appropriate consideration in a proceeding, the Commission Panel may consider the Participant’s ability to participate in the proceeding without an award.”

 

The Commission Panel finds that all Participants have qualified for some funding as they have demonstrated a substantial interest in a substantial issue in this proceeding.

 

2.0          PROCEEDING AND PREPARATION DAYS

 

Section 4 of the PACA Guidelines states that proceeding days may include workshop days, negotiation days, pre-hearing conference days, hearing days, and oral argument days.  The proceeding days for the DCAT Project were:

 

                                            Activity                                                                                        Proceeding Days

 

                BC Hydro Workshop; July 20, 2011                                                                                  0.5

                November 4, 2011 Procedural Conference                                                                    0.5

                May 2, 2012 Procedural Conference                                                                               0.5

                July 9 & 10, 2012 Oral Hearing on First Nation Issues                                                   2.0

                Total Proceeding Days                                                                                                         3.5

 

 

The Guidelines provide that the Commission may award costs for preparation days on a ratio of up to two days per proceeding days, although after the proceeding the Commission may adjust this ratio with adequate justification from participants.  Using this calculation would result in eligibility of 10.5 days for a Participant’s contribution in the proceeding.  The Commission Panel notes in the case of proceedings that are primarily conducted as written hearings this formula may be challenging to use.

 

Specifically in the case of the DCAT Project proceeding, the Commission Panel finds that the standard calculation of preparation days is not particularly helpful for a process that spanned some 12 months, consisted of four rounds of written Information Requests (IRs) and one Panel IR with the addition of a two day oral hearing on First Nations’ issues.  In addition, Interveners were asked to comment on several aspects of the review including: changes to the regulatory timetable, CEC’s request for interim PACA funding, other Intervener IRs, Commission Panel IRs and matters to be addressed in final submission.  After a five month suspension, BC Hydro submitted an update to its Application (Exhibit B-22) which introduced new evidence to the proceeding.  Finally, WMFN and BCPSO were the only participants to the oral hearing while all Interveners attended the workshop and procedural conferences.

 

The Commission Panel considers that Interveners require sufficient funding that allows them to fully address the issues within the scope of the proceeding.  However, the time and effort expended by Interveners must be reasonable, relevant and useful to the Commission.  Because of the different levels of participation in the oral hearing and the complexity of this proceeding, the Commission Panel determines the following three levels of funding days be established as a baseline guide for determining the final award amount.

 

•         Level 1     12 days for Participants that did not attend the oral hearing

•         Level 2     14 days for Participants that attended the oral hearing with minimal participation

•         Level 3     18 days for Participants with a lead role in the oral hearing

 

 

3.0          INDIVIDUAL PACA APPLICATIONS AND AWARD AMOUNTS

 

The Commission Panel has reviewed the PACA applications, considered BC Hydro’s comments and weighed the Participant’s contribution in contributing to a better understanding of the issues before the Commission.  The Panel considers that the existing PACA Guidelines allow flexibility in awarding costs to Interveners that are fair and reasonable.  For instance, a higher number of billed days for legal counsel time may be offset by a lower number of billed days for consultants.  Nonetheless, the Panel remains cognizant that funding awards cannot be without limit and must take into consideration the interests of ratepayers.  Accordingly, the Panel determines that the following amounts of cost awards are awarded to Participants in the DCAT Project proceeding.

 

                3.1          British Columbia Pensioners’ and Seniors’ Organization

 

On September 4, 2012, the British Columbia Pensioners’ and Senior’s Organization (BCPSO) applied for PACA funding for its participation in the proceeding.  BCPSO applied for 14 days of legal counsel fees at a cost of $25,088.00, 5.09 days of consultant fees at a cost of $7,126.00 and disbursements in the amount of $2.81 for a total request of $32,216.81.

 

In its letter dated October 24, 2012, BC Hydro responded that BCPSO fully participated in the Project proceeding and the number of proceeding days identified in its application appears to be reasonable in relation to its level of participation.

Commission Determination

 

BCPSO represents ratepayer groups and participated actively and constructively in the proceeding.  BCPSO attended the Workshop, both Procedural Conferences and the Oral Hearing.  BCPSO’s funding request is also consistent with the PACA Guidelines and its level of contribution to the proceeding.  Therefore, the Commission Panel finds that BCPSO meets all the criteria for PACA reimbursement and awards the full amount of its claim of $32,216.81.

 

                3.2          The Clean Energy Association of British Columbia

 

On September 10, 2012, The Clean Energy Association of British Columbia (CEBC) applied for PACA funding for its participation in the proceeding.  CEBC applied for 5.0 days of legal counsel fees at a cost of $10,080.00 and 7.0 days of consultant fees at a cost of $9,800.00, for a total request of $19,980.00.

 

In its letter dated October 24, 2012, BC Hydro responded that CEBC fully participated in the Project proceeding and the number of proceeding days identified in its application appears to be reasonable in relation to its level of participation.

 

Commission Determination

 

CEBC participated actively and constructively in the proceeding.  CEBC attended the Workshop and both Procedural Conferences.  CEBC’s funding request is also consistent with the PACA Guidelines and its level of contribution to the proceeding.  Therefore, the Commission Panel finds that CEBC meets the criteria for PACA reimbursement and awards the full amount of its claim of $19,980.00.

 

                3.3          Commercial Energy Consumers Association of British Columbia

 

On September 7, 2012, the Commercial Energy Consumers Association of British Columbia (CEC) applied for PACA funding for its participation in the proceeding.  CEC applied for 7.225 days of legal counsel fees at a cost of $14,565.60 and 15.375 days of consultant fees at a cost of $21,525.00, for a total request of $36,090.60.

 

In its letter dated October 24, 2012, BC Hydro responded that CEC fully participated in the Project proceeding and the number of proceeding days identified in its application appears to be reasonable in relation to its level of participation.

 

Commission Determination

 

CEC represents ratepayer groups and participated actively and constructively in the proceeding.  CEC attended the Workshop and both Procedural Conferences.  In addition, CEC was instrumental in attempting to introduce a “non wires” alternative to the Project which was later determined as not viable.  The Panel finds that while the consultant days claimed are above the baseline guideline of 12 days the legal counsel days claimed are below that guideline.  Accordingly, CEC’s funding request is consistent with the PACA Guidelines and its level of contribution to the proceeding.  The Commission Panel determines that CEC meets all the criteria for PACA reimbursement and awards the full amount of its claim for $36,090.60.

 

                3.4          B.C.  Sustainable Energy Association

 

On August 22, 2012, B.C. Sustainable Energy Association and the Sierra Club of British Columbia (BCSEA) applied for PACA funding for its participation in the proceeding.  BCSEA applied for 13.6 days of legal counsel fees at a cost of $27,417.60 and 5.0625 days of case manager fees at a cost of $2,531.25, for a total request of $29,948.85.

 

In its letter dated October 24, 2012, BC Hydro responded that BCSEA fully participated in the Project proceeding and the number of proceeding days identified in its application appears to be reasonable in relation to its level of participation.

 

Commission Determination

 

The Panel notes that the claim for 13.6 days of legal fees is above the 12 day baseline guide for full participation as determined in Section 2.0 above, however there are no charges for a consultant and the charges for a case manager are below the baseline.

 

BCSEA participated actively and constructively in the proceeding.  BCSEA attended the Workshop and both Procedural Conferences.  BCSEA’s funding request is also consistent with the PACA Guidelines and its level of contribution to the proceeding.  The Commission Panel finds that BCSEA meets all the criteria for PACA reimbursement and awards the full amount of its claim for $29,948.85.

 

3.5          The Association of Major Power Customers of British Columbia (AMPC)

 

On September 14, 2012, the Association of Major Power Customers of British Columbia (AMPC) applied for PACA funding for its participation in the proceeding.  APMC applied for 18.5 days of legal counsel fees at a cost of $35,056.00 and 12 days of expert witness fees at a cost of $18,816.00, for a total request of $53,872.00.

 

In its letter dated October 24, 2012, BC Hydro responded that “BC Hydro has reviewed the AMPC PACA Application, and while the rates submitted in their application for cost awards are as prescribed in the PACA Guidelines for legal and expert witness time, BC Hydro believes that the costs included for recovery are higher than they should be.  Although AMPC attended the Project Workshop, it did not ask questions in IR rounds one or two.  AMPC did ask questions in IR rounds three and four.  AMPC attended the procedural workshops on November 4, 2011 and May 2, 2012.  AMPC submitted Direct Evidence of Richard Stout on June 7, 2012, answered questions on its evidence, and submitted a final argument.

 

With respect to the Direct Evidence of Richard Stout, much of the submission addressed the background of Transmission Tariff Supplement No.6 (TS-6), appropriate rate-making theory for transmission service (i.e., rolled-in rates and postage stamp ratemaking), how the use of TS-6 generally may lead to inappropriate price signals to transmission customers, and discussed the differences in treatment between TS-6 and an as yet undefined future rate for the Northwest Transmission Line project.  In Procedural Order G-56-12 issued May 7, 2012, the BCUC found that these and other topics were more appropriately the subject of a B.C. Ministry of Energy and Mines industrial rate review to be held later in 2012, and in BC Hydro's opinion some of the Direct Evidence is therefore out of scope for the Project proceeding.”

 

In its letter dated December 14, 2012, AMPC stated that BC Hydro’s concerns have no merit because of the following:

 

1.       Aspects of AMPC’s evidence were not out of scope.  

 

In reference to the Procedural Order G-56-12 AMPC states “Mr. Stout’s Direct Evidence did not challenge the appropriateness of rolled in/postage stamp principles.  To the contrary, it referred to them as ‘critical factors’ to explain and contextualize the mechanics of TS 6”.  “Having situated TS 6 within this context, Mr. Stout’s evidence then analyzed the application of TS 6 to the DCAT project.”  AMPC also refers to sections 2.7, 8.3 and 8.4 of the Reasons for Decision where the Panel considered the AMPC submissions in relation to TS 6.  Finally, AMPC provides a list of examples of Commission Panel considerations of AMPC positions as an attachment to its submission.

 

2.       The DCAT proceeding involved a number of atypical procedural steps:

 

“The Commission’s request to address additional policy issues caused BC Hydro to take a series of procedural steps following the second round of information requests (IRs).  AMPC’s full participation in these steps pushed its involvement beyond simply the third and fourth round of IR’s, written evidence and argument.  BC Hydro’s application to suspend the hearing schedule, its supplemental evidence, its efforts to end the IR process, and its application to narrow the scope of the hearing in certain areas – areas ultimately unrelated to APMC’s evidence wee its procedural choices.  The consequences of those choices were increase participation on the part of interveners, including AMPC.”

 

Claim and Contribution Analysis

 

The Panel notes the following:

 

•         AMPC’s legal costs of 18.5 days for a partial review are in excess of the baseline guide of 12 days of counsel time as determined in section 2.0 above;

•         The AMPC invoice includes an arithmetic error.  Junior Counsel’s attendance at Pre-hearing conferences for two days @ $1,400 per day should total $2,800, not $7,000.  Accordingly, the total adjusted invoice, including HST, should be $49,168.00.

•         A portion of the legal charges may have been related to the coordination of effort between Junior and Senior counsel; at the same time, out of the rate payer groups, AMPC was the only party submitting evidence which also involved some legal council time;

•         Although AMPC did not submit IRs in rounds 1 and 2, consultant costs are at the 12 day baseline guide level for a full review.  However, APMC did file direct evidence which was prepared by Mr. Stout;

• The Panel agrees with AMPC that its evidence was in scope;
• The Panel also agrees with AMPC that the atypical procedural steps contributed additional legal counsel time; and

•         The claim for Mr. Stout’s expert witness/specialist rate of $1,400/day is typically reserved for preparation and presentation of oral testimony, whereas the $1,250/day rate is applicable for a consultant with 10 or more years of related experience.

 

Commission Determination

 

The Commission Panel has reviewed APMC’s application for PACA funding, considered BC Hydro’s comments on their application and weighed the contribution and relevance of its submissions in contributing to a better understanding of the issues by the Commission.

 

The Commission Panel finds that a reasonable balance for AMPC’s legal costs for a considerable review of the Application and for a significant participation in the atypical procedural steps, with some involvement in the filing of direct evidence amounts to 15 days calculated at 3 days at $1,800 for Senior counsel and 12 days at $1,400 for Junior counsel plus HST for a total of ($5,400+ $16,800) X 1.12= $24,864.00.

 

The Panel finds that the direct evidence presented was in scope and relevant to the issues before the Commission as shown in the Reasons for Decision.  Accordingly, the Panel finds that a reasonable funding for AMPC’s consultant is 12 days at the $1,250/day rate plus HST for a total of ($15,000) X 1.12 = $16,800.00.

 

AMPC participated actively and constructively in the proceeding.  AMPC attended the Workshop and both Procedural Conferences.  AMPC’s funding request is not entirely consistent with the PACA Guidelines and its level of contribution to the proceeding as shown above.  On balance, the Commission Panel awards a reasonable amount of $41,664.00 for AMPC’s participation in the proceeding.

 

3.6          West Moberly First Nation

 

On August 29, 2012, West Moberly First Nation (WMFN) applied for PACA funding for its participation in the proceeding.  WMFN applied for 578.9 hours (72.36 days) of legal counsel fees at a cost of $112,827.50, legal disbursements at a cost of $4,440.49, 11.40 days of consultant fees at a cost of $13,895.00 and $1868.52 for travel disbursements for a total request of $133,031.51.

 

In its letter dated October 24, 2012, BC Hydro responded that “The WMFN participated in the Project Workshop, asked questions in IR rounds one and two, participated in both procedural conferences, led evidence, answered questions on their evidence, and participated in the July 9 and July 10, 2012 Oral Hearing.  The WMFN also submitted a final argument.  BC Hydro has reviewed the PACA Application of the WMFN and notes that while the daily rates are consistent with the PACA Guidelines, the number of proceeding and preparation hours/days included for recovery is approximately three times those of most other Applicants.  While BC Hydro acknowledges that preparing for a hearing requires a greater effort for those panel members subject to cross examination, the amount of hours submitted for recovery appears high.  BC Hydro also notes the WMFN did not ask any questions in IR rounds three or four of the proceeding.  BC Hydro cannot comment on the consultant costs or the legal disbursements included in the WMFN PACA Application, as no details of these charges were provided to BC Hydro.

 

In addition to its participation in most aspects of the hearing, the WMFN also sought a stay of proceedings, which required legal and consulting resources.  BC Hydro questions whether a cost award is intended to cover the costs of an intervener seeking to stay proceedings.  The hearing was ultimately adjourned at the request of BC Hydro to allow for submissions on policy issues raised by the hearing panel in the initial procedural conference.

 

With respect to the intervener Evidence put forward by WMFN, that Evidence mainly pertained to the Impact Assessment Study (lAS), for which BC Hydro provided, separate capacity funding.  BC Hydro is concerned that there may be some overlap in the PACA Application and the funding associated with the lAS.”

 

In its letter dated December 14, 2012, WMFN addressed the concerns raised by BC Hydro as follows:

 

(i)             Number of hours/days included for recovery: WMFN submits that the additional claim “is reflective of the fact that WMFN’s participation in the BCUC process far exceeded that of other Applicants especially given that it was the only intervener that gave evidence in the oral hearing and participated in the flyover of the proposed project area that was requested by the panel.”  “WMFN’s Final Submissions were based on Aboriginal law, considered to be a complex area of law requiring considerable specialized knowledge.”

 

(ii)           Application for Stay of proceedings: “WMFN submits that it is fair and reasonable to include these costs, especially given that BC Hydro ultimately sought an adjournment of the proceeding before WMFN’s application could be hear.  WMFN’s stay application was based on the fact that BC Hydro had not agreed to allow WMFN to conduct an Impact Assessment Study so that it could meaningfully participate in the consultation process.”

 

(iii)          Capacity funding provided to WMFN for the Impact Assessment Study (IAS): “While BC Hydro provided WMFN with capacity funding to conduct the IAS, and the agreement included a line item of $7,500.00 for legal review, WMFN did not submit an invoice for legal review following the completion of the IAS.  As such, the $7,500.00 was not claimed or provided.”

 

Claim and Contribution Analysis

 

The Panel notes the following:

 

•         WMFN limited its focus primarily to First Nations’ issues and marginally addressed other elements of the Application’s review, such as the load forecast and GHGs;

•         WMFN spent excessive time outlining the Applicant’s Duty to Consult and the Commission’s role in assessing same;

•         The daily/hourly fees charged by WMFN’s consultant are in excess of the maximum amount eligible in the PACA Guidelines, specifically by the amount of $2,405.00[1];

•         Some claimed meals for counsel are in excess of the amounts eligible in the PACA Guidelines, however the total amount claimed is less than the receipted amount paid to the hotel;

• WMFN employed four (4) lawyers to review the Application totalling 578.9 hours and the Panel considers that significant effort would be required for coordination of “various phone calls and email exchanges with other legal counsel.”[2]  At the same time, this approach may reduce the average hourly rate;
• WMFN is claiming $3,451.39 related to hotel and conference (> $1000 on banquet room $336, audio visual facilities $351 catering $300 and internet $50) facilities during the oral hearing[3].  Disbursements of this nature are excessive considering the circumstances.
• WMFN participated fully, cooperatively and meaningfully in the hearing process;
• WMFN submitted a substantial Final Argument spanning some 66 pages;
• The WMFN submissions focused on cumulative impact thereby breaking new ground; and
• WMFN claimed no fees for Mr. Bruce Muir or Chief Wilson who testified on behalf of WMFN in the oral hearing.

 

Commission Determination

 

The Commission Panel has reviewed WMFN’s application for PACA funding, considered BC Hydro’s comments on their application and weighed the contribution and relevance of its submissions in contributing to a better understanding of the issues by the Commission.

 

The Panel finds that a reasonable balance for WMFN’s legal costs for a partial and relevant review of the Application is limited to 60 days.  When calculated at an average rate of $1,559.20 per day[4] results in an award of $93,552.00.

 

The Panel finds the amount for legal disbursements claimed at $4,440.49 is excessive in the circumstances due to room rates that are significantly in excess of guidelines, the use of banquet room, audio visuals etc.  Accordingly, the claim is reduced by $1,000 and $3,440.49 is awarded.

 

The Panel finds WMFN’s consultant rates claimed are in excess of the allowable amounts under the Guidelines by $2,405 and awards an amount of $11,490.00.

 

The Panel awards the travel costs for Chief Roland Wilson to attend the oral hearing as claimed at $1,868.52.

 

WMFN partially participated actively and constructively in the proceeding.  WMFN attended the Workshop and both Procedural Conferences.  WMFN’s funding request is not consistent with the PACA Guidelines and its level of contribution to the proceeding.  On balance, the Commission Panel awards a reasonable amount of $110,351.01 for the value of its participation in the proceeding.