Via Email June 15, 2012
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BC Hydro – Dawson Creek/Chetwynd Transmission Project CPCN Exhibit A-31 |
TO: Ms. Janet Fraser Registered Interveners
Chief Regulatory Officer (BCH-DC/Cat-RI)
British Columbia Hydro and Power Authority
(bchydroregulatorygroup@bchydro.com)
Re: British Columbia Hydro and Power Authority
Project No. 3698640/Order G-132-11
Certificate of Public Convenience and Necessity Application
for the Dawson Creek/Chetwynd Area Transmission Project
Specific Matters Relating to Electric Tariff No. 6 to be Addressed in Final Submissions
The British Columbia Utilities Commission (Commission) requests that Participants address the following specific matters in their Final Submissions to the Dawson Creek/Chetwynd Area Transmission Project (DCAT Application or the Application).
Background
The British Columbia Hydro and Power Authority’s (BC Hydro) Electric Tariff Supplement No. 6 (TS 6) was approved by the Commission in 1991, by Order G-4-91. Subsequently, in 1996, by Order G-80-96, the Commission issued the Utility System Extension Test Guidelines (Guidelines) (Exhibit A2-2). The Guidelines were the result of a generic oral hearing, initiated by the Commission after receiving applications from several utilities on issues related to system extensions.
The following six utilities participated in the hearing:
1. BC Hydro;
2. West Kootenay Power Ltd.;
3. BC Gas Utility Ltd.;
4. Centra Gas British Columbia Inc.;
5. Princeton Light and Power Company, Limited;
6. Pacific Northern Gas Ltd.
No changes were made to TS 6 as a result of the issuance of the Guidelines.
Specific Matters to Address in Final Submissions
1. Should the Guidelines apply to TS 6? If so, does TS 6 reasonably reflect the Guidelines?
2. The Guidelines recommend that, as a general principle, the costs and benefits to be considered in the analysis of proposed system extensions include “…net revenues from the system extension (i.e. customer payments less revenues to provide for commodity purchases and upstream transmission charges).” (p. 32)
2.1 How does this section of the Guidelines apply to the determination of the Maximum Offset as calculated in TS 6, Appendix 1, clause 5(c)(ii)?
2.2 Assuming it is applicable, what is an appropriate cost for commodity purchases and upstream transmission charges to use in the calculation of the Maximum Offset?
3. TS 6, Appendix 1, clause 2 defines System Reinforcement such that it does not include any “additions or alterations to generation plant and associated transmission, or transmission lines at 500 kV and over,” unless the new or incremental loads exceed 150 MV.A.
BC Hydro states that “System Reinforcement includes all costs BC Hydro will need to incur to permit its transmission system to provide service. It does not include any incremental generation costs incurred to provide service unless the customer load exceeds 150 MV.A. None of the DCAT Project customers has a load exceeding 150 MV.A.” (Exhibit B-22, Q 102)
3.1 TS 6 states “additions or alterations to generation plant” while BC Hydro refers to it as “any incremental generation costs.” Do “additions or alteration to generation plant” and/or “incremental generation costs” include costs for all potential sources of supply including the incremental costs to obtain electric energy from Independent Power Producers if required?
3.2 Would it be appropriate to aggregate the five new customers identified in the Application for the purpose of interpreting the definition of System Reinforcement in TS 6, Appendix 1, clause 2, and consequently the inclusion of any “additions or alterations to generation plant” and/or “incremental generation” costs incurred to provide service to the new customer in the System Reinforcement calculation?
3.3 Assuming it is appropriate to aggregate the five customers identified in the Application, what would the appropriate cost be for of any “additions or alterations to generation plant” and/or “incremental generation” costs incurred to provide service to the new customers?
4. TS 6, Appendix 1, clause 5(c)(ii) requires that the “first year of normal operation” be used to calculate the estimated incremental revenue and incremental operating and maintenance expenses. The System Extension Guidelines state that “... where customer contributions are required, the Commission recommends that the utilities develop a policy which requires at a minimum all customers who attach within the first five years to contribute to system extensions.” (p. 26) The Systems Reinforcement definition in TS 6, Appendix 1, clause 2 does not specify a period of time for determining the 150 MV.A load threshold.
4.1 What period of time would be appropriate to ascertain if the 150 MV.A threshold is met; the first year of normal operations, the largest forecast load within five years of the system reinforcement being complete, the full 30-year forecast, or some other point/range of time?
5. When interpreting System Reinforcement in TS 6, Appendix 1, clause 2, should any subsequent reinforcement costs to the transmission system, such as the F2016 Stage GDAT Project (which is required to provide N-1 service to the new customers) be considered?
5.1 Assuming yes, how should the costs of these subsequent reinforcements be determined in the absence of firm project estimates?
6. TS 6, Appendix 1, clause 3(a) states that it is the primary responsibility of the Customer to establish that the provision of electrical service by BC Hydro to the Customer’s Plant, is in the public interest.
6.1 Have the five customers demonstrated that the system reinforcement is in the public interest?
6.2 What public interest issues should the Commission consider in the application of TS 6 in this proceeding?
6.2.1 Should consideration be given to the total rate impact including the incremental capital and operating costs associated with the project, plus any cost of energy to service the incremental customer loads, or should consideration be limited to the rate impact caused by the incremental capital and operating costs only?
6.2.2 Should consideration be limited to the DCAT Project or should consideration also be given to the 2016 Stage GDAT Project which is required to provide N-1 service.
7. Any other issue related to the Guidelines or the interpretation of TS 6 that may be applicable to the DCAT proceeding.
Yours truly,
Erica Hamilton
CM/yl