IN THE MATTER OF

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

 

and

 

Applications for Participant Assistance/Cost Awards

in the British Columbia Hydro and Power Authority

Application for Approval of Rates between

BC Hydro and FortisBC Inc. with regards to Rate Schedule 3808,
Tariff Supplement No. 3 – Power Purchase and Associated Agreements,
and Tariff Supplement No. 2 to Rate Schedule 3817

 

 

BEFORE:                               L.A. O’Hara, Commissioner

B.A. Magnan, Commissioner                                        July 14, 2014

                                                R.D. Revel, Commissioner

 

O  R  D  E  R

WHEREAS:

 

A.      On May 24, 2013, the British Columbia Hydro and Power Authority (BC Hydro) filed an application with the British Columbia Utilities Commission (Commission) requesting approval, pursuant to sections 58 to 61 of the Utilities Commission Act to, among other things, replace an existing Power Purchase Agreement with FortisBC Inc. (FortisBC) under Rate Schedule 3808 with a New Power Purchase Agreement (New PPA) (RS 3808 Application);

B.      On January 20, 2014, by way of Order F-2-14, the Commission awarded Participant Assistance/Cost Awards (PACA) to the following Interveners for their participation in the proceeding:

 

C.      On December 13, 2013, after the PACA Applications were received, the Commission sought supplemental submissions on certain parts of section 2.5 of the New PPA as they related to FortisBC’s customers with self-generation;

D.      On April 28, 2014, by way of Order F-12-14, the Commission awarded supplemental PACA to the following Interveners:

 

E.       By letter dated April 10, 2014, the Commission sought further supplemental submissions regarding  proposed amendments to section 2.5 of the New PPA made by BC Hydro on April 9, 2014; 

 

F.       By Letter dated April 16, 2014, the Commission established May 5, 2014 as the the deadline for filing further supplemental PACA Applications;

 

G.     The following Interveners filed supplemental PACA Applications:

Intervener	Requested Award
British Columbia Old Age Pensioners Organization	$613.20
Zellstoff Celgar Limited Partnership (Celgar)	$50,676.51
B.C. Sustainable Energy Association et al.	$1,008.00
Commercial Energy Consumers of BC	$1,954.32
TOTAL	$54,252.03

 

H.      On June 12, 2014, the Commission issued a letter to BC Hydro requesting comments on the supplemental PACA Applications;

I.        On June 26, 2014, BC Hydro provided comments on the supplemental PACA Applications stating that it reviewed the supplemental cost claims made by the Applicants and finds that, other than for Celgar, they are substantially consistent with the PACA Guidelines as set out in Order G-72-07, and leaves it to the Commission’s discretion as to the level of cost award; and

J.        The Commission reviewed the supplemental PACA Applications with regard to the criteria and rates set out in the PACA Guidelines and have taken BC Hydro’s comments into consideration.

 

 

NOW THEREFORE for the Reasons for Decision attached as Appendix A, pursuant to section 118(1) of the Utilities Commission Act, the British Columbia Utilities Commission orders as follows:

 

1.         Funding is awarded to the following Interveners for their supplemental participation in the British Columbia Hydro and Power Authority’s Rate Schedule 3808 Application proceeding as follows:

 

Intervener	Award
British Columbia Old Age Pensioners Organization	$613.20
Zellstoff Celgar Limited Partnership	$4,867.50
B.C. Sustainable Energy Association et al.	$1,008.00
Commercial Energy Consumers of BC	$1,042.80
TOTAL	$7,531.50

 

2.         BC Hydro is directed to reimburse the above-noted Interveners for the approved award amount in a timely manner.

 

 

DATED at the City of Vancouver, in the Province of British Columbia, this      14^th         day of July 2014.

 

                                                                                                                                BY ORDER

 

                                                                                                                            Original signed by:

 

                                                                                                                                L.A. O’Hara

Commissioner

Attachment

Applications for Participant Assistance/Cost Awards

in the British Columbia Hydro and Power Authority

Application for Approval of Rates between

BC Hydro and FortisBC Inc. with regards to Rate Schedule 3808,
Tariff Supplement No. 3 – Power Purchase and Associated Agreements,
and Tariff Supplement No. 2 to Rate Schedule 3817

 

1.0               Introduction

The British Columbia Utilities Commission (Commission) Panel reviewed the four Participant Assistance Cost Award (PACA) Applications while taking into consideration the PACA Guidelines, as set out in Commission Order G-72-07, and the British Columbia Hydro and Power Authority’s (BC Hydro) letter, dated June 26, 2014.  BC Hydro’s letter provided the comments and recommendations as outlined below:

 

(i)                  The cost claims relating to the British Columbia Old Age Pensioners Organization et al. (formerly British Columbia Pensioners’ and Seniors’ Organization) (BCOAPO), B.C. Sustainable Energy Association et al (BCSEA), and Commercial Energy Consumers of British Columbia (CEC)are reasonable and substantially consistent with PACA Guidelines;

(ii)                The Zellstoff Celgar Limited Partnership (Celgar’s)PACA Application:

1)      It is significantly greater than the three other PACA Applications and is greater than its original budget for the entire proceeding;

2)      The legal counsel rate of $4,600 per day significantly exceeds the $1,800 maximum established by the PACA Guidelines; and

3)      The claim for the December 13, 2013 submission should be denied as the request was made after the deadline established in the PACA Guidelines.

2.0               Supplemental Submission

By letter dated December 13, 2013 the Commission sought additional submissions on certain matters (December Submission) after the PACA Application filing deadline for the Proceeding had passed.  Accordingly the Commission allowed Interveners to file supplemental PACA Applications regarding this additional phase of the Proceeding. 

 

Although the Commission did not set a deadline for the filing of supplemental PACA Applications, section 2(I) of the PACA Guidelines establishes the deadline to be 30 days after the last day of arguments, which in this case would be March 5, 2014.  BCOAPO and BCSEA filed supplemental PACA Applications by this deadline and were awarded their full claim by way of Order F-12-14.

 

By letter dated April 10, 2014, the Commission sought further submissions on a BC Hydro proposal (April Submission).  The Commission established May 5, 2014 as the deadline for filing supplemental PACA Applications for this second additional phase of the proceeding. 

 

BCOAPO and BCSEA filed a further supplemental PACA Application for the April submission, while CEC and Celgar filed supplemental PACA Applications both the December and April Submissions. 

 

The currents supplemental PACA Applications (as updated[1]) and supplemental PACA Awards are as follows:

		BCOAPO		CEC	BCSEA	Celgar
December Submission		$                        1,746.15		$                911.52	$             1,003.28	$        37,502.50
April Submission		$                           613.30		$            1,042.80	$             1,008.00	$        13,247.50
Award pursuant to Order F-12-14		1,746.15		-	1,003.28
Current Claim		$                           613.30		$            1,954.32	$             1,008.00	$        50,750.00

 

Commission Determination

 

The Panel is in agreement with BC Hydro that any claim for the December Submission should be denied as the request was made after the 30 day deadline established by the PACA Guidelines.  Accordingly the Panel will not award CEC or Celgar any award relating to the December Submission. 

3.0               ADJUSTMENTS TO INDIVIDUAL PACA APPLICATION AMOUNTS

3.1               BCOAPO, BCSEA and CEC

BCOAPO and BCSEA supplemental PACA Applications are within the PACA Guidelines and no concerns were raised by BC Hydro.  Therefore, the Panel is awarding each of these Interveners the full amount of their supplemental PACA request.  

No concerns were raised by BC Hydro regarding CEC’s supplemental PACA Application which was within the PACA Guidelines other than for filing December Submission claim past the deadline.  Given that the Panel has determined that CEC will not receive an award relating to the December Submission CEC’s claim is being reduced by $911.52[2] to $1,042.80.

3.2               Celgar

3.2.1          PACA Budget

By letter dated June 14, 2013, Celgar initially submitted a PACA budget of $65,500.00 for participation in the entire proceeding.  By way of letter dated July 19, 2013, Commission staff informed Celgar that the PACA Guidelines state that except in limited circumstances, it is expected that only ratepayer groups would be eligible for PACA funding.

 

Staff informed Celgar that although it is not a ratepayer group, it has in the past been determined to be eligible for PACA funding when it actively participated in a proceeding.  Therefore, staff informed Celgar that they would be eligible for PACA funding if their participation led to a better understanding of the issues by the Commission.  However, staff also informed Celgar that the Commission Panel will make the final determination and will likely also consider if the costs incurred by Celgar are reasonable and may also consider Celgar’s ability to participate without an award.  In the past, the Commission has typically interpreted the criteria in the PACA Guidelines to mean that it will not fund individuals, individual business interests or municipalities, except under unusual circumstances.  Commission staff also advised Celgar, that any PACA award to Celgar would likely be reduced by the amount of the award to the Industrial Customer Group (ICG) for the proceeding.    

 

Celgar did not submit a PACA application for the proceeding as ICG was awarded $26,253.63 of PACA funding by way of Order F-2-14.

3.2.2          Supplemental PACA

On May 5, 2014, Celgar filed a PACA Application requesting an award of $50,676.51 relating exclusively to the December and April Submission.[3]  As the supplemental PACA Application provided very little detail regarding the calculation of the requested award the Commission issued a letter to Celgar on May 9, 2014, requesting further information.  On May 15, 2014, Celgar responded and submitted a letter providing supporting documentation for its claim and updated the request.  The following table attempts to detail Celgar’s updated supplemental PACA Application; however from the information filed the exact amount being claimed is not clear.

 

3.2.3          December Submission

The Panel had difficulty in determining the allocation of the PACA claim between the December and April Submissions.  The Commission letter sent to Celgar on May 9, 2014, requested that Celgar, among other things, separate the claim between the December Submission and the April Submission.  In the body of the response letter, Celgar explained that for Legal Fees 58 percent of the time, or 5.22 days, related to the December Submission and 42 percent, or 3.78 days, relate to the April Submission.  However the detailed hours reported by Celgar in the same response letter shows 51.5 hours (72 percent), or 6.44 days, for the December Submission and 20.0 hours (28 percent), or 2.5 days, for the April Submission.

The Panel finds the allocation based on the number of hours provides a better estimate than the simple percent allocation.  The hours spent allocation is validated by the dates on the supporting invoices.  Although the supporting invoices did not break down the time spent by detailed task they did breakdown the months in which the work was performed, which the Panel considered sufficiently informative for allocating 51.5 hours in legal fees to the December Submission. 

The Panel does not have any issues with the breakdown provided for the Consultant and accepts Celgar’s breakdown of 92 percent for the December Submission and 8 percent for the April Submission. 

Given that the Panel has determined that Celgar will not receive an award relating to the December Submission Celgar’s claim for the December Submission of $37,502.50 (including tax) is denied.

3.2.4          April Submission

Celgar’s April Submission is for $33,247.50, whereas the next highest April Submission request is only $1,042.80.  The main reason for the higher amount is due to Celgar requesting recovery of 2.5 legal counsel days while none of the other Interveners requested recovery of more than one legal counsel day.  Further, Celgar’s claim, as highlighted by BC Hydro in its June 26, 2014 letter, includes a legal counsel rate of $4,600 per day which far exceeds the maximum allowable of $1,800 as outlined in the PACA Guidelines.

Commission Determination on Eligibility

In addition to the “substantial interest in a substantial issue” test the Commission Panel will 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 purpose 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 reasonable diligence.)

(vi)              Any other matters appropriate in the circumstances. 
(Order G-72-07, Appendix A, page 1)

 

Section 1 of the PACA Guidelines also state “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.”  This could, if applied to Celgar, disqualify them from PACA funding entirely.  The Panel notes that Celgar is a for-profit company, one of the largest of its kind and has the means to participate without an award.

 

A review of past PACA awards to Celgar shows the following:

•                     On December 14, 2014, the Panel awarded Celgar $73,451.49 for its participation as a ratepayer in the FortisBC 2009 Rate Design and Cost of Service Analysis Application (applied for $152,745.00).  The Panel accepted “…Celgar’s assertion that it has significant interest in the RDA as it was the only customer in RS33 and took specific exception to FortisBC’s proposed allocation of certain costs to that customer class.”  However, the Panel found that:

“… the establishment of a GBL between it and FortisBC would have benefitted Celgar and would have been unlikely to benefit FortisBC’s other customers, and for this reason the Commission Panel considers that the funds Celgar expended to make its case before the Commission should be for its account alone and should not be borne by all FortisBC’s other customers.” 

This was the key reason for the significant reduction in the award.  (Order F-31-10, Appendix A, page 6);

•                     On November 27, 2013, the Panel awarded Celgar $32,704.57 for its participation in Phase 2 of Purchase of the Utility Assets of City of Kelowna CPCN (100 percent of the applied amount) as it found the requested amount reasonable; and

•                     There have also been other applications in the FortisBC service territory where Celgar participated but did not apply for PACA funding, such as filing for Guidelines for Establishing Entitlement to Non-PPA Embedded Cost Power and Matching Methodology (Order F-3-13).

 

The Panel finds that Celgar has a significant interest in RS 3808, section 2.5 of the New PPA in particular, as a FortisBC customers with self-generation that would be affected.  The Panel accepts that Celgar could be negatively affected without its participation.  Accordingly, the Commission Panel determines that Celgar has contributed to a better understanding of the issues by the Commission and is therefore eligible to some level of PACA funding even if it might be able to participate without an award.  However, the Panel emphasizes that this ruling should not be considered precedent setting.  Each case for a for-profit company like Celgar will be considered on its own merits.

 

Given that the Panel has determined that Celgar is eligible for PACA funding the Panel will look more closely at the requested claim for the April Submission.

3.2.5          Number of Proceeding Days

Celgar is requesting recovery of 2.5 legal counsel days for the April Submission while none of the other Interveners requested recovery of more than one legal counsel day.

 

Commission  Determination

 

The Panel notes that Celgar has a more vested interest in the matters relating to the supplemental submissions sought by the Commission and notes that Celgar’s submissions were noticeably more detailed and lengthy than those by the other participants.  Further, they did lead to a better understanding of the issues by the Panel.  Accordingly, the Panel approves an award for 2.5 legal counsel days and 0.31 consultant days relating to the April Submission.

3.2.6          Daily Rate

The PACA Guidelines allow a maximum rate of $1,800 for each legal counsel day.  Celgar states in its supplemental PACA Application that it is aware that the legal counsel’s rate exceeds the maximums set forth in the Commission’s PACA Guidelines; however, Celgar employed another counsel who billed a similar number of hours on the submissions.  Celgar submits that it would be appropriate in those circumstances to exceed the daily maximum set in the PACA Guidelines.

 

Commission Determination

 

The Panel agrees with BC Hydro that the Commission should only approve a rate of $1,800, which the maximum allowed.  Celgar’s PACA budget filed on June 14, 2013 set a legal counsel rate at $1,800 and nowhere prior to filing its supplemental PACA Application did Celgar indicated that it was anticipating exceeding this rate.  Furthermore, there is no provision within the PACA Guidelines to exceed the maximum allowable amount of $1,800[4]. Accordingly, the Panel will award the maximum allowable rate per legal counsel day of $1,800.  The Panel does not have any concerns regarding the daily rate of $1,120 for Celgar’s consultant.

3.2.7          GST and PST

Celgar is requesting recovery of $1,380.00 in GST and PST for legal counsel fees and $17.50 in GST for consultant fees. 

 

Commission  Determination

 

The Panel has reviewed the supporting invoices provided by Celgar and notes that the legal counsel invoices do not include any charge for GST or PST.  Accordingly, the Commission is disallowing recover of GST and PST on legal fees.

3.2.8          Celgar Final supplemental PACA Award

As noted by BC Hydro in its June 26, 2014 letter, Celgar’s supplemental PACA Application is not within all the Guidelines set by Order G-72-07 and the requested award is considerably higher than the other PACA award requests.  For the reasons stated above, Celgar’s final approved supplemental PACA Award, as detailed below, is $4,867.50.