Via Email
gas.regulatory.affairs@fortisbc.com June 12, 2014
Mr. Grant Bierlmeier
FortisBC Alternative Energy Services Inc.
3700 2nd Avenue
Vancouver, BC V5C 6S4
Dear Mr. Bierlmeier:
Re: Generic Cost of Capital Proceeding (Stage 2) Decision and Order G-47-14
FortisBC Alternative Energy Services Inc. Compliance Filing
for the Kelowna District Energy System
The Commission is in receipt of a letter filed by the FortisBC Alternative Energy Services (FAES) on behalf of the Kelowna District Energy system (KDES) dated May 2, 2014, in response to Order G-47-14 which was issued concurrently with the Generic Cost of Capital (Stage 2) Decision dated March 25, 2014.
The Order established, among other things, an allowed default common equity component of 42.5 percent and an equity risk premium of 75 basis points for thermal energy system Stream B projects, effective January 1, 2013. Directive 6 directed KDES to file a document setting out: (a) whether it would implement the minimum default capital structure and equity risk premium for rate setting, and if so, the time line; or (b) whether it would let the existing contractual customer rates, if applicable, take their course, and if not, its proposed treatment of the difference between the current rates being charged to the customers and the allowed rates as determined by the Order.
The Commission finds FAES’s response to Directive 6 to be in compliance with Order G-47-14.
Yours truly,
Erica Hamilton
EC/dg