Via E-Mail July 9, 2015
gas.regulatory.affairs@fortisbc.com
Ms. Diane Roy
Director, Regulatory Affairs
FortisBC Energy Inc.
16705 Fraser Highway
Surrey, BC V4N 0E8
Dear Ms. Roy:
Re: FortisBC Energy Inc.
2015/16 Annual Contracting Plan (November 2015 – October 2016)
On May 1, 2015, FortisBC Energy Inc. (FEI) filed on a confidential basis its 2015/16 Annual Contracting Plan (2015/16 ACP). The British Columbia Utilities Commission (Commission) accepts the FEI 2015/16 ACP and FEI’s recommendations as set out on pages 8 to 10 in regard to the peak day load, commodity portfolio, midstream resources, actions prior to submitting the 2016/17 ACP and ongoing portfolio evaluation.
The major portfolio changes affecting the FEI 2015/16 ACP are as follows:
1. Forecast Design Peak Day Demand: FEI recommends a peak day value for 2015/16 of 1,320 TJ/day, a decrease of 2 TJ/day from the amounts accepted in the 2014/15 ACP. The reduction in the design peak day is mainly attributable to a continued decline in the forecast use per customer.
2. Annual Normal Demand: annual normal demand for 2015/16 is projected at approximately 123 PJ resulting in an average daily normal load of 335 TJ/day. In 2014/15, the total annual normal demand was forecast to be 126 PJ that resulted in a daily normal load of 345 TJ/day. The decrease of 10 TJ/day in 2015/16 in the annual normal load is mainly attributable to the continued decline in forecast use per customer.
3. Commodity Portfolio: Station 2 baseload supply decreases by 8 TJ/day and AECO/NIT baseload supply decreases by 2 TJ/day, which is mainly attributable to the continued decline in forecast use per customer.
4. Commodity Portfolio: Commodity Providers’ fuel requirements for gas delivery on November 1, 2015 will be evaluated and communicated before October 2015. For the period November 1, 2014 to October 31, 2015 the fuel percentages are 3.1% at Station 2 and 1.0% at AECO.
5. Commodity Portfolio: FEI recommends continuing with a balanced mix of daily and monthly priced supply to provide operating flexibility and to mitigate adverse price movements.
6. Commodity Portfolio: FEI recommends consideration of longer term supply contracts with BC gas producers, up to ten years in length, in the interest of supply security at the Station 2 market hub.
7. Midstream Portfolio: adjust seasonal supply to account for the changes in market conditions, decrease in forecast peak day demand, and in the interests of meeting the objectives of the ACP.
The Commission requests FEI file its 2016/17 ACP by May 1, 2016. In addition to the items in section 2.2.1 of the 2015/16 ACP entitled “Actions Prior to Submitting the 2016/17 ACP,” the Commission requests FEI to file, with the 2016/17 ACP, the following information:
• An update to the Northeastern BC market study with the scope and detail of the update to be determined by FEI.
• An update on the efforts to establish key relationships with producers who plan to develop supply in the Horn River, Montney and other producing regions of British Columbia over the long term.
• A review and analysis of the operational experience with Mt. Hayes and Tilbury liquefied natural gas (LNG) peaking resources for the 2015/16 contract year, including an analysis of the potential impact of LNG service under Rate Schedule 46 service on the availability of these peaking resources for the core natural gas customers for the 2016/17 and future years.
• A load forecast for Rate Schedule 46 customers, the supply arrangements for meeting these customer’s load requirements and FEI’s plan for integrating this demand into the overall supply portfolio.
• A review of the storage and transportation requirements and alternatives for the 2016/17 and future contract years and an analysis to optimize the amounts of transportation and storage to be contracted in future years taking into account the regional infrastructure and market developments currently in place and anticipated to be in place in the future.
Exclusive of the non-confidential Executive Summary, the Commission agrees to hold the 2015/16 Annual Contracting Plan confidential. A copy of FEI’s non-confidential Executive Summary for the FEI 2015/16 Annual Contracting Plan is attached and is available for public review.
Yours truly,
Erica Hamilton
CM/cms
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