LETTER L-20-16
Via Email
gas.regulatory.affairs@fortisbc.com August 4, 2016
Ms. Diane Roy
Director, Regulatory Services
FortisBC Energy Inc.
16705 Fraser Highway
Surrey, BC V4N 0E8
Dear Ms. Roy:
Re: FortisBC Energy Inc.
2016/17 Annual Contracting Plan (November 2016-October 2017)
On May 2, 2016, FortisBC Energy Inc. (FEI) filed on a confidential basis its 2016/17 Annual Contracting Plan (2016/17 ACP). On June 23, 2016 FEI filed an update to the 2016/17 ACP. The British Columbia Utilities Commission (Commission) accepts the FEI 2016/17 ACP and the recommendations as summarized on pages 8 to 10 as well as the June 23, 2016 update.
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 2016/17 of 1,316 TJ/day, a decrease of 4 TJ/d from the amounts approved in the 2015/16 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 2016/17 is projected at approximately 121 PJ resulting in an average daily normal load of 331 TJ/d. In 2015/16, the total annual normal demand was forecast to be 123 PJ resulting in a daily normal load of 335 TJ/d. The decrease of 4 TJ/d 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 3 TJ/d and AECO/NIT baseload supply decreases by 1 TJ/d, which is due to the forecast reduction in peak day and normal demand supply requirements.
4. Commodity Portfolio: Commodity Providers’ fuel requirements for gas delivery on November 1, 2016 will be evaluated and communicated before October 2016. For the period November 1, 2015 to October 31, 2016 the fuel percentages are 4% at Station 2 and 1% 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. Commodity and Midstream Portfolio: FEI recommends releasing a portion of its Spectra T-South pipeline capacity to customers currently under the transportation service model for the 2016/17 gas year.
8. Commodity and Midstream Portfolio: FEI recommends term purchases at Station 2 out to the 2019/20 gas year in the interest of pricing diversity and supply security at Station 2.
9. Midstream Portfolio: Maintain existing physical resources for the 2016/17 gas year, which includes storage, and transportation capacity on Spectra’s T-South and T-North, TransCanada’s NGTL and FoothillsBC system, and Northwest Pipeline’s system.
On June 23, 2016, FEI filed an update to the 2016/17 ACP with further details on its plans to release a portion of its Spectra T-South pipeline capacity to transportation service customers for the 2016/17 gas year and provided a revised copy of the non-confidential Executive Summary.
The Commission requests FEI to file its 2017/18 ACP by May 1, 2017. In addition, the Commission requests FEI to include the following information in the 2017/18 ACP:
• 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 2016/17 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 2017/18 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 2017/18 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.
FEI is requested to file, for information purposes, a report summarizing the process and the outcome of its plans to release a portion of its Spectra T-South pipeline capacity to transportation service customers for the 2016/17 gas year within 30 days of completing the release.
Exclusive of the non-confidential Executive Summary, the Commission agrees to hold the 2016/17 Annual Contracting Plan including the June 23, 2106 update confidential as it contains commercially sensitive information. A copy of FEI’s non-confidential Executive Summary for the FEI 2016/17 Annual Contracting Plan, as revised in FEI’s June 23, 2016 update, is attached and is available for public review.
Yours truly,
Original signed by:
Laurel Ross
CM/cms
Enclosure