Sixth floor, 900 Howe Street Vancouver, BC Canada V6Z 2N3 TEL: (604) 660-4700 BC Toll Free: 1-800-663-1385 FAX: (604) 660-1102 ORDER NUMBER G-39-17 IN THE MATTER OF the Utilities Commission Act, RSBC 1996, Chapter 473 and British Columbia Hydro and Power Authority F2017 to F2019 Revenue Requirements Application BEFORE: D. M. Morton, Commissioner / Panel Chair D. J. Enns, Commissioner K. A. Keilty, Commissioner on March 16, 2017 ORDER WHEREAS: A. British Columbia Hydro and Power Authority (BC Hydro) filed on February 26, 2016 an application with the British Columbia Utilities Commission (Commission) seeking an interim refundable rate increase of 4.0 percent in Fiscal 2017, pursuant to section 9(1) of Direction No. 7 to the Commission (Direction No. 7) and sections 58 to 60, 89 and 90 of the Utilities Commission Act (UCA); B. On March 22, 2016, by Order G-40-16, the Commission approved the Fiscal 2017 interim and refundable rate increase effective April 1, 2016; C. On July 28, 2016, BC Hydro submitted its Fiscal 2017 to Fiscal 2019 Revenue Requirements Application (RRA) requesting, among other things, final approval to increase rates by an average of 4.0 percent effective April 1, 2016 (F2017), 3.5 percent effective April 1, 2017 (F2018) and 3.0 percent effective April 1, 2018 (F2019); D. The RRA proceeding is ongoing and to date there have been two rounds of information requests (IRs) to BC Hydro on the RRA, and one round of IRs to the interveners on intervener evidence; E. On March 1, 2017, BC Hydro filed an application for approval of a Fiscal 2018 interim refundable rate increase of 3.5 percent effective April 1, 2017 (F2018 Interim Rates Application), marked as Exhibit B-17 in the RRA proceeding, pursuant to Direction No. 7 and sections 58 to 60, 89 and 90 of the UCA; F. In the F2018 Interim Rates Application BC Hydro states that the requested interim rate increase reflects the rate cap specified in Direction No. 7. The evidence in the RRA and responses to IRs support a Fiscal 2018 rate increase of 5.0 percent in the absence of a rate cap; G. The Commission has considered the F2018 Interim Rates Application and determines that approval of interim rates is warranted. …/2
Order G-39-17 Page 2 of 2 NOW THEREFORE, for the reasons set out in Appendix A to this order, pursuant to sections 58 to 60, 89 and 90 of the Utilities Commission Act, the British Columbia Utilities Commission orders as follows: 1. Approval of a 3.5 percent interim rate increase in British Columbia Hydro and Power Authority’s (BC Hydro) rates effective April 1, 2017, applied as set out in Appendix B of the F2018 Interim Rates Application and reflected on the rate schedules filed in Appendix C of the F2018 Interim Rates Application. 2. The rates approved by this order will remain interim until further order of the British Columbia Utilities Commission and are subject to refund with interest at BC Hydro’s weighted average cost of debt. 3. BC Hydro must provide customers with notification of the interim rate increase as soon as is practicable. DATED at the City of Vancouver, in the Province of British Columbia, this 16 th day of March 2017. BY ORDER Original signed by: D. M. Morton Commissioner Attachments Orders/G-39-17_BCH_F2017-19 RRA_Interim Rates
APPENDIX A to Order G-39-17 Page 1 of 1 British Columbia Hydro and Power Authority F2017 to F2019 Revenue Requirements Application REASONS FOR DECISION The following reasons provide rationale for the Panel’s acceptance of British Columbia Hydro and Power Authority’s (BC Hydro) application for approval of an interim refundable rate increase of 3.5 percent effective April 1, 2017 (F2018 Interim Rates Application) and why an external process was not deemed necessary. In 2014, the Province of British Columbia issued Order in Council No. 095/2014 which established a new regulatory framework regarding the British Columbia Utilities Commission’s (Commission) oversight of BC Hydro’s rates through Direction No. 6 and Direction No. 7 to the Commission. Direction No. 7 applies to Commission regulation going forward. Section 4 of Direction No. 7 requires the Commission to ensure that in regulating and setting rates for BC Hydro that those rates allow the utility to collect sufficient revenue in each fiscal year to provide reliable electricity service, meet its financial obligations, and comply with government policy directives. A copy of Direction No. 7 is attached as Appendix B. Section 9(1) of Direction No. 7 requires that BC Hydro’s rates for Fiscal 2018 must not be increased by more than 3.5 percent, on average (rate cap), and the Commission must order BC Hydro to defer to the Rate Smoothing Regulatory Account the portion of the Fiscal 2018 revenue requirement that is forecast not to be recovered by the rate cap. Section 10 of Direction No. 7 requires that the deferral account rate rider remain at 5 percent. On July 28, 2016, pursuant to Direction No. 7, BC Hydro filed its Fiscal 2017 to Fiscal 2019 Revenue Requirements Application (RRA) requesting, among other things, final approval to increase rates by an average of 4.0 percent effective April 1, 2016, 3.5 percent effective April 1, 2017 and 3.0 percent effective April 1, 2018. On March 1, 2017, BC Hydro filed the F2018 Interim Rates Application, marked as Exhibit B-17 in the RRA proceeding, pursuant to section 9(1) of Direction No. 7 and sections 58 to 60, 89 and 90 of the Utilities Commission Act. In the F2018 Interim Rates Application, BC Hydro submits that the interim refundable rate increase of 3.5 percent reflects the rate cap specified in Direction No. 7 for Fiscal 2018. BC Hydro further submits that there is a considerable volume of evidence set out in the RRA and responses to information requests establishing that BC Hydro’s Fiscal 2018 revenue requirement exceeds the legislated rate caps for the test period and in the absence of Direction No. 7, BC Hydro would need a rate increase of 5.0 percent effective April 1, 2017. Commission determination The Panel approves a 3.5 percent interim rate increase effective April 1, 2017, applied as set out in Appendix B of the F2018 Interim Rates Application and reflected on the rate schedules filed in Appendix C of the F2018 Interim Rates Application. The Panel considers there to be sufficient prima facie evidence to justify the Fiscal 2018 interim rate increase. In considering whether to solicit submissions on BC Hydro’s request for interim rates, the Panel considered the evidence filed in BC Hydro’s RRA and responses to the information requests supporting a Fiscal 2018 rate increase of 5.0 percent, as well as Direction No. 7 that limits any Fiscal 2018 rate increase to 3.5 percent and finds that in the interest of regulatory efficiency, no further process is warranted in this matter of setting an interim rate.
APPENDIX B to Order G-39-17 Page 1 of 17
APPENDIX B to Order G-39-17 Page 2 of 17
APPENDIX B to Order G-39-17 Page 3 of 17
APPENDIX B to Order G-39-17 Page 4 of 17
APPENDIX B to Order G-39-17 Page 5 of 17
APPENDIX B to Order G-39-17 Page 6 of 17
APPENDIX B to Order G-39-17 Page 7 of 17
APPENDIX B to Order G-39-17 Page 8 of 17
APPENDIX B to Order G-39-17 Page 9 of 17
APPENDIX B to Order G-39-17 Page 10 of 17
APPENDIX B to Order G-39-17 Page 11 of 17
APPENDIX B to Order G-39-17 Page 12 of 17
APPENDIX B to Order G-39-17 Page 13 of 17
APPENDIX B to Order G-39-17 Page 14 of 17
APPENDIX B to Order G-39-17 Page 15 of 17
APPENDIX B to Order G-39-17 Page 16 of 17
APPENDIX B to Order G-39-17 Page 17 of 17
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.