Orders

ORDER NUMBER

G-191-17

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

Pacific Northern Gas Ltd.

2018–2019 Revenue Requirements Application

BEFORE:

D.A. Cote, Commissioner/Panel Chair

B.A. Magnan, Commissioner

on December 19, 2017

ORDER

WHEREAS:

A.      On November 30, 2017, Pacific Northern Gas Ltd. (PNG) filed its 2018–2019 Revenue Requirements Application (RRA) for the West Division with the Commission pursuant to sections 58 to 61 of the Utilities Commission Act (UCA) seeking approval to, among other things, increase 2018 delivery rates (Application);

B.      In its Application, PNG seeks an order granting relief pursuant to sections 58 to 61, 89 and 90 of the UCA to allow PNG to amend its delivery rates and Revenue Stabilization Adjustment Mechanism (RSAM) on an interim and refundable/recoverable basis, effective January 1, 2018, pending the regulatory process for the review of the Application and orders subsequent to this process;

C.      PNG forecasts a 2018 revenue deficiency of approximately $0.481 million comprised of a net increase in cost of service of $0.552 million and an increase in margin of $0.071 million. The net increase in cost of service includes a proposed rate deferral mechanism to level the combined rate changes anticipated for test years 2018 and 2019 over the two-year period;

D.      PNG is seeking approval to increase delivery rates on an interim and refundable/recoverable basis to cover the forecast 2018 revenue deficiency for the following rate classes, among other rate classes:

1.       1.5 percent increase from $12.372/GJ to $12.557/GJ for Residential service;

2.       1.4 percent increase from $10.416/GJ to $10.562/GJ for Small Commercial service; and

3.       1.9 percent increase from $7.090/GJ to $7.222/GJ for Granisle Propane service;

PNG is also seeking approval for a decrease in the RSAM rate rider on an interim and refundable/recoverable basis applicable to Residential, Small Commercial and Commercial Transport customers from $1.656/GJ to $0.551/GJ;

E.       PNG submits in its Application that it will seek approval of permanent 2018 and 2019 rates in the Amended Application to be filed at the end of February 2018;

F.       PNG proposes a written hearing process for the review of the Application; and

G.      The Commission has commenced review of the Application and finds that establishment of interim rates and a regulatory timetable is warranted.

NOW THEREFORE pursuant to sections 58 to 61, 89 and 90 of the Utilities Commission Act the Commission orders as follows:

1.       The delivery rates and the Rate Stabilization Adjustment Mechanism rider set forth in the Application are approved on an interim basis, effective January 1, 2018. Any differences between the interim and permanent rates that are determined by the Commission following final disposition of the Application are subject to refund/recovery, with interest at the average prime rate of Pacific Northern Gas Ltd.’s principal bank for its most recent year, in the manner as set out by a Commission order that establishes permanent rates.

2.       The preliminary Regulatory Timetable for the review of the Application is established, as set out in Appendix A to this order.

3.       Interveners and interested parties who wish to participate in the regulatory proceeding are to register with the Commission by completing a Request to Intervene Form, available on the Commission’s website, by the date established in the preliminary Regulatory Timetable attached as Appendix A to this order. Those requesting intervener status are to specifically state the nature of their interest in the Application and identify generally the issues that they intend to pursue and the extent of their anticipated involvement in the proceeding.

4.       Pacific Northern Gas Ltd. is to provide a copy, electronically where possible, of this Commission order and accompanying appendices, to all parties who registered as interveners in the 2016–2017 Revenue Requirements Application for the Pacific Northern Gas Ltd. PNG-West Service Area.

5.       The Application and supporting materials are to be made available for inspection at the following locations: public libraries in Prince Rupert, Terrace, Kitimat, Houston, Smithers, Burns Lake, Vanderhoof and Fort St. James; the head office of Pacific Northern Gas Ltd. at Suite 2550, 1066 West Hastings Street, Vancouver, BC, V6E 3X2; and the British Columbia Utilities Commission office at Suite 410, 900 Howe Street, Vancouver, BC, V6Z 2N3. Pacific Northern Gas Ltd. is to also make the Application available on its website at www.png.ca.

6.       Pacific Northern Gas Ltd. is to publish in display-ad format, as soon as reasonably possible but no later than Friday, December 29, 2017, the Notice of Application attached as Appendix B to this order, in such appropriate news publications as may properly provide adequate notice to the public in the affected service area.

7.       Pacific Northern Gas Ltd. is directed to provide its customers with a bill message notice of the interim rates with its next customer mailing.

8.       Pacific Northern Gas Ltd. must file its Amended Application on or before Wednesday, February 28, 2018, in the same format as the Amended Application filed as Exhibit B-1-1 in the 2016–2017 Revenue Requirements Application for the Pacific Northern Gas Ltd. PNG-West Service Area proceeding.

9.       Pacific Northern Gas Ltd. is directed to file amended tariff rate schedules, in accordance with the terms of this order, within 15 business days of the date of this order.

DATED at the City of Vancouver, in the Province of British Columbia, this             19^th           day of December 2017.

BY ORDER

Original signed by:

D.A. Cote

Commissioner

Attachments

Pacific Northern Gas Ltd.

2018–2019 Revenue Requirements Application

On November 30, 2017, Pacific Northern Gas Ltd. filed its 2018–2019 Revenue Requirements Application with the British Columbia Utilities Commission seeking Commission approval to, among other things, increase the 2018 delivery rates. The Application also seeks relief to allow PNG to amend its rates on an interim and refundable/recoverable basis, effective January 1, 2018, pending the regulatory process for the review of the Application and orders subsequent to that process.

PNG is requesting an interim delivery rate increase of 1.5 percent from $12.372/GJ to $12.557/GJ for residential service, a 1.4 percent increase from $10.416/GJ to $10.562/GJ for small commercial service, and a 1.9 percent increase from $7.090/GJ to $7.222/GJ for Granisle propane service. PNG is also requesting a decrease in the Revenue Stabilization Adjustment Mechanism (RSAM) rate rider on an interim and refundable basis applicable to residential and small commercial customers from $1.656/GJ to $0.551/GJ.

Further to PNG’s 2017 Fourth Quarter Report on gas supply costs and Gas Cost Variance Account (GCVA) balances, by Order G-186-17 dated December 14, 2017 the Commission approved PNG’s commodity rates and GCVA rate riders effective January 1, 2018. Inclusive of these changes, the overall average bundled rate change for a typical residential customer consuming 68.8 GJ per year is a decrease of $98 per year or 7.3 percent. Similarly, the overall bundled rate change for a typical small commercial customer consuming 318.2 GJ per year is a decrease of $477 per year or 9.0 percent and for Granisle residential propane customers consuming 37.9 GJ per year the overall average bundled rate increase is 8.4 percent, an increase of $87 per year, mainly due to the increase in the commodity cost.