ORDER NUMBER
G-99-20
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
FortisBC Inc.
Application under Sections 50(2), 50(3), and 50(7)
of the Utilities Commissions Act for COVID-19 Financing
BEFORE:
T. A. Loski, Panel Chair
K. A. Keilty, Commissioner
on April 29, 2020
ORDER
WHEREAS:
A. On April 17, 2020, FortisBC Inc. (FBC) applied to the British Columbia Utilities Commission (BCUC) pursuant to sections 50(2), 50(3), and 50(7) of the Utilities Commission Act (UCA) for approval to:
1. increase its borrowing capacity through the establishment of a new credit facility with a term not to exceed eighteen months and the principal amount of up to $100 million with one or more lenders;
2. issue common shares to FortisBC Pacific Holdings Inc., the holding company of FBC, in the amount of up to $50 million on or before December 31, 2020, to ensure that FBC maintains its currently approved deemed capital structure for regulated purposes; and
3. issue unsecured debentures of up to $200 million, under the existing trust indenture dated May 27, 2009, consistent with FBC’s ordinary course of business and pre-COVID-19 pandemic financing plans (Application).
B. FBC states that the Application was filed in response to the growing impact of the global COVID-19 pandemic in British Columbia and the State of Emergency declared in the province. While FBC’s current liquidity position is relatively strong, the COVID-19 pandemic is expected to have a negative effect on FBC’s cash flows, the extent of the impact is outside FBC’s control and remains uncertain at this time, the economic effects are likely to continue for a prolonged period of time even after the State of Emergency is lifted, and there is significant volatility and reduction in access to liquidity currently being experienced in the financial markets. Therefore, FBC requires the flexibility and capacity to act in a timely manner if and when necessary;
C. FBC requests that all information related to the Application be held confidential by the BCUC due to its commercially sensitive nature; and
D. The BCUC has reviewed the Application and considers that approval is warranted.
NOW THEREFORE pursuant to sections 50(2), 50(3) and 50(7) of the UCA, the BCUC orders as follows:
1. FBC is approved to:
a. Increase the amount of its borrowing capacity by establishing a new credit facility with a term not to exceed eighteen months and the principal amount of up to $100 million with one or more lenders.
b. Issue common shares to FortisBC Pacific Holdings Inc. in the amount of up to $50 million on or before December 31, 2020 to ensure that FBC maintains its currently approved deemed capital structure for regulated purposes of 60.0 percent debt and 40.0 percent equity.
c. Issue unsecured debentures of up to $200 million, under the existing trust indenture dated May 27, 2009, between FBC and Computershare Trust Company of Canada, as trustee, consistent with FBC’s ordinary course of business and pre-COVID-19 pandemic financing plans.
2. If FBC undertakes any of the proposed financing measures approved in this order, FBC shall file with the BCUC the relevant details within one week of entering into such arrangements.
3. The BCUC will hold information pertaining to this Application and any related compliance filings confidential on the basis that these documents contain commercially sensitive information.
DATED at the City of Vancouver, in the Province of British Columbia, this 29th day of April 2020.
BY ORDER
Original signed by:
T. A. Loski
Commissioner