June 19, 2020
Sent via email Letter L-36-20
Mr. Doug Slater
Director, Regulatory Affairs
FortisBC Energy Inc.
16705 Fraser Highway
Surrey, BC V4N 0E8
gas.regulatory.affairs@fortisbc.com
Re: FortisBC Energy Inc.– Revelstoke Service Area
2020 Second Quarter Gas Cost Report
Dear Mr. Slater:
On June 11, 2020, FortisBC Energy Inc. (FEI) filed with the British Columbia Utilities Commission (BCUC) its 2020 Second Quarter Gas Cost Report for Revelstoke (Report), which includes details regarding the Propane Cost Deferral Account (PCDA), and the related propane cost reference price and customer rates.
The BCUC notes that the propane reference price for Revelstoke was last changed by Order G-308-19, effective January 1, 2020, when it was increased by $0.0422 per litre ($/L) from $0.2078/L to $0.2500/L.
On March 12, 2020, the BCUC issued Order G-47-20 regarding FEI’s 2020 First Quarter Gas Cost Report and Rate Changes effective April 1, 2020 for Revelstoke, approving an increase to customer rates of $0.7095/GJ, based on an increase to the propane reference price of $0.0174/L, from $0.2500/L to $0.2674/L, effective April 1, 2020. On March 25, 2020, in response to the impact of the COVID-19 pandemic on British Columbians, FEI filed an application requesting the BCUC to rescind Order G-47-20 and to maintain the existing rates effective April 1, 2020. By Order G-64-20 dated March 26, 2020, the BCUC approved FEI’s request to keep the gas cost rates unchanged, effective April 1, 2020, and rescinded order G-47-20.
In consideration of the commencement of the repayment phase of the COVID Customer Recovery Fund on July 1, 2020, the further re-opening of the BC economy under BC’s Restart Plan and the circumstances around the COVID-19 pandemic, FEI requests to maintain propane rates at the existing rate to submit a revised gas cost report based on updated forward prices no later than July 10, 2020, with proposed changes to the CCRC to be effective August 1, 2020.
The BCUC has reviewed the Report within the context of the quarterly gas costs review and rate setting mechanism guidelines pursuant to Letters L-5-01 and L-40-11. BCUC acknowledges receipt of the Report and considers the COVID-19 pandemic to be an unusual circumstance where a more flexible approach to setting quarterly gas costs is necessary. Therefore, the BCUC accepts FEI's recommendation that the propane reference price and customer rates for Revelstoke remain unchanged at July 1, 2020. The BCUC also accepts FEI’s request to submit a revised gas cost report no later than July 10, 2020 with proposed changes to the propane cost reference price and customer rates to be effective August 1, 2020.
When submitting the revised gas cost report, the BCUC requires that, in addition to presenting a rate change proposal based on the standard rate setting process, FEI provides alternative proposals to managing the PCDA, including the following:
• An alternative where the minimum criteria required to trigger a rate change is met, specifically: i) the recovery-to-cost ratio is reset to 95% of the deadband range rather than 100%; and ii) the price change is equal to a minimum of +/-$0.50/GJ; and
• Any other alternatives as appropriate.
The BCUC will hold the information in Tab 2 of the Report confidential, as requested by FEI, as it contains market sensitive information.
Sincerely,
Original signed by:
Marija Tresoglavic
Acting Commission Secretary
RQ/cmv