ORDER NUMBER

F-42-20

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

British Columbia Hydro and Power Authority

F2020 to F2021 Revenue Requirements Application

Participant Assistance/Cost Award Application

 

BEFORE:

D. M. Morton, Panel Chair

A. K. Fung, QC, Commissioner

E. B. Lockhart, Commissioner

R. I. Mason, Commissioner

 

on November 23, 2020

 

ORDER

WHEREAS:

 

A.      On February 25, 2019, the British Columbia Hydro and Power Authority (BC Hydro) filed its Fiscal 2020 to Fiscal 2021 (F2020–F2021) Revenue Requirements Application (Application) with the British Columbia Utilities Commission (BCUC) pursuant to sections 44.2, 58 to 61 and 99 of the Utilities Commission Act (UCA) requesting, among other things:

1.       approval of a reduction of the Deferral Account Rate Rider (DARR) from 5 percent to 0 percent effective April 1, 2019;

2.       approval of an increase in rates by 6.85 percent effective April 1, 2019;

3.       approval of an increase in rates by 0.72 percent effective April 1, 2020; and

4.       approval of the F2020–F2021 Open Access Transmission Tariff (OATT) rates as set out in Table 9‑8 of the Application effective April 1, 2019 and April 1, 2020, respectively;

B.      By Orders G-45-19, G-146-19, G-218-19, G-268-19, G-279-19, G-312-19 and G-63-20, the BCUC established and later amended a regulatory timetable for the review of the Application, which includes, among other things, a BC Hydro workshop, two procedural conferences, four rounds of BCUC and intervener information requests (IRs) and two rounds of Panel IRs to BC Hydro, intervener evidence and IRs on that evidence, rebuttal evidence from BC Hydro, an oral hearing followed by written final and reply arguments from all parties, and a web-based oral phase of argument with BC Hydro, followed by written submissions and reply from all parties;

C.      By letters dated July 6 and 15, 2020, the Panel sought further legal reply submissions from BC Hydro and interveners on certain matters;

D.      By Orders F-23-19, F-29-19, F-13-20, F-15-20, F-20-20, and F-32-20, the BCUC awarded interim PACA funding to the following interveners, respectively, in the amounts listed in the table below:

E.       On October 2, 2020, by Decision and Order G-246-20 issued concurrently, the BCUC made various determinations on the Application, including approving the F2020 and F2021 interim rates as permanent, subject to certain adjustments, approving the reduction to the DARR from 5 percent to 0 percent effective April 1, 2019 and approving the F2020 and F2021 interim OATT rates as permanent;

F.       The following participants filed Participant Assistance/Cost Award (PACA) applications with the BCUC with respect to their participation in the proceeding:

G.      On October 20, 2020, BC Hydro provided its comments regarding the PACA applications and stated, among other things, that in its view all participants are eligible for a cost award and all participants contributed to a better understanding by the BCUC of the issues in the proceeding. BC Hydro also submitted that it takes no position on whether a cost award at the specialist rate is warranted for Gjoshe, Ince and Willis to participate effectively in the proceeding and defers to the BCUC’s judgement on whether each of these individual participant’s particular expertise has contributed to a better understanding by the Panel of the issues in this proceeding. BC Hydro also noted a $50.40 discrepancy in the CEC’s PACA application;

H.      On October 27, 2020, the CEC replied to BC Hydro’s comments, stating that it believes the discrepancy is the result of the BCUC deducting a file opening disbursement charge. No other interveners submitted a reply to BC Hydro’s comments; and

I.         The BCUC has reviewed the PACA applications and the comments made by BC Hydro and the CEC in accordance with the criteria and rates set out in the PACA Guidelines attached to Order G-97-17 and determines that the cost awards should be approved in full for BCSEA, BCOAPO, CEABC, MoveUP and Zone II RPG; and that partial cost awards should be approved for AMPC, the CEC, Ince, Gjoshe and Willis.

 

NOW THEREFORE pursuant to section 118(1) of the UCA, the BCUC orders as follows:

1.       For the reasons outlined in Appendix A to this order, funding is awarded to the following interveners in the listed amounts, inclusive of applicable taxes, for their participation in the proceeding:

2.       BC Hydro is directed to reimburse the above-noted participants for the awarded amounts in a timely manner.

 

DATED at the City of Vancouver, in the Province of British Columbia, this              23^rd         day of November 2020.

 

BY ORDER

 

Original signed by:

 

D. M. Morton

Commissioner

 

Attachment

 

British Columbia Hydro and Power Authority

F2020 to F2021 Revenue Requirements Application

Participant Assistance/Cost Award Application

1.0              Background

On February 25, 2019, the British Columbia Hydro and Power Authority (BC Hydro) filed its Fiscal 2020 to Fiscal 2021 (F2020–F2021) Revenue Requirements Application (Application) with the British Columbia Utilities Commission (BCUC). The BCUC established and later amended a regulatory timetable for the review of the Application, which included, among other things, a BC Hydro workshop; two procedural conferences; four rounds of BCUC and intervener information requests (IRs) and two rounds of Panel IRs to BC Hydro; intervener evidence and IRs on that evidence; rebuttal evidence from BC Hydro; an oral hearing followed by written final and reply arguments from all parties; and a web-based oral phase of argument with BC Hydro followed by written submissions and reply from all parties.[4] On July 6 and 15, 2020, the Panel also sought further legal reply submissions from BC Hydro and interveners on certain matters.[5]

 

On October 2, 2020, by Decision and Order G-246-20 issued concurrently, the BCUC made various determinations on the Application, including approving the F2020 and F2021 interim rates as permanent, subject to certain adjustments, approving the reduction to the DARR from 5 percent to 0 percent effective April 1, 2019 and approving the F2020 and F2021 interim OATT rates as permanent.

 

Applications for Participant Assistance/Cost Award (PACA) were received from ten participants with respect to their participation in the proceeding.

1.1              Interim PACA awards

By Orders F-23-19, F-29-19, F-13-20, F-15-20, F-20-20, and F-32-20, the BCUC awarded interim PACA funding to the following interveners, respectively, in the amounts listed in the table below:

 

 

1.2              Legislative Framework

Section 118 of the Utilities Commission Act (UCA) states that the BCUC may order a participant in a proceeding

before the BCUC to pay all or part of the costs of another participant in the proceeding.[6]

 

Order G-97-17, dated June 15, 2017, outlines the BCUC’s PACA Guidelines (PACA Guidelines).[7] Section 3.0 of the PACA Guidelines relates to participant eligibility for a cost award and section 4.0 relates to criteria for a cost award. Per section 4.3 of the PACA Guidelines, in determining the amount of a participant’s cost award, the BCUC considers the following:

(a)    Has the participant contributed to a better understanding by the BCUC of the issues in the proceeding?

(b)    To what degree will the participant be affected by the outcome of the proceeding?

(c)     Are the costs incurred by the participant fair and reasonable?

(d)    Has the participant joined with other groups with similar interests to reduce costs?

(e)    Has the participant made reasonable efforts to avoid conduct that would unnecessarily lengthen the duration of the proceeding, such as ensuring participation was not unduly repetitive?

(f)      The funding day calculation for funding in accordance with sections 4.1 and 4.2, if one is provided.

(g)    Any other matters which the BCUC determines appropriate in the circumstances.

The Panel has discretion in determining whether any PACA amount awarded should be for the full amount sought or should be scaled.

 

Sections 7.0 through 13.0 of the PACA Guidelines outline the types of eligible costs that can be awarded to participants including, among other things, professional fees, foregone earnings, childcare expenses, disbursements, tax costs and other costs. 

 

In particular, section 7.0 of the PACA Guidelines outlines information regarding professional fees, including that the BCUC expects participants to use professional services in a cost-effective manner and make efforts to avoid duplication of services, and as such the BCUC may adjust cost awards where any duplication appears to have occurred. In addition, consultants, specialists and expert witnesses are expected to provide services specific to their technical expertise.

 

Section 7.11 of the PACA Guidelines states that the BCUC will generally limit the awards for individual participants to foregone earnings, childcare and disbursements, but professional fees may be awarded if “it deems those fees are warranted for the individual to participate effectively.”

 

Attachment A to the PACA Guidelines provides rate schedules of the maximum daily fees for professional services and provides the maximum foregone earnings for individuals of $250 per day. Section 7.2 of the PACA Guidelines states that the maximum daily fees are based on an 8 hour day and that “[w]here the actual billing rate for an 8 hour day is less than the maximum daily fee, the lesser amount will be used for the award.”

 

With respect to disbursements and other costs, section 10.1 of the PACA Guidelines states, “[d]isbursements directly related to the participant's participation in the proceeding may be allowed.” Section 13.1 of the PACA Guidelines provides an overarching inclusion of “other costs the Commission deems reasonable and justified.” 

2.0              PACA Applications

The following participants filed PACA applications with the BCUC in regard to their respective involvement in the proceeding:

 

 

On October 20, 2020, BC Hydro provided its comments regarding the PACA applications and stated, among other things, that in its view all participants are eligible for a cost award and all participants contributed to a better understanding by the BCUC of the issues in the proceeding. BC Hydro also submits that it takes no position on whether a cost award at the specialist rate is warranted for Gjoshe, Ince and Willis to participate effectively in the proceeding and defers to the BCUC’s judgement on whether each of these individual participant’s particular expertise has contributed to a better understanding by the Panel of the issues in this proceeding. BC Hydro also noted a $50.40 discrepancy in the CEC’s PACA application.

 

On October 27, 2020, the CEC replied to BC Hydro’s comments, stating that it believes the discrepancy is the result of the BCUC deducting a file opening disbursement charge. No other interveners submitted a reply to BC Hydro’s comments.

 

The Panel has reviewed the PACA applications and the comments made by BC Hydro and the CEC in accordance with the criteria and rates set out in the PACA Guidelines attached to Order G-97-17 and determines that the cost awards should be approved in full for BCSEA, BCOAPO, CEABC, MoveUP and Zone II RPG; and that partial cost awards should be approved for AMPC, the CEC, Ince, Gjoshe and Willis.

2.1              AMPC

AMPC participated in all aspects of the proceeding, including the filing of intervener evidence and presenting a witness panel for cross-examination at the oral hearing. AMPC requests a cost award of $441,693.31 summarized as follows:

 

BCUC Determination

The Panel finds the awards for counsel fees and disbursements applied for by AMPC to be reasonable.

 

With respect to the award for expert fees, AMPC has applied for 42 funding days at the maximum daily rate of $2,150 for each of Patrick Bowman and Melissa Davies for a total of 84 funding days. However, 27.2 days at a daily rate of $1,800[11] and 66.1 days at a daily rate of $1,056[12] were invoiced for Patrick Bowman and Melissa Davies, respectively, for a total of 93.3 days.

 

The Panel finds a total of 84 funding days for AMPC’s expert witnesses to be reasonable considering it was one of only two interveners to file evidence and the only intervener to present a witness panel for cross-examination at the oral hearing. However, the funding days for AMPC’s two expert witnesses should be limited in total to 84. Therefore, notwithstanding the amounts invoiced, the expert fees should be adjusted to reflect the total funding days as applied for, which the Panel has found to be reasonable. The Panel also notes section 7.2 of the PACA Guidelines states that “[w]here the actual billing rate for an 8 hour day is less than the maximum daily fee, the lesser amount will be used for the award.”

 

Accordingly, the Panel determines that the following award to AMPC for its expert witness fees is fair and reasonable, and therefore awards AMPC a total of $361,435.01, inclusive of applicable taxes:

 

2.2              CEC

The CEC participated in all aspects of the proceeding and requests a cost award of $292,672.63 summarized as follows:

 

 

PACA Budget

 

On July 11, 2019, the CEC filed a PACA budget estimating $190,443.75 in costs, comprising of 37.5 funding days each for consultant and counsel. BCUC staff provided a response indicating that the PACA budget exceeded staff’s estimate of 35.5 funding days each for consultant and counsel for full participation in the proceeding without leading evidence.

BCUC Determination

The Panel finds the award for counsel fees applied for by the CEC to be reasonable. However, with respect to consultant fees, the Panel finds the funding days applied for exceed the Panel’s expectation of funding days for the proceeding.

 

The Panel notes that the average consultant and specialist funding days applied for by the interveners in the proceeding who did not lead evidence is 42 days and the median is 48.2 days. The Panel considers the 69.88 funding days for consultant sought by the CEC to be on the high side of what is reasonable. BCUC staff provided an estimate of 35.5 funding days in response to the CEC’s PACA budget. The Panel acknowledges that following the issuance of the staff estimate, the regulatory process and scope of the proceeding expanded. While the staff estimate is not binding, the Panel considers that it provides a useful reference point for estimating a reasonable number of funding days.

 

The Panel’s concerns must be balanced against a consideration of the contribution that the CEC made to the proceeding. We acknowledge that the CEC participated fully in the proceeding and contributed to a better understanding by the BCUC of the issues in the proceeding. However, we are of the view that the IRs and submissions of the CEC could have been prepared in a more efficient manner. After considering the expanded regulatory process and scope of the proceeding, the Panel finds 62.5 funding days to be fair and reasonable for an intervener which did not lead evidence to fully participate in the proceeding.

 

With respect to the disbursements applied for, the “Open File Charge” appears to relate to the creation, by the CEC’s legal counsel, of a new file to initiate the provision of legal services for this proceeding.

 

In determining whether a particular cost should be awarded following a proceeding, the Panel considers it important to review the context and nature of the cost in question. The Panel notes that the terms “disbursements directly related to the participant’s participation” and “other costs the Commission deems reasonable and justified” in sections 10.1 and 13.1 of the PACA Guidelines, respectively, limit the scope of recoverable costs. The question becomes whether a properly incurred cost is recoverable because it arises directly from the factual issues raised in the proceeding, as opposed to the specific circumstances and business practices of the participant.

 

The purpose of permitting the recovery of disbursements and other costs is to provide the participant with a means by which to be reimbursed for costs that arise directly from the issues of the proceeding or for materials or services that directly support its participation in the proceeding. The Panel does not accept that the CEC’s legal consultant’s “Open File Charge” is a necessary cost that arises directly from the issues of the proceeding or directly supports the CEC’s participation in the proceeding. Instead the cost is a result of the CEC’s legal consultant’s existing cost structure and thus while it may represent a standard business practice for that consultant, it is not necessary for the conduct of the proceeding, and accordingly does not reflect the intent of the cost awards under the PACA Guidelines. For these reasons, the Panel finds that the “Open File Charge” claimed by the CEC not to be a reasonable or justified cost, which should form part of the CEC’s PACA award.

 

Accordingly, the Panel determines that adjusting the CEC’s award as follows is fair and reasonable and therefore awards the CEC $278,286.57, inclusive of applicable taxes:

•         Consultant fees are reduced to $121,406.25, inclusive of applicable taxes, which are comprised of 62.5 funding days at a daily rate of $1,850; and

•         Disbursements are reduced to $28.35, inclusive of applicable taxes, by removing the “Open File Charge”.

2.3              Ince, Gjoshe and Willis

2.3.1        Ince

Ince participated in all aspects of the proceeding. Ince requests a cost award of $132,788.60 comprised of 68 funding days as a specialist at a daily rate of $1,850 and disbursements of $698.60 for vehicle mileage and parking.

 

In his PACA application, Ince submits that he meets the eligibility requirements of section 3.0 of the PACA Guidelines because he has “relevant expertise in many areas of BC Hydro processes and operations.” In particular, Ince notes that he was “the key architect of the load forecast methodology used by BC Hydro for the last 14 years, which is still in place.” Ince also submits that he has experience testifying in oral hearings before the BCUC and other regulatory bodies on subjects such as risk management, long-term planning and load forecasting. Ince notes that he received positive comments from other interveners with respect to his cross-examination of BC Hydro’s load forecast in the proceeding in terms of focusing the investigation and reducing hearing time.[13]

 

Ince did not submit a PACA budget to the BCUC. In his PACA application, Ince submits that he did not anticipate applying for PACA funding when he registered for intervener status because he had expected his participation in the proceeding to be more limited. However, the anticipated scale and timeframe of the proceeding expanded and he “ultimately participated in all phases of the RRA.”[14]

2.3.2        Gjoshe

Gjoshe participated in all aspects of the proceeding. Gjoshe requests a cost award of $89,245.39 comprised of 73 funding days as a specialist at a daily rate of $1,075 and the following disbursements totalling $1,353.39:

•         Dedicated cell phone service (for 18 months): $403.20;

•         Printing: $27.41;

•         Meals: $25.58;

•         Vehicle mileage: $10.60;

•         Parking: $25.75;

•         High speed internet (50% of home bill for 18 months): $803.25; and

•         Bus fare: $57.60

In her PACA application, Gjoshe submits that she participated in the proceeding as an independent intervener, who hopes to have brought “the perspective of the BC Hydro residential ratepayer at large.” Gjoshe submits that she “explored matters of Integrated Planning, Load Forecasting, Capital Projects, Corporate Performance, DSM, Electrification and other issues, with a bearing on near- and long-term impact on rates.” Gjoshe also notes that she “sought to keep the scope of Information Requests small and focused” to minimize any overlap with BCUC staff and other interveners’ IRs.[15]

 

Gjoshe did not submit a PACA budget to the BCUC.

 

Interim PACA application

 

On October 17, 2019, Gjoshe applied for interim PACA awards. As part of that application, she submitted that she contributes integrated planning expertise to the proceeding, acquired from working at the British Columbia Transmission Corporation (BCTC) and BC Hydro for more than ten years.[16] Gjoshe submitted that she was an “instrumental part” of the Business Development group within Customer and Strategy Development at the BCTC, which was tasked with the implementation of the “Transmission Expansion Policy,” representing “the only Integrated Planning ‘compact’ developed in B.C. in the past decade or so (as it concerns the BC Hydro power system).”[17] Gjoshe also submitted that BC Hydro’s current Integrated Planning business group is “in its early days” and that the “acquisition of expertise requires time” especially in the utility business. She explained that “customer, power system and regulatory knowledge is often specialized – specific to the jurisdiction at hand.”[18]

 

In the reasons for decision regarding Gjoshe’s interim PACA application, the Panel noted that Gjoshe is not engaged by the BCUC or any other party to the proceeding as a consultant or specialist. The Panel considered Gjoshe to represent her own interests as an individual in the proceeding and not the interests of a group or organization. However, the Panel recognized that Gjoshe has particular expertise, but at that time it could not establish whether that particular expertise would contribute to a better understanding by the Panel of the issues in the proceeding. Accordingly, the Panel limited Gjoshe’s interim award to the maximum daily rate of $250 for an individual’s participation.[19]

2.3.3        Willis

Willis participated in the proceeding, but did not participate in all aspects. Willis did not attend the two procedural conferences, he submitted IRs in three out of the four rounds of intervener IRs and he did not cross-examine panels 2 and 5 at the oral hearing.

 

Willis requests a cost award of $16,576 comprised of 8 funding days as a specialist at a daily rate of $1,850 plus applicable taxes.

 

In his PACA application, Willis submits that he has “asked questions relating to issues with respect to small and medium size industry.”[20] Willis’ resume states that he is a “Senior Energy Consultant” who has worked “as a consultant in many energy related business areas” with “a variety of organizations, private, and government.”[21]

 

Willis did not submit a PACA budget to the BCUC.

BCUC Determination

Ince, Gjoshe and Willis’ participation in the proceeding were as individuals representing their own interests. The Panel does not consider that a rate for a specialist is warranted for these individuals to participate effectively. While we agree that these three interveners have some expertise that is relevant to this proceeding, we do not consider them to have sufficient expertise to be considered specialists in this proceeding. However, since their relevant expertise did provide some better understanding of the issues in the proceeding, on that basis we are willing to make an award at the maximum rate for an individual’s participation.

 

The Panel finds the funding days applied for by Ince and Gjoshe exceed the Panel’s expectation of funding days for the proceeding. For the same reasons as stated above in section 2.2, the Panel finds 62.5 funding days to be fair and reasonable for an intervener who did not lead evidence to fully participate in the proceeding.

 

With respect to the disbursements applied for, the Panel questions whether Gjoshe’s claims for a dedicated cell phone service and high-speed internet charges of $403.20 and $803.25, respectively, over an 18-month period are reasonable and justified. As mentioned above in section 2.2, the terms “disbursements directly related to the participant’s participation” and “other costs the Commission deems reasonable and justified” in section 10.1 and 13.1 of the PACA Guidelines, respectively, limit the scope of recoverable costs. The question becomes whether a properly incurred cost is recoverable because it arises directly from the factual issues raised in the proceeding. The Panel does not accept that a dedicated cell phone service and high-speed internet are necessary costs that arise directly from the issues of the proceeding or that these costs were necessary to be incurred for the entire duration of the proceeding. The Panel does not find these charges to be a reasonable or justified cost, which should form part of Gjoshe’s PACA award.

 

Accordingly, the Panel determines that the following adjustments are fair and reasonable:

•         Reducing Ince, Gjoshe and Willis’ daily rates to $250;

•         Reducing Ince and Gjoshe’s funding days to 62.5; and

•         Removing the dedicated cell phone service and high-speed internet charges of $403.20 and $803.25, respectively, from Gjoshe’s claimed disbursements.

Therefore, the Panel awards the following: