ORDER NUMBER
G-42-21
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
FortisBC Inc.
Annual Review for 2020 and 2021 Rates
BEFORE:
T. A. Loski, Panel Chair
C. Brewer, Commissioner
E. B. Lockhart, Commissioner
On February 12, 2021
ORDER
WHEREAS:
A. On June 22, 2020, the British Columbia Utilities Commission (BCUC) issued its Decision and Orders G-165-20 for FortisBC Energy Inc. (FEI) and G-166-20 for FortisBC Inc. (FBC) approving a Multi-Year Rate Plan (MRP) for 2020 through 2024 (MRP Decision). In accordance with the MRP Decision, FBC is to conduct an annual review process to set rates for each year;
B. By Order G-303-19 dated November 28, 2019, the BCUC approved a 1.0 percent general rate increase for 2020, on an interim and refundable basis, effective January 1, 2020, pending the MRP Decision and FBC filing its annual review materials to set permanent rates for 2020;
C. By letter dated July 20, 2020, FBC proposed a regulatory timetable for its annual review for 2020 and 2021 rates;
D. By Order G-211-20 dated August 11, 2020, the BCUC established a regulatory timetable for the annual review of FBC’s 2020 and 2021 rates;
E. On August 19, 2020, FBC submitted its Annual Review for 2020 and 2021 Rates Application (Application). In the Application, FBC requests approval to make existing 2020 interim rates permanent, effective January 1, 2020, and for a general rate increase of 6.37 percent, effective January 1, 2021, among other things;
F. On October 9, 2020, FBC submitted an evidentiary update to the Application (First Evidentiary Update) which FBC states does not have an impact on proposed 2020 or 2021 rates;
G. On October 28, 2020, FBC filed responses to undertakings requested at the workshop held on October 21, 2020 (Workshop Undertakings) and submitted a further evidentiary update to the Application (Second Evidentiary Update). In the Second Evidentiary Update, FBC revises, among other things, the 2021 revenue requirement, resulting in a 2021 general rate increase of 4.36 percent, effective January 1, 2021;
H. By Order G-274-20 dated October 29, 2020, later amended by Order G-287-20, the BCUC amended the regulatory timetable to include information requests on FBC’s Workshop Undertakings and Second Evidentiary Update, followed by written final and reply arguments;
I. By letter dated November 9, 2020, FBC applied to the BCUC, pursuant to sections 59 to 61 and 89 of the Utilities Commission Act for approval to make existing 2020 interim rates permanent, effective January 1, 2020, and for a general rate increase of 4.36 percent, on an interim and refundable basis, effective January 1, 2021 (Interim Rates Application) pending a final decision on the Application;
J. By Order G-298-20 dated November 24, 2020, the BCUC approved the proposed general rate increase for 2021, on an interim and refundable basis, effective January 1, 2021. However, the BCUC was not prepared to make a determination on 2020 permanent rates until this annual review proceeding has been completed; and
K. The BCUC has reviewed the Application, evidence and arguments filed in the proceeding and makes the following determinations.
NOW THEREFORE pursuant to sections 44.2(3)(a) and 59 to 61 of the Utilities Commission Act, for the reasons stated in the Decision issued concurrently with this order, the BCUC orders as follows:
1. The existing 2020 interim rate increase of 1.0 percent is approved as permanent, effective January 1, 2020.
2. The existing 2021 interim rate increase of 4.36 percent is approved as permanent, effective January 1, 2021.
3. The creation of rate base deferral accounts is approved:
a. For the following regulatory proceedings:
i. The Annual Reviews during the MRP term, with balances to be amortized in the following year;
ii. FBC’s 2021 Long-Term Electric Resource Plan, with the amortization period to be determined in a future proceeding;
iii. FBC’s 2020 Cost of Service Analysis, with the amortization period to be determined in a future proceeding; and
iv. Participation in BCUC-Initiated Inquiries, with balances to be amortized in the following year;
b. To capture costs related to the Indigenous Relations Agreement (Huth Substation); and
c. To capture the costs of the 2021 triennial Mandatory Reliability Standards audit.
4. With respect to the 2018-2019 Revenue Surplus deferral account, that:
a. The $0.683 million 2020 revenue surplus be added to this account; and
b. The remaining $5.420 million be drawn down in 2021 to bring the account balance to zero, at which time this account is to be closed.
5. The previously approved 2020 Revenue Requirement Application deferral account is renamed the 2020-2024 MRP Application deferral account and amortized over a five-year period beginning January 1, 2020.
6. The COVID-19 incremental costs and related savings from 2020 and 2021 be recorded in the previously approved COVID-19 Customer Recovery Fund deferral account, as discussed in Section 12.2.1 of the Application.
7. The proposed service quality indicator (SQI) benchmarks of 3.22 for System Average Interruption Duration Index (SAIDI) and 1.57 for System Average Interruption Frequency Index (SAIFI), and thresholds of 4.52 for SAIDI and 2.19 for SAIFI, are approved for the duration of the MRP.
8. With respect to the Playmor Substation Upgrade Project:
a. The capital expenditures schedule in the amount of $10.922 million is accepted; and
b. FBC is directed to file project reporting with the BCUC, as outlined in Section 2.2 in the Decision issued concurrently with this order.
9. FBC is directed to file with the BCUC, within 30 days of the issuance of this order, amended tariff pages in accordance with the terms of this order.
DATED at the City of Vancouver, in the Province of British Columbia, this 12th day of February 2021.
BY ORDER
Original signed by:
T. A. Loski
Commissioner