ORDER NUMBER

G-113-23

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

and

British Columbia Hydro and Power Authority

Request to Amend Major Capital Project Filing Guidelines

BEFORE:

A. K. Fung, KC, Panel Chair

A. C. Dennier, Commissioner

W. M. Everett, KC, Commissioner

on May 9, 2023

ORDER

WHEREAS:

A.      On March 17, 2023, British Columbia Hydro and Power Authority (BC Hydro) filed an application with the British Columbia Utilities Commission (BCUC) to request to amend the Major Capital Project Filing Guidelines (Application);

B.      On December 2, 2019, by Order G-313-19, the BCUC approved the 2018 Major Capital Project Filing Guidelines (2018 Guidelines), including BC Hydro’s commitment to submit applications to the BCUC for major capital projects with authorized cost estimates that exceed the following thresholds:

1.       $100 million for Power System projects;

2.       $50 million for Buildings projects; and

3.       $20 million for Information Technology projects.

C.      In the Application, BC Hydro seeks approval of:

                     i.            An increase to the major capital filing thresholds, escalated annually by their respective price index for the previously completed calendar year, starting from fiscal 2019; and

                   ii.            BCUC confirmation that a Certificate of Public Convenience and Necessity is not required for Customer IPID 901943 Project.

D.      The BCUC has commenced its review of the Application and determines that the establishment of a public hearing and a regulatory timetable are warranted.

NOW THEREFORE the BCUC orders as follows:

1.       A public hearing is established for the review of the Application in accordance with the regulatory timetable as set out in Appendix A to this order.

2.       As soon as practicable, but no later than Friday, May 12, 2023, BC Hydro must publish the Public Notice, attached as Appendix B to this order, on its website and social media platforms. It must also publish weekly reminder notices on each platform until the conclusion of the public submissions period on Friday, May 26, 2023.

3.       BC Hydro is directed to provide an electronic copy of the Application and this order on or before Friday, May 12, 2023, to all known affected or potentially affected parties, including, but not limited to: registered interveners in the BC Hydro F2023 – F2025 Revenue Requirements proceeding and potentially affected Indigenous groups.

4.       BC Hydro is directed to provide to the BCUC, by Wednesday, May 17, 2023, confirmation of when the Public Notice has been posted, including a list of the platforms in which the Public Notice was posted.

5.       BC Hydro is directed to provide to the BCUC, by Wednesday, May 17, 2023, a list of all parties directly notified of the Application and this order, including the method and date of notification.

6.       BC Hydro is directed to file the further information as requested in Appendix C to this Order, by Friday, May 19, 2023.

7.       Persons who wish to file a submission, on topics detailed in the cover letter to this Order, may do so by Friday, May 26, 2023.

DATED at the City of Vancouver, in the Province of British Columbia, this         9^th           day of May 2023.

BY ORDER

Original signed by:

A.K. Fung, KC

Commissioner

Attachment

British Columbia Hydro and Power Authority

Request to Amend Major Capital Project Filing Guidelines

* Please refer to the cover letter accompanying Order G-113-23 for detailed information

BC HYDRO’S REQUEST TO AMEND MAJOR CAPITAL PROJECT FILING GUIDELINES

On March 17, 2023, BC Hydro filed its Request to Amend Major Capital Project Filing Guidelines Application requesting an increase to the threshold above which BC Hydro must file an application for BCUC approval of major capital projects. BC Hydro requests the thresholds under the existing guidelines to be escalated by their respective price index for the previously completed calendar year, backdated to Fiscal 2019. In the Application, BC Hydro also requests confirmation from the BCUC that a Certificate of Public Convenience and Necessity is not required for the Customer IPID 901943 Project. Please visit the Proceeding webpage on bcuc.com under “Our Work” to learn more.

To participate in the proceeding, visit www.bcuc.com/get-involved.

Subscribe to a Proceeding on bcuc.com under “Get Involved” to receive email notifications when public documents are added to the proceeding.

British Columbia Hydro and Power Authority

Request to Amend Major Capital Project Filing Guidelines

1.0              Request for Further Information

The BCUC has commenced review of the Application and requests further information from BC Hydro as follows:

1)      Please confirm that BC Hydro is not seeking approval with respect to Items 1, 3, 5 and 6 listed on page 1 of the Application. If not confirmed, please explain.

2)      Please complete the following table of major capital project filings since the 2018 Guidelines were approved, adding any additional projects as necessary.  Under the column “Forecast Cost or Cost Range”, BC Hydro may respond by providing forecast cost, cost ranges, or high-level planning estimates as applicable. Under “Accuracy of Forecast Cost”, BC Hydro may respond by providing accuracy ranges or AACE classifications as applicable.

3)      In the Application, BC Hydro requested confirmation from the BCUC that a Certificate of Public Convenience and Necessity is not required for Customer IPID – 901943 Project. Please provide further information about this project and explain how the public interest would be best served by the BCUC confirming that a CPCN is not required for the project.

4)      On page 5 of the Application, BC Hydro provides Table 1, as follows:

In footnote 10, BC Hydro states: “The values in the table for fiscal years 2020 to 2024 for Power System and Information Technology projects are based on BC-CPI (Consumer Price Index (CPI) - Province of British Columbia (gov.bc.ca), whereas for Buildings projects the index is based on the non-residential building construction price index for Vancouver https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810013501.”

A)      Please provide further explanation and justification of the escalation percentages selected for each of:

                                                         i.      BC-CPI for Power System projects;

                                                       ii.      BC-CPI for Information Technology projects; and

                                                     iii.      Non-residential building construction price index change (%) for Vancouver for Buildings projects.

B)      Please further explain why BC Hydro is proposing to backdate the escalation in thresholds to F2019 and what major capital projects may be affected by such backdating

C)      Please explain how the escalation in thresholds will work in the context of a multi-year Revenue Requirements Application. i.e., How BC Hydro will determine if a project is over or under the threshold when dealing with a multi-year time period?

5)      The BC Hydro major capital projects filing thresholds were set in Decision and Order G-313-19.[5] On page 25 of the Decision, the BCUC stated:

BC Hydro expects 20 projects included in the F2020 to F2024 Capital Plan will meet the major project thresholds (though not all may be filed with the BCUC in this period), and that approximately 20-30% of BC Hydro’s non-exempt capital expenditures would be reviewed by the BCUC in a major project filing in the next ten years.  …..The table below identifies the non-exempt capital expenditures expected to be reviewed in major project applications for F2019 to F2028.

A)      Please reproduce Table 2, with updated historic and forecast information for the year F2019 through F2028, under each of the following scenarios:

                                                   i.       The thresholds remain at the levels set in Decision and Order G-313-19; and

                                                 ii.      The thresholds are changed as proposed in the Application.

B)      Please confirm whether the percentage of non-exempt capital expenditures reviewed in major project applications between F2019 and today has been more than 30 percent, and explain whether this percentage of major capital projects reviewed separately by the BCUC is reasonable.

C)      Please confirm whether the percentage of non-exempt capital expenditures forecast to be reviewed in major project applications between today and F2028 is expected to be greater than 30 percent, under each of: the 2018 Guidelines, and the revised thresholds proposed in the Application. For each, please explain whether this percentage of major capital projects reviewed separately by the BCUC is reasonable.