ORDER NUMBER
G-272-23
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
FortisBC Energy Inc.
Application for Approval of a Tax Sharing Arrangement between FEI and Fortis Inc. (Application)
BEFORE:
B. A. Magnan, Panel Chair
On October 13, 2023
ORDER
WHEREAS:
A. On September 5, 2023, FortisBC Energy Inc. (FEI) applied to the British Columbia Utilities Commission (BCUC), pursuant to sections 23(1) and 54(9) of the Utilities Commission Act (UCA) for approval of a tax sharing arrangement and related transactions of this nature (Tax Sharing Arrangement) between FEI and its parent company, Fortis Inc. (FTS), for the taxation year ended December 31, 2023 and all future tax years (Application);
B. Pursuant to Order G-116-05 and the accompanying decision, and as re-affirmed by Order G-49-07, FEI is subject to ring-fencing conditions, including that “No Terasen Utility [now FEI] will enter into a tax sharing agreement with any affiliate of the Terasen Utility [now FEI], unless the agreement has been approved by the Commission”;
C. On July 7, 2020, the BCUC issued Order G-178-20 approving a tax sharing arrangement and all related transactions of this nature between FEI and its parent, FTS, for the taxation year ending December 31, 2020;
D. The Tax Sharing Arrangement between FEI and FTS will result in non-utility transactions for which FTS will provide an indemnity to FEI and reimburse FEI for any unrecoverable tax liability balance. FEI will be “kept whole” from its participation in the tax sharing arrangement with no adverse impact to FEI or its customers;
E. FEI filed its responses to BCUC staff questions on October 5, 2023; and
F. The BCUC has reviewed the Application and FEI’s responses to staff questions, and considers that approval of the Tax Sharing Arrangement is warranted.
NOW THEREFORE the BCUC orders as follows:
1. The Tax Sharing Arrangement as proposed in the Application between FEI and its parent, FTS, is approved for the taxation year ended December 31, 2023 and all future tax years.
2. Approval of the Tax Sharing Arrangement is subject to the conditions that such transactions are non-utility, that there is no adverse impact on FEI or its customers, and that the existing indemnity agreement between FTS and FEI and the existing certified Directors Resolution remains in place.
3. FEI is directed to notify the BCUC by September 30 of each year when any such Tax Sharing Arrangement takes place and is completed.
4. FEI is required to report to the BCUC within 45 days of any adverse impact to FEI or its customers resulting from the Tax Sharing Arrangement.
DATED at the City of Vancouver, in the Province of British Columbia, this 13th day of October 2023.
BY ORDER
Original signed by:
B. A. Magnan
Commissioner