ORDER NUMBER
G-341-23
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
Pacific Northern Gas Ltd.
Tax Benefit Deferral Account for the West Division
BEFORE:
M. Jaccard, Commissioner
on December 12, 2023
ORDER
WHEREAS:
A. On November 2, 2023, Pacific Northern Gas Ltd. (PNG) submitted an application (Application) to the British Columbia Utilities Commission (BCUC), pursuant to sections 59 to 61 of the Utilities Commission Act (UCA) for approval to establish a Tax Benefit deferral account for the West Division (PNG-West) to record recently assessed income tax benefits arising from Scientific Research and Experimental Development (SR&ED) claims, as well as potential future tax benefits, including possible SR&ED claims for future years. PNG proposes that the deferral account attract interest at its short-term interest rate and that the disposition of the deferral account balance be addressed in the next Revenue Requirements Application (RRA) proceeding, presently anticipated for 2025-2026;
B. In the Application, PNG stated that it received a favourable assessment from the Canada Revenue Agency (CRA) in October 2023 for its 2021 and 2022 SR&ED claims, resulting in a net tax benefit of $0.942 million after tax and contingency-based consultant fees. PNG opted not to recognize any tax benefit until such time as there was evidence supporting that its SR&ED claims had been reviewed and assessed by the CRA; and
C. The BCUC has completed its review of the Application and makes the following determinations.
NOW THEREFORE pursuant to section 59 to 61 of the UCA, the BCUC orders as follows:
1. PNG is approved to establish the Tax Benefit deferral account for PNG-West, accruing interest at PNG’s short-term interest rate.
2. PNG is approved to record in the Tax Benefit deferral account the recently assessed tax benefits arising from its 2021 and 2022 SR&ED claims as well as potential future tax benefits.
3. PNG is directed to include a proposal for the disposition of the existing balance of the Tax Benefit deferral account as part of its next RRA for PNG-West.
DATED at the City of Vancouver, in the Province of British Columbia, this 12th day of December 2023.
BY ORDER
Original signed by:
M. Jaccard
Commissioner