Orders

 

ORDER NUMBER

G-29-25

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

FortisBC Energy Inc.

Permanent Rates and Agreements under the GGRR

for the Port Kells LNG Fuelling Station in Langley

 

BEFORE:

B. A. Magnan, Commissioner

W. E. Royle, Commissioner

 

on February 10, 2025

 

ORDER

WHEREAS:

 

A.      On November 14, 2024, FortisBC Energy Inc. (FEI) applied to the British Columbia Utilities Commission (BCUC), pursuant to sections 59 to 61 of the Utilities Commission Act, for permanent approval of rates for fuelling services at the liquified natural gas (LNG) fuelling station located at Port Kells in Langley, BC (Port Kells Fuelling Station), as established in three separate fuelling service agreements as amended between FEI and the following customers (Application):

1.       Vedder Transportation Ltd. (Vedder), effective June 8, 2021;

2.       Ken Johnson Trucking Ltd. (Ken Johnson), effective June 8, 2021; and

3.       D. Jones Trucking Ltd. (D. Jones), effective January 1, 2024;

B.      By Order G-56-13, the BCUC accepted that the Greenhouse Gas Reduction (Clean Energy) Regulation (GGRR) established the need for Compressed Natural Gas (CNG) and LNG fuelling stations that are undertaken by FEI as prescribed undertakings as defined by the GGRR, and that these prescribed undertakings are exempt from the Certificate of Public Convenience and Necessity requirements for the term of the GGRR;

C.      By Order G-230-21, the BCUC determined that the Port Kells Fuelling Station met the requirements of a prescribed undertaking as defined by the GGRR. The order also approved the rate design and rates established in the fuelling services agreements between FEI and Vedder (Vedder Fuelling Service Agreement) and between FEI and Ken Johnson (Ken Johnson Fuelling Service Agreement) for LNG fuelling service at the Port Kells Fuelling Station on an interim and recoverable/refundable basis, effective June 8, 2021. The BCUC also directed FEI to file an application seeking permanent rates upon the determination of the actual capital expenditures for the Port Kells Fuelling Station;

D.      By Order G-355-23, the BCUC approved the rates established in the fuelling service agreement between FEI and D. Jones for LNG fuelling service at the Port Kells Fuelling Station (D. Jones Fuelling Service Agreement) on an interim and refundable/recoverable basis, effective January 1, 2024. The order also directed FEI to file an application seeking permanent rates for D. Jones once the BCUC issues a decision on permanent rates for the Port Kells Fuelling Station;

E.       In the Application, FEI states that the total final capital costs of the Port Kells Fuelling Station are greater than the estimated forecast, which results in a proposed permanent capital rate that is greater than that approved on an interim basis, and is partially offset by the increased overall total volume commitment for the initial term;

F.       On May 21, 2024, FEI and D. Jones entered into an amending agreement (Amending Agreement No. 1) to the D. Jones Fuelling Service Agreement to extend the initial term from 2 years to 3 years, add a minimum annual quantity in years 1 and 2 of the initial term, and amend the rates;

G.      FEI also prepared amending agreements to the Vedder Fuelling Service Agreement and Ken Johnson Fuelling Service Agreement, respectively, to adjust, among other things, the capital rate based on the final actual capital costs and updated total volumes at the Port Kells Fuelling Station. In the Application, FEI states that Vedder and Ken Johnson are unwilling to execute the amending agreements;

H.      By Order G-338-24, the BCUC established a regulatory timetable which included FEI notice of the Application to customers at the Port Kells Fuelling Station and a letter of comment process;

I.         On January 7, 2025, Vedder and Ken Johnson jointly filed a letter of comment stating, among other things, that FEI’s decision to use equipment that it knew or ought to have known was inappropriate for the Port Kells Fuelling Station resulted in the increased capital costs and prevented the use of the station, at a significant expense to Vedder and Ken Johnson, for a large portion of the term of their fuelling service agreements, and that these agreements do not provide for any adjustments to the rates based on FEI’s actual costs;

J.        On January 14, 2025, FEI filed its response to Vedder’s and Ken Johnson’s letter of comment stating, among other things, that the issues with the equipment at the Port Kells Fuelling Station were not foreseeable, service at the station was not compromised due to the availability of replacement equipment, the Vedder and Ken Johnson fuelling service agreements were subject to final BCUC approval, and previous BCUC orders made it clear that final rates would be determined based on FEI’s actual costs; and

K.       The BCUC has reviewed the Application and submissions and determines that the establishment of a further regulatory timetable is warranted.

NOW THEREFORE the BCUC orders as follows:

 

1.       A further regulatory timetable is established, as set out in Appendix A of this order.

2.       FEI is directed to provide a copy of this order to Vedder, Ken Johnson, and D. Jones by Wednesday, February 12, 2025.

3.       FEI is directed to provide the BCUC, by Thursday, February 13, 2025, written confirmation of compliance with the notice requirements in Directive 2 of this order.

 

DATED at the City of Vancouver, in the Province of British Columbia, this        10^th        day of February 2025.

 

BY ORDER

 

Electronically signed by Bernard Magnan

 

Bernard Magnan

Commissioner

 

 

Attachment

FortisBC Energy Inc.

Permanent Rates and Agreements under the GGRR

for the Port Kells LNG Fuelling Station in Langley