ORDER NUMBER
G-68-25
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
Creative Energy
South Downtown Cooling Generic Cost of Capital Stage 2 Order G-321-24 Revised Rates
BEFORE:
W. E. Royle, Panel Chair
on March 17, 2025
ORDER
WHEREAS:
A. By Order G-236-23 dated September 5, 2023, the British Columbia Utilities Commission (BCUC) established interim rates, effective January 1, 2024, on a refundable or recoverable basis, for all other utilities, except FortisBC Inc., that use the Benchmark Utility to set their capital structure and equity return pending the BCUC’s final decision on Stage 2 of the Generic Cost of Capital (GCOC) proceeding;
B. On November 29, 2024, the BCUC issued its Decision and Order G-321-24 on Stage 2 of the GCOC proceeding (GCOC Stage 2 Decision). In the GCOC Stage 2 Decision, among other things, the BCUC approved Creative Energy South Downtown District Cooling System (Creative Energy SODO DCS)’s previously established interim 2024 rates as permanent. The BCUC also established Creative Energy SODO DCS’s deemed equity component at 49.0 percent and allowed return on equity at 10.40 percent;
C. In the GCOC Stage 2 Decision, the BCUC directed Creative Energy SODO DCS to:
i. Establish a new GCOC Variance Deferral Account for the Creative Energy SODO DCS, attracting Creative Energy SODO DCS’s weighted-average cost of capital, to record the variance between the previous interim 2024 rates and the rates that would reflect the new cost of capital, effective January 1, 2024, under the GCOC Stage 2 Decision. The GCOC Variance Deferral Account will also capture the difference between any 2025 interim rates before and after incorporation of the new cost of capital under the GCOC Stage 2 Decision;
ii. File a compliance filing by January 31, 2025, which should address the amounts to be added to the GCOC Variance Deferral Account and their disposition, include revised permanent rates that reflect the new cost of capital for 2025, and as applicable, file revised tariff pages with the BCUC by January 31, 2025.
D. On February 5, 2025, Creative Energy SODO DCS filed its compliance filing in accordance with the GCOC Stage 2 Decision (Application). Creative Energy SODO DCS requests approval for the following in its Application:
i. Set the capacity charge at $10.81/kilowatt/month for 2025, effective January 1, 2025;
ii. Record the difference between revenue collected under the 2024 Capacity Charge and the rate reflecting the new cost of capital, as well as any variance between interim and permanent rates in 2025 before a decision is issued on this Application, in the GCOC Variance Deferral Account; and
iii. Recover the full GCOC Variance Deferral Account balance over a six-month amortization period starting in March 2025.
E. On February 26, 2025, the BCUC issued Staff Questions No. 1 to Creative Energy SODO DCS, and Creative Energy SODO DCS provided its response on March 3, 2025;
F. In its response, Creative Energy SODO DCS submitted that it is open to recovering the full GCOC Variance Deferral Account balance over a nine-month amortization period as long as the recovery can be completed in 2025; and
G. The BCUC has reviewed the Application including the evidence and submissions in the proceeding and makes the following determinations.
NOW THEREFORE pursuant to sections 59 to 61 of the Utilities Commission Act the BCUC orders as follows:
1. Creative Energy SODO DCS is approved to set the capacity charge on a permanent basis at $10.81/kilowatt/month for 2025, effective January 1, 2025.
2. Creative Energy SODO DCS is approved to record a principal amount of $12,271, attracting Creative Energy SODO DCS’ weighted-average cost of capital, in the GCOC Variance Deferral Account. The amount recorded in the GCOC Variance Deferral Account reflects the difference between revenue collected under the 2024 Capacity Charge and the rate reflecting the new cost of capital for 2024, as well as the variance between the interim and permanent rate in January and February of 2025.
3. Creative Energy SODO DCS is directed to amortize the GCOC Variance Deferral Account balance over a nine-month period, starting in March 2025 or on the first day of the month of the next Creative Energy SODO DCS customers’ billing cycle, in accordance with the recovery mechanism specified in response to Staff Question 2.4.1.
4. The tariff page filed as part of the Application is accepted as filed.
5. Creative Energy is directed to file its next revenue requirements application by August 29, 2025 to establish the Capacity Charge effective January 1, 2026.
DATED at the City of Vancouver, in the Province of British Columbia, this 17th day of March 2025.
BY ORDER
Electronically signed by Wendy Royle
W. E. Royle
Commissioner