FortisBC Inc. (FortisBC) Application for a Certificate of Public ...

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FortisBC Inc. (FortisBC or the Company)
Application for a Certificate of Public Convenience and Necessity
for the Advanced Metering Infrastructure Project
Response to British Columbia Utilities Commission (BCUC or the Commission)
Information Request (IR) No. 1
Submission Date:
October 5, 2012
Page 106
Year 2013 2013 2014 2014 2014
Quarter Q3 Q4 Q1 Q2 Q3
($000s)
Capital Spend $3,391 $10,172 $2,475 $2,475 $5,475
AFUDC $28 $140 $248 $289 $356
Response:
51.3 Please confirm how the Capitalized Overhead for the AMI project was
calculated, including the percentage applied and the dollar value of
overhead costs used.
Capitalized Overhead was calculated by applying a capitalized overhead rate of 7 percent on
the average capital expenditure in the year as detailed below:
2013 2014 2015
Capital Expenditure $ 12,500 $ 14,274 $ 15,323
Capitalized Overhead $ 875 $ 999 $ 1,073
52.0 Reference: Project Costs and Benefits
Response:
Exhibit B-1, Tab 5.0, Section 5.2.1, p. 75
Discount Rate
The Reasons for Decision to Commission Order G-168-08 noted the following on page
25:
“The Commission panel also considers that the selection of discount rates and
evaluation periods are matters of judgment and encourages FortisBC to provide
expanded justification for the base assumptions used in its analyses.”
52.1 Please confirm FortisBC Inc’s after-tax weighted average cost of capital.
The Company’s after-tax weighted average cost of capital is forecast to be 6.7 percent for 2012
and 6.6 percent for 2013.