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 114
First, the Company segmented the proposed AMI project into its major components, defining
them in terms of component cost and percentage of total project cost.
Each component was assessed against AACE guidelines (see the response to BCUC IR1,
Q53.3 for reference) in order to determine the applicable estimate range. The proposed
contingency for each component was then examined to determine if it made sense relative to
the applicable AACE estimate guideline.
In order to arrive at a reasonable “full project” AACE estimate, the last step was to group the
components (excluding regulatory, PST, AFUDC, Capitalized Overhead and contingency costs)
into the variously applicable AACE estimate categories. See below:
As this demonstrates, while the bulk of the proposed project is AACE estimate 2 or better, there
remains a material portion of the proposed project at Class 3 or 4.
Response:
53.5 What is included in the estimate?
The estimate includes:
• Capital costs covering hardware, software, and the work required to implement
them, including project management costs;
• Project development and regulatory costs;
• AFUDC;
• PST;
• Capitalized Overhead; and
• An aggregate contingency for the whole project, as determined through the process