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)
Please see the response to BCUC IR1 Q53.4.
Response:
Information Request (IR) No. 1
Submission Date:
October 5, 2012
Page 118
53.13 Provide a breakdown of the CPCN Development/Approval costs being applied.
The CPCN Development/Approval costs of $4.915 million listed in the table above are the same
as the AMI Project Development and Regulatory costs listed in the pre-deployment costs
column, and include those costs related to the 2007 AMI application, the 2012 AMI application,
consultants, and the regulatory process. Please refer to the response to BCUC IR1 Q50.1.2 for
a breakdown of the forecast costs associated with the regulatory process.
As noted in the response to BCUC IR1 Q53.1 above, the pre-deployment costs of $4.913 million
as noted in the table above, and also presented in Table 5.1.1.a from the Application are
incorrect, and should read $4.915 million. Please refer to Errata No. 1.
Response:
53.14 Please identify the expenditures and benefits that are under the control of
FortisBC for which they could possibly be held accountable in a future prudency
review.
FortisBC respectfully submits that an application for a CPCN filed pursuant to sections 45 and
46 of the Utilities Commission Act should be reviewed and tested to the Commission’s
satisfaction prior to the Commission’s issuance of a CPCN. The costs and benefits of the
proposed project are forecast on the best information available at the time of application for a
CPCN. If there were significant variances between forecast and actual costs then the
Commission may determine whether a prudency review is required and conduct such a review
pursuant to sections 59 “Discrimination in rates” and 60 “Setting of Rates” of the Utilities
Commission Act. These sections of the Act essentially establish the rules that the Utility and the
Commission must abide by in setting rates.
It is not possible to pre-determine which, if any, costs could possibly be the subject of a future
prudency review. Typically, if the Commission felt that a prudency review was warranted, it
would establish a phase 1 process to determine whether or not there were reasonable grounds
to question the prudence of the decisions of FortisBC that led to the expenditure and whether
the Commission should establish a Stage 2 proceeding to review the prudency of the
expenditures prior to allowing them into rates.