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

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Response:
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 175
existed province wide in 2010. As FortisBC serves approximately 6 percent of residential
electric customers in BC, 792 sites were calculated to exist in the Company’s service
area. This figure is assumed to increase at 2 percent annually in the status quo model,
resulting in an overall figure of 824 grow sites in FortisBC’s service territory in 2012. “
Concerning the “Probable Status Quo Forecast”, Exhibit B-1, page 83 notes that
“FortisBC projects that the number of marijuana grow sites will continue to increase at 2
percent annually…”
79.1 Please discuss the factors considered in determining that the number of indoor
marijuana grow operations is expected to grow by two percent annually from
2010 through to 2032. Please provide the evidence considered, specifically the
information used and the source from which the information was obtained.
Two percent is the forecast customer growth between 2011 and 2013 as filed in the FortisBC
2012-2013 Revenue Requirements Application, Table 3C. FortisBC chose to use this figure for
inflating marijuana grow operation numbers through 2032 since it is based on current forecasts.
If FortisBC instead used the P.E.O.P.L.E. 36 3 estimate of 1.2 percent average annual
population growth between 2011 and 2036 for the Status Quo marijuana operation growth, the
NPV of the theft benefit would increase to $42.1 million.
Response:
79.1.1 Please confirm if the 2011 study by Dr. Plecas assesses the expected
growth rate of indoor marijuana grow sites in BC. If confirmed, please
discuss the assessment performed and the conclusions drawn in the
study.
The 2011 study by Dr. Plecas does not assess the expected growth rate of indoor marijuana
grow sites in BC. The 2010 provincial figure of 13,206 used in the study is calculated using the
economic model proposed by Easton in the Easton Policy Paper (please see the response to
BCUC IR1 Q74.1). The inputs in the formula are the number of grows founded by police, the
risks of operating and the ratio of product value to cost. The formula does not contemplate
potential growth rates in the number of provincial sites.
3 (http://www.bcstats.gov.bc.ca/Files/48b3eee9-248f-49c2-94a5-b9422efb6e8/BritishColumbiain2036PEOPLE36.pdf)