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 207
In the less likely scenario specifically outlined in the question, the NPV of the Net Benefit
declines to $21.5 million as presented in the supporting analysis provided as Electronic
Attachment BCUC IR1 87.2.
Response:
87.2.2 Please recalculate the ‘NPV of net benefit’ assuming both events
described above occur (status quo has a five percent per year increase in
total sites, AMI has a five percent per year decline in total sites).
The occurrence of each scenario independently does not seem reasonable for the reasons
detailed in the responses to BCUC IR1 Q87.2 and Q87.2.1 and this probability does not
increase when contemplating that they occur together. FortisBC considers this scenario to be
very unlikely.
The NPV of the Net Benefit declines to ($17.5) million as presented in the supporting analysis
provided as Electronic Attachment BCUC IR1 87.2.
Response:
87.2.3 Please recalculate the ‘NPV of net benefit’ assuming Safety Standard Act
obligations result in a five percent per year decline in the number of total
marijuana sites from current levels under both the AMI and the status quo
scenario.
FortisBC does not consider this a likely scenario as municipal engagement under the Act is not
anticipated at FortisBC. In addition, market forces support the continued production of
marijuana and there are limited geographic options for producers outside of BC. Please also
see the response to BCUC IR1 Q87.2.
Should municipal engagement occur province-wide under the Safety Standards Act, FortisBC
contemplates that the Status Quo theft ratio will return to the 50% level as producers will remain
at FortisBC and seek to avoid detection. (This is a similar outcome to the results of the 14 year
Mission study filed as Exhibit A2-7). The AMI scenario will also deteriorate in that the paying
ratio will only improve to 85% as more producers may attempt to steal. An additional 2 percent
may also be forced to consider alternate energy sources to reduce risk.
In this more probable scenario, the resulting NPV of Net Benefit increases to $48.5 million as
presented in the supporting analysis provided as Electronic Attachment BCUC IR1 87.2.