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 209
• Commercial generators require considerable maintenance and the associated expertise;
and
• The capital and operating costs for a commercial sized generator are much higher than
paying for electricity from FortisBC.
In light of Easton’s risk versus reward model presented in the response to BCUC IR1 Q83.4.1 it
does not seem likely that five percent of marijuana producers will adopt alternative energy
sources. If municipalities engage under the Safety Standards Act, it is possible that up to two
percent of marijuana producers will be forced to consider alternative energy sources in the AMI
Probable scenario rather than cease production. In this alternative scenario presented in the
response to BCUC IR1 Q87.2.3 the NPV of Net Benefit increases to $48.5 million.
In the scenario specifically outlined in the question, the NPV of Net Benefit declines to $23.4
million as presented in supporting analysis provided as Electronic Attachment BCUC IR1 87.2.
Response:
87.2.6 Please recalculate the ‘NPV of net benefit’ using a starting assumption
that 50 percent of marijuana grow operations are diverting electricity.
This scenario does not seem likely in light of FortisBC internal data from 2006-2011. FortisBC
has used the average theft ratio from 2008-2011 to arrive at the 25% estimate used in the
Application.
The NPV of Net Benefit increases to $83.1 million as presented in the supporting analysis
provided as Electronic Attachment BCUC IR1 Q87.2
Response:
87.2.7 Please recalculate the ‘NPV of net benefit’ assuming marijuana grow
operations diverting electricity are 50 percent larger on average than grow
operations not diverting electricity.
FortisBC considers this scenario possible since the 50% size differential between paying and
theft sites is supported by the findings reported in the Mission 14 year review filed by
Commission staff as Exhibit A2-7. The Company has observed that five paying licensed
producers in FortisBC shut down by the RCMP in 2012 for illegal production averaged 54 lights
per site versus the 30 light averages for theft sites.