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
Please refer to the response to BCUC IR1 Q69.1.
Response:
Submission Date:
October 5, 2012
Page 215
89.4 Were alternatives to the 20-year economic life for meters considered? If yes,
please list the alternatives considered and comment on why they were ultimately
rejected.
The Company considered 15, 20 and 25 year useful life assumptions. However as discussed in
the responses to BCUC IR1 Q69.1, a 20 year life was assumed.
Response:
89.5 Is FortisBC Inc. aware of other jurisdictions with AMI systems that are using an
economic life other than 20 years? If so, please provide the name of each
jurisdiction.
Currently the only other jurisdictions known to FortisBC using an economic life other than 20
years are FortisAlberta (at 25 years) and Ontario (at 15 years).
Response:
89.6 Please recalculate the NPV of the “Net AMI” project assuming the following
individual scenarios:
• Useful life of new meters of 10 years
• Useful life of new meters of 15 years
• Useful life of new meters of 25 years
For this question, please provide the analysis supporting the NPV estimation,
state all assumptions used, and comment on the likelihood of each event
occurring.
If the depreciation period was set at 10 years for the new AMI meters, the NPV of the Net AMI
benefit is approximately $13.5 million (assuming an 8 percent discount rate) and the cumulative
incremental benefit to rates in year 2025 is approximately 0.58 percent.