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 257
107.4.2 Based on the above analysis, please estimate how long it would
likely be before the residential customer bill savings would reflect
those assumed in the Navigant study.
The Navigant study contains assumptions on customer response rates and capacity/energy
savings that did not rely on any set of specific rate assumptions. No bill savings were assumed
or presented by Navigant directly. The per-participant energy savings presented in Table 6.5a
of the Application were derived by the Company from the overall energy savings and
participation rates provided by Navigant. The participant per-participant energy savings are
assumed to occur in year one following implementation. Using the constraints regarding pricing
provided in the above information requests would not yield these bill savings in any year.
Please also refer to the response to BCUC IR1 Q110.4.
Response:
107.4.3 Does FortisBC consider that the Navigant assumptions regarding
customer response to a FortisBC TOU rate are optimistic? Please
explain why or why not.
FortisBC considers that the response rates recommended by Navigant, (in the 20%-30% range)
are reasonable given that it is based on the BC Hydro CRI experience and represents results
produced by a voluntary group of participants. Should FortisBC choose and be permitted to
implement a TOU rate in the future, it would most likely be as an alternative to the existing
Residential Conservation Rate. Customers who opt in to such a rate are assumed to be
responsive and as such the Company does not view the assumptions used by Navigant to be
optimistic.
Response:
107.5 Please explain how FortisBC can offer optional TOU rates to residential
customers on stepped rates without resulting in a significant number of ‘freeriders’.
For example, customers who consume more energy than average at the
higher Tier-2 price may see significant bill savings from a switch to a TOU rate
without making any changes to their consumption pattern.
The Company considers that a certain amount of free-ridership is going to occur on any
conservation rate that it may implement. There are currently customers who benefit financially