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

Account 362.00 - Distribution Station Equipment, represents 15% of the depreciable
plant studied. The retirements, additions and other plant transactions for the period 1960
through 2009 were analyzed by the retirement rate method. The original survivor curve as
plotted on page IV-40, indicates small retirement ratios early in the assets life and increase
in frequency at approximately ages 13, 26 and 36. The company has recently finished
upgrading a number of the older distribution substation facilities. It is not anticipated that
the new assets which were installed will have different retirement patterns than the ones
they have replaced. The Iowa 55-S3 was selected and is a better match for the historical
data then the current Iowa 45-R2.5. The Iowa 55-S3, provides a reasonable interpretation
of the historical retirement experience and recognizes the expectation that future
retirements will most likely follow the same trends as the past.
Account 353.00 - Transmission Substation Equipment, represents 11% of the
depreciable plant studied. The retirements, additions and other plant transactions for the
period 1960 through 2009 were analyzed by the retirement rate method. This account
consists primarily of the investment in transmission substations. As indicated in the original
survivor curve as plotted at page IV-26, this account has historically been subjected to only
very modest retirement activity. Recently Fortis has constructed a number of new terminal
stations as well as rebuilt some of the existing substations. The company does not expect
to continue building with the same frequency in the future and does not believe these new
builds with have a different retirement pattern than the historic indications. The movement
from an Iowa 50-S3 to a 50-S4, provides a more reasonable interpretation of the historical
retirement experience and recognizes the expectation that future retirements will most likely
follow the same trends as the past.
Appendix BCUC IR1 69.4