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
42.0 Reference: Project Costs and Benefits
Response:
Exhibit B-1, Tab 4.0, Table 4.3.1.a, p. 57;
Exhibit B-1, Tab 5.0, Table 5.1.a, p. 70;
Exhibit B-3, Tab “Gross AMI”, Line No. 35
Project Costs
Submission Date:
October 5, 2012
Page 76
According to Table 4.3.1.a, the final phase of the AMI project, the “Transfer” phase, is in
Q4 2015.
Exhibit B-3, Tab “Gross AMI” Line No. 35 (Cumulative Construction Cost) identifies
$49,530 thousand in estimated cumulative construction costs for the AMI project
between 2013 and 2015.
Exhibit B-3, Tab “Gross AMI” Line No. 29 (Meter Growth and Replacement Costs)
identifies $982 thousand in estimated meter growth and replacement costs for the AMI
project between 2013 and 2015.
Exhibit B-3, Tab “Gross AMI” Line No. 32 (IT Hardware, Licensing and Support Costs)
identifies $860 thousand in estimated costs for the AMI project between 2013 and 2015
and $12,767 thousand in estimated costs between 2013 and 2032.
Table 5.1.a identifies $47,689 thousand in estimated capital costs for the AMI project
between 2013 and 2015, inclusive.
42.1 Please explain why the estimated meter growth and replacement and IT
hardware, licensing and support costs of the AMI project between 2013 and 2015
are not included in the estimated capital costs in Table 5.1.a.
Meter growth and replacement, as well as IT hardware, licensing and support costs all represent
normal sustaining capital expenditures required for the ongoing operation of the utility.
As the costs are “sustaining” in nature and will continue after the project is complete, FortisBC
chose to keep these expenditures separate from the proposed AMI project capital costs on Line
27. The sustaining capital expenditures are still included in the overall AMI project financial
analysis, so the overall NPV and rate impacts would not be affected if the sustaining capital
expenditures were instead added to project capital expenditures.
42.2 Please separate the IT Hardware, Licensing and Support Costs per Exhibit B-3,
Tab “Gross AMI” Line No. 32 into the following costs categories for each year
between 2013 and 2032.