FEI-FEVI 2010 EEC Report filed March 31, 2011 - FortisBC

1.0 BACKGROUND AND REGULATORY PROCESS
1.1 The Application
On May 28, 2008 Terasen Gas Inc. (“TGI”) and Terasen Gas (Vancouver Island) Inc. (“TGVI”)
(collectively “Terasen”) filed its Energy Efficiency and Conservation (“EEC”) Programs Application
(“Application”) with the British Columbia Utilities Commission (“the Commission”).
In the Application, Terasen requested an order or orders approving the following:
• Increases of EEC expenditures in the period 2008‐2010 to $46.944 million for TGI and
$9.667 million for TGVI, a combined total of $56.6 million;
• Capitalisation of incremental EEC expenditures as a regulatory asset deferral account on an
after tax basis and amortisation of the account over 20 years;
• An increase in the amortisation period to 20 years for incentive amounts that are added to
deferral accounts for 2008 and 2009 as part of the 2008‐2009 extension of the 2004‐2007
TGI PBR Settlement Agreement (“TGI PBR Extended Settlement”) approved by Order G‐33‐
07 and the 2008‐2009 extension of the 2006‐2007 TGVI Revenue Requirements Settlement
Agreement (“TGVI RR Extended Settlement”) approved by Order G‐34‐07;
• Changes to the benefit‐cost analysis undertaken to evaluate EEC measures as outlined
below:
o Implementation of a portfolio approach to benefit‐cost analysis such that the Total
Resource Cost (“TRC”) test for all programs combined must return an overall
combined result of one or more;
o Elimination of the requirement to include free‐riders in benefit‐cost tests;
o Inclusion of the benefits of savings associated with implementation of a regulation
as a result of EEC programs aimed at preparing the marketplace for the introduction
of regulation of minimum efficiency levels in equipment, buildings or energy
systems
o Inclusion of the impact of carbon‐pricing as one of the inputs to the benefit‐cost
tests;