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

5.0 AMORTISATION OF EEC EXPENDITURES
Terasen proposes to amortise its EEC expenditures, including both program, and incentive and
rebate costs, over a 20 year period, based on a calculation of the 22.5 years as the weighted
average measurable life of the proposed appliance and energy system installations. Terasen’s
weighted average calculation is based on achieving estimated volumes, mix and lives of
installations for the various measures being proposed. (Exhibit B‐1, p. 80, and Appendix 40.2)
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FortisBC and BC Hydro each use 10 year amortisation periods. (Exhibit B‐2, p. 95) Terasen states:
“…research failed to uncover any examples where utilities are using or proposing amortisation
periods as long as 20 years” for DSM programs. (Exhibit B‐2, p. 97)
Commission Determination
The Commission Panel rejects the 20 year amortisation period proposed by Terasen. The
Commission panel considers the underlying forecast assumptions on which the Terasen
methodology is based to be inherently uncertain, and deserving little weight. The Commission
Panel does consider that a ten year amortisation period provides a reasonable balance, considering
both the DSM objectives and customer impact. Terasen is directed to base its amortisation of
approved EEC expenditures over periods not to exceed 10 years.