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

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CONFIDENTIAL
NEGOTIATED SETTLEMENT AGREEMENT
TERASEN GAS (VANCOUVER ISLAND) INC.
DATED THURSDAY, NOVEMBER 5
and reflected in revenue requirements after 2011 based on the amortization approved by the
Commission at that time.
21. Allocation of 2009 Revenue Surplus Account (“RSA”) Balance (Application page 322
Item (7)(b))
The Commission approved the creation of a 2009 Revenue Surplus Account in Order No. G-
84-09. TGVI currently forecasts that the RDDA balance will reach zero in 2009 and that a
surplus will be recorded in the 2009 RSA. The actual balance in the 2009 RSA will not be
known until the Commission approves the 2009 year end balance in the RDDA, pursuant to
section 2.10(f) of the Special Direction.
Issue No. 8 in the Commission Panel’s “Issues of Particular Concern to the Commission
Panel” stated:
“Rate Design – should BC Hydro receive any refund for the expected 2009 RDDA surplus?”
The Parties have considered the issue raised by the Commission Panel. The Parties agree,
for the purposes of achieving overall Agreement, that the answer to Commission Panel
Issue No. 8 is, “Yes”, and that the forecast balance in the 2009 RSA of $2.962 million will be
amortized equally over the forecast years 2010 and 2011 to all customers, other than the
VIGJV and TGI Squamish Service Area (TGI Squamish), as follows:
(a) $2.677 million to Core Market
(b) $0.246 million to BC Hydro
(c) $0.039 million to TGW
Any variance between the forecast and actual 2009 RSA balance will be captured in the
RSDA described below.
22. Rate Stabilization Deferral Account (“RSDA”) (Application page 323 Item (7)(c))
Variances between forecast cost of service and actual cost of service, other than O&M, are
items that will be “trued up to actual” as per the Special Direction. Gross O&M will be as
stated in Item 14, and not “trued up to actual” (i.e. variances from forecast O&M specified in
Item 14 will be an at-risk item for the shareholder). The allowed rate of return on Equity will
be adjusted to that approved by the Commission during the period of the settlement and will
not be trued up to actual. For clarity, this means that approved rate of return on equity
percentage will apply to the actual rate base consistent with the methodology employed
since 2003 for TGVI.
The Parties agree that TGVI will establish a RSDA to capture:
(a) differences in 2010 and 2011 between:
APPENDIX A
to Order G-140-09
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