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
25. Accounting Policy Changes as per Application Part III, Section E - Approvals Sought -
to be effective January 1, 2010
The Parties agree to the following accounting policy changes, as set out in TGVI’s
Application:
(a) Training and Feasibility Study Costs to be treated as O&M expense, rather than capital
(Application Page 438 and 439, Item 18).
(b) Capitalization of Major Inspection and Overhaul Costs, including the creation of new
Asset Classes (Application Page 438 and 439, Item 18).
(c) Capitalization of the Current Service portion of Pensions and OPEBs expense that is
applicable to capital projects (Application Page 438 and 439, Item 18).
(d) Capitalization of Depreciation on Assets used in Construction (Application Page 438 and
439, Item 18).
(e) All capital expenditures, including CPCNs, to be included in plant in service (and rate
base) in the month following the available-for-use date, with depreciation starting at that
time (Application Page 438 and 439, Item 18).
(f) Adoption of the effective interest method for calculating interest expense on long-term
debt (Application Page 438 and 439, Item 18).
26. Various Accounting Related Proposals as per Application Part III, Section E -
Approvals Sought effective January 1, 2010
The Parties agree to the following accounting related changes, as set out in TGVI’s
Application:
(a) Adoption of the Cash Working Capital Lead/Lag Days as set out in the Lead/Lag study
(Application page 438, Item 16d).
(b) The treatment of Customer Security Deposits as part of the unfunded debt, instead of as
a component of working capital (Application Page 438 and 439 Item 18).
(c) The inclusion of the reserve for bad debts as a component of working capital
(Application Page 438 and 439 Item 18).
(d) Consolidated Core Market Administration Expenses (for TGI, TGVI and TGW), including
allocation percentages (Application page 438, Item 16e).
27. Tariff Change Proposals as per Application Part III, Section E - Approvals Sought,
Item 19
The Parties agree to the following Tariff changes, as set out in TGVI’s Application:
APPENDIX A
to Order G-140-09
Page 19 of 102