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

2. Whole Agreement
– 3 –
CONFIDENTIAL
NEGOTIATED SETTLEMENT AGREEMENT
TERASEN GAS INC.
DATED THURSDAY, NOVEMBER 5
Unless otherwise stated in this Agreement, portions of this Agreement cannot be removed
or changed by the Commission without nullifying the whole Agreement.
3. TGI to Manage Business
The Parties agree that TGI will have the discretion to manage its business and determine
how best to allocate the overall O&M and Capital expenditures stipulated in this Agreement.
4. Final IFRS Rate-regulated Activity Standard
The Parties acknowledge that this Agreement is predicated on the Final IFRS Rateregulated
Activity Standard permitting the financial accounting treatment contemplated in
this Agreement in the manner outlined in the current Exposure Draft on Rate-regulated
Activities. The Parties agree that if, in TGI’s opinion, the Final IFRS Rate-regulated Activity
Standard differs from the current Exposure Draft on Rate-regulated Activities so as not to
permit the financial accounting treatment contemplated in this Negotiated Settlement
Agreement, which among other things anticipates the recognition of regulatory assets and
liabilities for external reporting purposes, then TGI is at liberty to apply to the Commission
during the period of this Agreement for a determination of that issue, and to seek changes in
the regulatory treatment contemplated in this Agreement to accord with the Final IFRS Rateregulated
Activity Standard, with the resulting impacts flowed through into rates
commencing in 2011.
PART II – AGREED CHANGES FROM THE APPLICATION
5. Delivery Rates
The Delivery rate changes for 2010 and 2011 that would flow from this Agreement would be
a decrease of 1.73 per cent in 2010 and an increase of 3.93 per cent in 2011, subject to
being updated as contemplated in this Agreement. Issue No. 5 in the Commission Panel’s
“Issues of Particular Concern to the Commission Panel” stated:
“2010 Rate Changes – in the event that a 2010 rate reduction were to occur as a result of
negotiations, the current rates should remain unchanged and place the revenue surplus into
a deferral account to apply against 2011 and future rate increases with a phase in
amortization that strives for rate stability.”
APPENDIX A
to Order G-141-09
Page 4 of 110
Therefore, the Parties agree that this Agreement will not result in a decrease in delivery
rates for 2010 and that the 2010 forecast revenue surplus will be recorded in a 2010
Revenue Surplus Deferral Account and be applied to offset any forecast increase in delivery
rates in 2011. The forecast 2010 revenue surplus of $9.2 million per Schedule 1 included in
Part IV of this Agreement, is recorded in the 2010 Revenue Surplus Deferral Account, which