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

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CONFIDENTIAL
NEGOTIATED SETTLEMENT AGREEMENT
TERASEN GAS INC.
DATED THURSDAY, NOVEMBER 5
with this Application, Category B Capital has been reduced by $1 million and Category C IT
Capital has been reduced by $2 million.
The revised Category B Capital Expenditures, reflecting both the CPCN adjustment and the
$1 million reduction in spending, are now $17.4 million in 2010 and $14.9 million in 2011.
The revised Category C Capital Expenditures, reflecting the $2 million IT Capital reduction,
are now $32.8 million in 2010 and $32.7 million in 2011.
19. Gross O&M (to be recovered from gas customers)
The Parties agree that the proposed gross O&M, before shared service allocations,
recoverable from gas customers for 2010 and 2011 is reduced from the amounts included in
the original Application by $4.0 million in 2010 and a further $1.5 million (for a total impact of
$5.5 million) in 2011. This reduction of Gross O&M will result in a reduction in the pool of
costs subject to the Shared Services Agreement with TGVI and with TGW by an estimated
$3.3 million in 2010 and $4.8 million in 2011. Therefore, and as discussed in Item 21, the
final Gross O&M to be included in TGI’s cost of service for 2010 and 2011 will be
determined based on the Shared Services and Corporate Services allocations determined in
the TGVI RRA.
20. Interest Expense
The Parties agree that TGI will update its assumptions around both the issuance of longterm
debt and the associated interest rates. TGI has determined that Long-term Debt
Series 25 will not be issued December 1, 2009 as originally forecast and is now anticipated
to be issued April 1, 2010. In addition, the interest rate forecast for Long-term Debt Series
26, to be issued July 1, 2011, has been revised downwards from 6.13 per cent to 5.65 per
cent.
21. Shared Services/Corporate Services Allocations
APPENDIX A
to Order G-141-09
Page 12 of 110
The 2010 and 2011 revenue requirements stipulated in this Agreement are based on TGI’s
proposed Shared Services and Corporate Services allocation for 2010 and 2011. The
Parties acknowledge, however, that the final amount allocated to TGI for Shared Service
and Corporate Services cannot be confirmed until the Commission determines the TGVI
RRA. The Parties agree that if the amounts allocated to TGVI for Shared Services and/or
Corporate Services for 2010 or 2011 changes from that agreed to in this Agreement as a
result of a settlement or decision in the concurrent TGVI RRA proceeding, then the
amount(s) allocated to TGI and its revenue requirements for 2010 and 2011 will be updated
by a corresponding amount to ensure recovery of all of the combined Corporate Services
and Shared Services costs.