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

– 14 –
CONFIDENTIAL
NEGOTIATED SETTLEMENT AGREEMENT
TERASEN GAS INC.
DATED THURSDAY, NOVEMBER 5
The Parties agree that, instead, TGI will continue to amortize the balance of SCP
Landscaping costs for 2009 as contemplated in the approved rates for 2009 and consistent
with prior years, resulting in a deduction of approximately $0.3 million for Regulatory Tax
purpose in 2009 and a related tax benefit. TGI will then deduct the remaining balance
(approximately $7.9 million) in 2010 with the full value of the remaining benefit
(approximately $2.3 million) going to customers reflected as a reduction in revenue
requirements in 2010.
The Parties agree that the acceleration of this benefit to customers was the result of tax
planning actions taken by TGI and acknowledge that the agreed upon treatment set out
above reflects customers receiving 100% of the value of the deductions of the SCP
Landscaping costs. The intervenor Parties to this Agreement will not seek any additional
recovery in respect of SCP Landscaping costs.
27. Overheads Capitalized
The Parties agree to a change in the overheads capitalized rate to 14 per cent of Gross
O&M for 2010 and 2011 which reflects the approximate actual Overheads Capitalized rate
for 2009.
28. International Financial Reporting Standards (“IFRS”) 2010 Impact
Issue No. 4 in the Commission Panel’s “Issues of Particular Concern to the Commission
Panel” stated:
“International Financial Reporting Standards (“IFRS”) – no IFRS impact in 2010.”
The Parties agree to defer the 2010 revenue requirement impact of IFRS to be recovered in
rates in 2011 (relating specifically to capitalization of the current service portion of pension
and OPEB related costs; capitalization of inspection costs; and timing of depreciation
expense) up to a maximum of $1.0 million. Amounts, if any, over $1.0 million would be
deferred and recovered in rates after 2011 based on the amortization approved by the
Commission at that time.
PART III – REQUESTS UNCHANGED FROM THE APPLICATION
The Parties agree to the following items set out in this section, which are consistent with the
proposals in TGI’s Application.
29. Rate Proposals as per Application Part III, Section D .1 - Approvals Sought
The Parties agree to the following rate proposals, as set out in TGI’s Application:
APPENDIX A
to Order G-141-09
Page 15 of 110