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

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– 15 –<br />

CONFIDENTIAL<br />

NEGOTIATED SETTLEMENT AGREEMENT<br />

TERASEN GAS INC.<br />

DATED THURSDAY, NOVEMBER 5<br />

APPENDIX A<br />

to Order G-141-09<br />

Page 16 of 110<br />

(a) Allocation of delivery margin rate changes - Annual margin increase allocated to variable<br />

(volumetric & demand) based delivery charges, with no change to fixed (basic and<br />

admin fee) charges in each year (Application Page 513, Item 1).<br />

(b) Earnings Sharing Mechanism (ESM) rider (incl. end of term capital) - Change the ESM<br />

rate rider to be ($0.040)/GJ effective January 1st, <strong>2010</strong>, and change the estimated ESM<br />

rate rider to be ($0.046)/GJ effective January 1st. <strong>2011</strong>. ESM amount to include End of<br />

Term Capital phase out and to be amortized over two years. The final <strong>2011</strong> rider amount<br />

will be adjusted based on 2009 actual earnings. TGI will submit an application to change<br />

the <strong>2011</strong> ESM rate rider at the same time it submits its Q4 quarterly gas cost report in<br />

early December <strong>2010</strong> (Application Page 513, Item 3).<br />

(c) Rate Stabilization Adjustment Mechanism (RSAM) rider - Change the RSAM rate rider to<br />

be ($0.053)/GJ effective January 1st, <strong>2010</strong> and change the estimated RSAM rate rider to<br />

be ($0.052)/GJ effective January 1st, <strong>2011</strong>. The <strong>2011</strong> rider amount will be adjusted<br />

based on 2009 actual results and <strong>2010</strong> year to date actual results. TGI will submit an<br />

application to change the <strong>2011</strong> RSAM rate rider at the same time it submits its Q4<br />

quarterly gas cost report in early December <strong>2010</strong> (Application - Page 514 Item 4).<br />

30. Accounting Policy Changes as per Application Part III, Section D.1 - Approvals<br />

Sought - to be effective January 1, <strong>2010</strong><br />

The Parties agree to the following accounting policy changes, as set out in TGI’s<br />

Application:<br />

(a) Training and Feasibility Study Costs to be treated as O&M expense, rather than capital<br />

(Application Page 515 and 516, Item 11).<br />

(b) Capitalization of Major Inspection Costs, including the creation of a new Asset Class<br />

(Application Page 515 and 516, Item 11).<br />

(c) Capitalization of the Current Service portion of Pensions and OPEBs expense that is<br />

applicable to capital projects (Application Page 515 and 516, Item 11).<br />

(d) Capitalization of Deprecation on Assets used in Construction (Application Page 515 and<br />

516, Item 11).<br />

(e) All capital expenditures, including CPCNs, to be included in plant in service (and rate<br />

base) in the month following the available-for-use date, with depreciation starting at that<br />

time (Application Page 515 and 516, Item 11).<br />

(f) Treatment of Vehicle Lease as a capital lease and inclusion of the NBV of vehicles in<br />

rate base (Application Page 515 and 516, Item 11).<br />

(g) Discontinuation the Software Tax Credit as part of the CIAC additions (Application Page<br />

515 and 516, Item 11).

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