Fred James Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected]
June 26, 2020
Ms. Marija Tresoglavic Acting Commission Secretary and Manager Regulatory Support British Columbia Utilities Commission Suite 410, 900 Howe Street Vancouver, BC V6Z 2N3
Dear Ms. Tresoglavic:
RE: Project No. 1599047 British Columbia Utilities Commission (BCUC or Commission) British Columbia Hydro and Power Authority (BC Hydro) FortisBC Evacuation Relief Tariff Amendment Applications
BC Hydro writes to provide our Reply Submission in respect of our Evacuation Relief Tariff Amendment Application.
Yours sincerely,
(for) Fred James Chief Regulatory Officer
aj/rh
Enclosure
Copy to: FortisBC Attention: Doug Slater electricity.regulatory.affairs@fortisbc.com
British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3 www.bchydro.com
BC Hydro Evacuation Relief Tariff Amendment Application
Reply Submission
British Columbia Hydro and Power Authority
June 26, 2020
Reply Submission British Columbia Hydro and Power Authority June 26, 2020
Table of Contents
Part I Overview ...... 1 Part II Reply to BCOAPO’s Final Argument ...... 1 Part III Reply to CEC’s Final Argument ...... 4 Part IV Conclusion ...... 7
BC Hydro Evacuation Relief Tariff Amendment Application Page i Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 Part I Overview
2 1. Two intervenors, the BC Old Age Pensioners’ Association, Active Support
3 Against Poverty, Council of Senior Citizens’ Organizations of BC, Disability
4 Alliance BC, Tenant Resource and Advisory Centre and Together Against
5 Poverty Society (BCOAPO) and the Commercial Energy Consumers
6 Association of British Columbia (CEC), participated in this proceeding
7 concerning BC Hydro’s application to approve the proposed evacuation relief
8 amendments (Evacuation Relief) to the Electric Tariff Terms and Conditions
9 (Electric Tariff).1
10 2. With some suggested adjustments, both intervenors generally support providing
11 Evacuation Relief. CEC supports the regulatory account treatment proposed by
12 BC Hydro. BCOAPO supports the regulatory account treatment, with a caveat
13 concerning whether it is appropriate that costs be borne by BC Hydro’s
14 ratepayers or its shareholder.
15 3. In this Reply Argument, BC Hydro will address issues raised in the final
16 arguments of BCOAPO and CEC. BC Hydro is not opposed to BCOAPO’s
17 proposal to include a waiver of charges for Dwellings destroyed immediately
18 before or after an Evacuation Order during a State of Emergency. BC Hydro is
19 opposed to the proposals recommended by CEC, as those suggested terms
20 are not in the interest of ratepayers.2
21 Part II Reply to BCOAPO’s Final Argument
22 4. BCOAPO supports the implementation of Evacuation Relief and has requested
23 two further refinements to Evacuation Relief.
1 BCOAPO Final Argument, filed June 16, 2020; CEC Final Argument, filed June 16, 2020. 2 Unless otherwise noted, all capitalized terms have the same definitions as set out in the Electric Tariff, including the proposed Evacuation Relief amendments.
BC Hydro Evacuation Relief Tariff Amendment Application Page 1 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 5. As a further refinement to Evacuation Relief, BCOAPO has requested that
2 section 5.8.4 of Evacuation Relief be expanded to include Medium General
3 Service (MGS) and Large General Service (LGS) Customers where there is
4 one meter and one account for service to the common area of a multiple
5 occupancy building and all residential units.3
6 6. The requested revision from BCOAPO is not necessary because:
7 a. If service to the residential units and common areas in a multiple
8 occupancy building is measured and billed from a single meter, the service
9 would be Residential Service and the appropriate rate for such service
10 would be one of the rate schedules for Residential Service. Residential
11 Customers are already included in the proposed Evacuation Relief; and
12 b. If there are one or more commercial Premises in the multiple occupancy
13 building, then service to the entire building would be MGS or LGS. As a
14 result, the situation contemplated by BCOAPO does not arise.
15 7. The second refinement proposed by BCOAPO would be to revise section 5.8.2
16 of the Evacuation Relief amendments concerning destruction of a Dwelling.
17 Specifically, BCOAPO recommends revising the waiver of charges for
18 destroyed Dwellings to include Customers whose Dwellings were destroyed
19 outside of the term of an Evacuation Period. 4
20 8. To the extent that the proposed revision applies to the destruction of a Dwelling
21 arising from the cause of a State of Emergency resulting in an Evacuation
22 Order for the area where the Dwelling was destroyed, BC Hydro is not opposed
23 to this suggested refinement.
3 BCOAPO Final Argument, page 9. 4 BCOAPO Final Argument, page 11.
BC Hydro Evacuation Relief Tariff Amendment Application Page 2 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 9. In response to BCOAPO’s proposal, and subject to approval by the
2 Commission, the proposed section 5.8.2 of the Electric Tariff can be further
3 amended by adding the underlined portion below:
4 In addition to the charges waived in paragraph 1 above, if an 5 Evacuee Customer’s Dwelling is destroyed during the 6 Evacuation Period, BC Hydro waives the following charges for 7 the Evacuee Customer:
8 (a) All outstanding charges for Service for the period immediately after the last 9 billing period, up to the date on which the Dwelling was destroyed; and 10 (b) The Service Connection charge as set out in section 3.14 (Service 11 Connection Charges), applicable to the restoration of the same Service at a 12 Dwelling that the Evacuee Customer rebuilds, provided that the Service 13 Connection charge is not recoverable as part of the Evacuee Customer’s 14 insurance.
15 In the event that a Dwelling is destroyed immediately preceding 16 or following the Evacuation Period, BC Hydro may, in its sole 17 discretion, waive the charges set out in this subsection. For 18 clarity, the charges waived in paragraph 2(b) do not include 19 costs estimated by BC Hydro to construct, including, but not 20 limited to, any Extension or Optional Facilities.
21 10. In its Final Argument, BCOAPO sets out the following question:
22 whether the current calculations of the Domestic Revenue 23 variance for the purposes of the Non-Heritage Deferral Account 24 excludes the foregone revenues BC Hydro proposes to defer to 25 the Storm Restoration Costs Regulatory Account or whether the 26 calculation of the domestic revenue variance captured in 27 Non-Heritage Deferral Account will need to specifically altered 28 [sic] to address this issue.5
29 11. BC Hydro clarifies that variances between plan and actual domestic revenues
30 (including Basic Charges, Energy Charges, and Minimum Charge for the
31 service and rate schedules identified on page 6, item 2 of the Application, with
32 the exception of the Customer Crisis Fund Rate Rider) would have been
33 captured in the Non-Heritage Deferral Account as part of the domestic revenue
5 BCOAPO Final Argument, page 16.
BC Hydro Evacuation Relief Tariff Amendment Application Page 3 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 variance, prior to the proposed regulatory treatment of revenue impacts outlined
2 in sections 2.5 and 3 of the Evacuation Relief Tariff Amendment Application.
3 12. As noted in BC Hydro’s response to BCOAPO IR 2.16.2, these variances would
4 be excluded from the domestic revenue variance captured in the Non-Heritage
5 Deferral Account to ensure that these amounts are only deferred once. This
6 means that the deferral to the Storm Restoration Costs Regulatory Account will
7 be completed prior to the calculation of amounts deferred to the Non-Heritage
8 Deferral Account, which would result in these revenue variances being removed
9 prior to the calculation of the domestic revenue variance amount deferred to the
10 Non-Heritage Deferral Account.
11 13. BCOAPO has also questioned the allocation of the revenue impacts to the
12 account of the ratepayer and posits an alternative of sharing the revenue
13 impacts between the ratepayer and shareholder.6 BC Hydro maintains its
14 position that as Evacuation Relief would be integrated into the Electric Tariff, it
15 is appropriate to allocate the revenue impacts to the ratepayer, as set out in
16 BC Hydro’s Final Argument.7
17 Part III Reply to CEC’s Final Argument
18 14. CEC agrees with and supports the majority of the proposed Evacuation Relief.
19 In particular, CEC agrees that it is reasonable to exclude MGS and LGS
20 Customers from Evacuation Relief where those customers have insurance
21 available or are not vulnerable to Evacuation Orders due to taxpayer funding.8
22 Accordingly, CEC has suggested to expand the definition of Evacuee
23 Customers to include MGS and LGS Customers who are not receiving taxpayer
24 funding, are not still operating, or do not carry business interruption insurance
6 BCOAPO Final Argument, page 15. 7 BC Hydro’s Final Argument, page 7 8 CEC Final Argument, page 6.
BC Hydro Evacuation Relief Tariff Amendment Application Page 4 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 (Additional MGS/LGS Customers).9 CEC has recommended that some
2 further feasible criteria be established to determine if an MGS or LGS Customer
3 would qualify for Evacuation Relief.10
4 15. BC Hydro does not support CEC’s recommendations because providing
5 Evacuation Relief to the Additional MGS/LGS Customers would result in a
6 significantly greater administrative and financial cost to BC Hydro and would not
7 be in the interest of ratepayers, as discussed below.
8 16. By requiring additional processes to evaluate and determine eligibility,11 CEC’s
9 proposals would further increase BC Hydro’s administrative costs arising from
10 Evacuation Relief. BC Hydro has estimated that its administrative costs without
11 providing Evacuation Relief to the Additional MGS/LGS Customers would be
12 between $1,500 and $4,500 for a one-day evacuation.12 Implementing
13 additional processes requires additional resources, resulting in an increase of
14 BC Hydro’s administrative costs. As set out in CEC’s proposal, BC Hydro staff
15 would have to reach out to Customers directly to determine whether the
16 Customer was continuing to operate during an Evacuation Order.13 Additionally,
17 while CEC proposes that BC Hydro should be able to ask Customers whether
18 they carry business interruption insurance when opening accounts, BC Hydro
19 cannot assume that the answer will remain static, as businesses may change or
20 cancel their insurance policies as part of their business decisions.
21 17. Contrary to CEC’s argument that BC Hydro has not presented persuasive
22 evidence to exclude the Additional MGS/LGS Customers,14 the evidence
23 submitted by BC Hydro demonstrates that extending Evacuation Relief to
24 include the Additional MGS/LGS Customers would create significant financial
9 CEC Final Argument, page 6. 10 CEC Final Argument, pages 6 to 7. 11 CEC Final Argument, pages 6 to 7. 12 Refer to BC Hydro’s response to BCUC IRs 1.2.2, 1.2.12 and 2.8.5. 13 CEC Final Argument, page 7. 14 CEC Final Argument, page 6.
BC Hydro Evacuation Relief Tariff Amendment Application Page 5 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 costs to BC Hydro and to ratepayers, as set out in BC Hydro’s Final
2 Argument.15 Furthermore, if Demand Charges were also waived for the
3 Additional MGS/LGS Customers, the financial impact would be even more
4 significant.16
5 18. CEC argues that the number of Additional MGS/LGS Customers would be
6 “relatively small” after application of the filtering criteria, but this argument
7 demonstrates that the increased administrative cost would only benefit to a few
8 customers. It is not in the interest of ratepayers for BC Hydro to incur increased
9 administrative costs for little benefit.
10 19. CEC does not dispute that Evacuation Relief provides assistance to vulnerable
11 Customers subject to Evacuation Orders. To that end, BC Hydro proposes to
12 grant Evacuation Relief to residential Customers as well as MGS and LGS
13 Customers where those customers are vulnerable to Evacuation Orders.17 All of
14 the MGS and LGS Customers identified in the proposed section 5.8.4 are
15 Customers where the end users are residential.18 While the account may not be
16 residential, such as for nursing homes or boarding houses, the end users for
17 those selected accounts are residential and are not supported by other means,
18 such as being for profit or being entirely taxpayer funded. The Additional
19 MGS/LGS Customers are not the same in this regard.
20 20. CEC has argued that the proposed Evacuation Relief is discriminatory.19
21 However, the proposed Evacuation Relief is not unduly discriminatory.
22 BC Hydro has proposed to provide relief to eligible MGS and LGS Customers
23 who are vulnerable during Evacuation Periods similar to the vulnerability of
24 residential Customers, based on financial vulnerability, such as arising from a
15 BC Hydro’s Final Argument filed May 26, 2020, page 4. 16 Refer to BC Hydro’s response to BCUC IR 1.1.1.1 and CEC IR 1.2.4. 17 Refer to BC Hydro’s response to BCUC IR 1.1.1.1. 18 Refer to BC Hydro’s response to BCUC IR 2.8.3. 19 CEC’s Final Argument, page 5.
BC Hydro Evacuation Relief Tariff Amendment Application Page 6 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 lack of insurance coverage, inability to operate during the Evacuation Period, or
2 financial funding. CEC acknowledges that BC Hydro’s consideration of those
3 criteria is appropriate.20
4 21. Should the Commission choose to extend Evacuation Relief to the Additional
5 MGS/LGS Customers who do not have taxpayer funding, are not still operating
6 during the Evacuation Period, or who carry business interruption insurance, as
7 proposed by CEC,21 any Additional MGS/LGS Customers should be required to
8 apply for Evacuation Relief. The additional cost of extending Evacuation Relief
9 to the Additional MGS/LGS Customers may be mitigated by requiring that those
10 customers complete an application, which would allow both Customers and
11 BC Hydro to assess whether the Customer is truly vulnerable and should be
12 entitled to Evacuation Relief. BC Hydro is able to prepare an application
13 process that would administer applications on the established criteria. In
14 addition, should the Commission choose to extend the Evacuation Relief to
15 Additional MGS/LGS Customers, the relief should apply to the Energy Charge
16 only and not the Demand Charge in the applicable rate schedules. In doing so
17 the financial risk to all ratepayers will be somewhat mitigated and Customers
18 will be incented to turn off or turn down their equipment upon evacuation.
19 Part IV Conclusion
20 22. BC Hydro respectfully submits that the proposed Evacuation Relief
21 amendments should be granted. After reviewing CEC’s Final Argument,
22 BC Hydro respectfully submits that the extension of Evacuation Relief to the
23 Additional MGS/LGS Customers is not justified as it is not in the interest of
24 ratepayers.
20 CEC’s Final Argument, page 4. 21 CEC’s Final Argument, page 6.
BC Hydro Evacuation Relief Tariff Amendment Application Page 7 Reply Submission British Columbia Hydro and Power Authority June 26, 2020
1 ALL OF WHICH IS RESPECTFULLY SUBMITTED JUNE 30, 2020
2 Per:
3 Andrew MacRae, Solicitor & Counsel, British Columbia Hydro and Power Authority
BC Hydro Evacuation Relief Tariff Amendment Application Page 8