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DELIVERED by HAND July 7, 2017 Board of Commissioners of Public

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DELIVERED by HAND July 7, 2017 Board of Commissioners of Public DELIVERED BY HAND July 7, 2017 Board of Commissioners of Public Utilities P.O. Box 21040 120 Torbay Road St. John's, NL A1A 5B2 Attention: G. Cheryl Blundon Director of Corporate Services and Board Secretary Ladies & Gentlemen: Re: Newfoundland Power’s 2018 Capital Budget Application A. 2018 Capital Budget Application Enclosed are the original and 10 copies of Newfoundland Power Inc.’s (the “Company”) 2018 Capital Budget Application and supporting materials (the “Filing”). The Filing outlines a proposed 2018 Capital Budget totaling $83,876,000. Included in that total are 2018 capital expenditures of $1,431,000 previously approved in Order No. P.U. 39 (2016) (the “2017 Capital Order”). Those previously approved expenditures relate to multi-year projects proposed in the 2017 Capital Budget Application. The Filing also outlines multi-year projects commencing in 2018 that include proposed 2019 capital expenditures totaling $17,314,000, proposed 2020 capital expenditures totaling $3,845,000, and proposed 2021 capital expenditures totaling $3,750,000. In addition, the Filing seeks approval of a 2016 rate base in the amount of $1,061,044,000. B. Compliance Matters B.1 Board Orders In the 2017 Capital Order, the Board required a progress report on 2017 capital expenditures to be provided with the Filing. In Order No. P.U. 35 (2003) (the “2004 Capital Order”), the Board required a 5-year capital plan to be provided with the Filing. In Order No. P.U. 19 (2003) (the “2003 Rate Order”), the Board required that evidence relating to deferred charges and a reconciliation of average rate base to invested capital be filed with capital budget applications. Newfoundland Power Inc. 55 Kenmount Road • P.O. Box 8910 • St. John’s, NL A1B 3P6 PHONE (709) 737-5609 • FAX (709) 737-2974 • [email protected] Board of Commissioners of Public Utilities July 7, 2017 Page 2 of 3 These requirements are specifically addressed in the Filing in the following: 1. 2017 Capital Expenditure Status Report: this meets the requirements of the 2017 Capital Order; 2. 2018 Capital Plan: this meets the requirements of the 2004 Capital Order; and 3. Rate Base: Additions, Deductions & Allowances: this meets the requirements of the 2003 Rate Order. B.2 The Guidelines In the October 2007 Capital Budget Application Guidelines (the “Guidelines”), the Board provided certain directions on how to categorize capital expenditures. Although compliance with the Guidelines necessarily requires the exercise of a degree of judgment, the Filing, in the Company’s view, complies with the Guidelines while remaining reasonably consistent and comparable with past filings. Section 2 of the 2018 Capital Plan provides a breakdown of the overall 2018 Capital Budget by definition, classification, and materiality segmentation as described in the Guidelines. Pages i through vii of Schedule B to the formal application provide details of these categorizations by project. C. Filing Details and Circulation The Filing will be posted on the Company’s website (newfoundlandpower.com) in the next few days. Copies of the Filing will be available for review by interested parties at the Company’s offices throughout its service territory. The enclosed material has been provided in binders with appropriate tabbing. For convenience, additional materials such as Responses to Requests for Information will be provided on three- hole punched paper. A PDF file of the Filing will be forwarded to the Board in due course. A copy of the Filing has been forwarded directly to Mr. Geoffrey Young, Senior Legal Counsel of Newfoundland and Labrador Hydro and Mr. Dennis Browne, the Consumer Advocate. Newfoundland Power Inc. 55 Kenmount Road • P.O. Box 8910 • St. John’s, NL A1B 3P6 PHONE (709) 737-5609 • FAX (709) 737-2974 • [email protected] Board of Commissioners of Public Utilities July 7, 2017 Page 3 of 3 D. Concluding We trust the foregoing and enclosed are found to be in order. If you have any questions on the Filing, please contact us at your convenience. Yours very truly, ~;J~ Senior Counsel Enclosures C. Tracey Pennell Dennis Browne, QC Newfoundland and Labrador Hydro Browne Fitzgerald Morgan & A vis Newfoundland Power Inc. 55 Kenmount Road P.O. Box 8910 St. John's, NL AlB 3P6 PHONE (709) 737-5609 FAX (709) 737-2974 [email protected] Newfoundland Power Inc. 2018 Capital Budget Application Filing Contents Application Application Schedule A 2018 Capital Budget Summary Schedule B 2018 Capital Projects Summary Schedule C Multi-Year Projects Schedule D Computation of Average Rate Base 2018 Capital Plan 2017 Capital Expenditure Status Report Supporting Materials Generation 1.1 2018 Facility Rehabilitation 1.2 Purchase Mobile Generation Substations 2.1 2018 Substation Refurbishment and Modernization Transmission 3.1 2018 Transmission Line Rebuild Distribution 4.1 Distribution Reliability Initiative 4.2 Feeder Additions for Load Growth 4.3 CLV-01 Distribution Feeder Refurbishment Information Systems 5.1 2018 Application Enhancements 5.2 2018 System Upgrades 5.3 2018 Shared Server Infrastructure 5.4 Human Resource Management System Replacement 5.5 Outage Management System Replacement & Enhancement Deferred Charges 6.1 Rate Base: Additions, Deductions & Allowances IN THE MATTER OF the Public Utilities Act, (the "Act"); and IN THE MATTER OF capital expenditures and rate base of Newfoundland Power Inc.; and IN THE MATTER OF an application by Newfoundland Power Inc. for an order pursuant to Sections 41 and 78 of the Act: (a) approving a 2018 Capital Budget of $83,876,000; (b) approving certain capital expenditures related to multi-year projects commencing in 2018; and (c) fixing and determining a 2016 rate base of $1,061,044,000 2018 Capital Budget Application IN THE MATTER OF the Public Utilities Act, (the "Act"); and IN THE MATTER OF capital expenditures and rate base of Newfoundland Power Inc.; and IN THE MATTER OF an application by Newfoundland Power Inc. for an order pursuant to Sections 41 and 78 of the Act: (a) approving a 2018 Capital Budget of $83,876,000; (b) approving certain capital expenditures related to multi-year projects commencing in 2018; and (c) fixing and determining a 2016 rate base of $1,061,044,000 TO: The Board of Commissioners of Public Utilities (the "Board") THE APPLICATION OF Newfoundland Power Inc. (“Newfoundland Power”) SAYS THAT: 1. Newfoundland Power is a corporation duly organized and existing under the laws of the Province of Newfoundland and Labrador, is a public utility within the meaning of the Act, and is subject to the provisions of the Electrical Power Control Act, 1994. 2. Schedule A to this Application is a summary of Newfoundland Power’s 2018 Capital Budget in the amount of $83,876,000, which includes forecast 2018 capital expenditures previously approved in Order No. P.U. 39 (2016) and also includes an estimated amount of $2,500,000 in contributions in aid of construction that the Applicant intends to demand from its customers in 2018. All contributions to be recovered from customers shall be calculated in a manner approved by the Board. 3. Schedule B to this Application provides detailed descriptions of the projects for which the proposed capital expenditures included in Newfoundland Power’s 2018 Capital Budget are required. 4. Schedule C to this Application is a listing of multi-year projects including: (a) ongoing projects for which capital expenditures were approved in Order No. P.U. 39 (2016); and (b) projects which will commence as part of the 2018 Capital Budget but will not be completed in 2018. 5. The proposed expenditures as set out in Schedules A, B and C to this Application are necessary for Newfoundland Power to continue to provide service and facilities which 2 reasonably safe and adequate and are just and reasonable as required pursuant to Section 3 7 of the Act. 6. Schedule D to this Application shows Newfoundland Power's actual average rate base for 2016 of$1,061,044,000. 7. Communication with respect to this Application should be forwarded to the attention of Liam P. O'Brien and Gerard M. Hayes, Counsel to Newfoundland Power. 8. Newfoundland Power requests that the Board make an Order: (a) pursuant to Section 41 of the Act, approving Newfoundland Power's 2018 Capital Budget in the amount of $83,876,000 as set out in Schedules A and B to the Application; (b) pursuant to Section 41 of the Act, approving Newfoundland Power's purchase and construction in 2019 of improvements and additions to its property in the amount of $17,314,000, as set out in Schedule C to the Application; (c) pursuant to Section 41 of the Act, approving Newfoundland Power's purchase and construction in 2020 of improvements and additions to its property in the amount of$3,845,000, as set out in Schedule C to the Application; (d) pursuant to Section 41 of the Act, approving Newfoundland Power's purchase and construction in 2021 of improvements and additions to its property in the amount of $3,750,000, as set out in Schedule C to the Application; and (e) pursuant to Section 78 of the Act, fixing and determining Newfoundland Power's average rate base for 2016 in the amount of $1,061,044,000 as set out in Schedule D to the Application. DATED at St. John's, Newfoundland and Labrador, this 7th day of July, 2017. l.'a-t-..1'.l DLAND POWER INC. ---L~iam P. O~~ M. Hayes Counsel to Newfoundland Power Inc. P.O. Box 8910 55 Kenmount Road St. John's, NL AlB 3P6 Telephone: (709) 73 7-5609 Telecopier: (709) 737-2974 IN THE MATTER OF the Public Utilities Act, (the "Act"); and IN THE MATTER OF capital expenditures and rate base of Newfoundland Power Inc.; and IN THE MATTER OF an application by Newfoundland Power Inc.
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