Fred James Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected]
September 1, 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: British Columbia Utilities Commission (BCUC or Commission) Catalyst Paper Corporation Request to Reduce Rate Schedule 1893 Baselines British Columbia Hydro and Power Authority (BC Hydro)
BC Hydro’s Responses to BCSEA and BCUC Information Request No. 1
BC Hydro writes in compliance with Commission Order No. G-207-20 to provide its responses to Round 1 Information Requests (IR) from BC Sustainable Energy Associaton (BCSEA) and BCUC as follows:
Exhibit C1-3 Responses to Commission IRs (Public Version) Exhibit C1-3-1 Responses to Commission IRs (Confidential Version) Exhibit C1-4 Responses to BCSEA IRs
BC Hydro is filing a number of IR responses confidentially with the Commission. BC Hydro confirms that in each IR, an explanation for the request for confidential treatment is provided in the public version of the response. BC Hydro seeks this confidential treatment pursuant to section 42 of the Administrative Tribunals Act and Part 4 of the Commission’s Rules of Practice and Procedure.
British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3 www.bchydro.com
September 1, 2020 Ms. Marija Tresoglavic Acting Commission Secretary and Manager Regulatory Support British Columbia Utilities Commission BC Hydro’s Responses to BCSEA and BCUC Information Request No. 1 Page 2 of 2
For further information, please contact Anthea Jubb at 604-623-3545 or by email at [email protected].
Yours sincerely,
Fred James Chief Regulatory Officer bf/tl
Enclosure BC Sustainable Energy Association Page 1 Information Request No. 1.1.1 Dated: August 18, 2020 of 1 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
1.0 Topic: Design intent of RS 1893
Reference: Exhibit C1-2-1, p.1
BC Hydro states:
“1. The design intent of RS 1893 is to encourage incremental electricity use above normal historical levels. The purpose of RS 1893 baselines is to separate normal levels of RS 1823 electricity purchases from incremental levels of RS 1893 electricity purchases;
2. Consistent with the design intent of RS 1893, BC Hydro considers that baseline adjustments which enable the customer to purchase energy under RS 1893 that it would not have otherwise consumed under RS 1823 should be admissible;”
1.1.1 Is BC Hydro’s paragraph 2 a generic point, or is it specific to the economic impacts of the COVID-19 pandemic?
RESPONSE:
BC Hydro clarifies that statement in the preamble is not specific to the COVID-19 pandemic. BC Sustainable Energy Association Page 1 Information Request No. 1.1.2 Dated: August 18, 2020 of 1 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
1.0 Topic: Design intent of RS 1893
Reference: Exhibit C1-2-1, p.1
BC Hydro states:
“1. The design intent of RS 1893 is to encourage incremental electricity use above normal historical levels. The purpose of RS 1893 baselines is to separate normal levels of RS 1823 electricity purchases from incremental levels of RS 1893 electricity purchases;
2. Consistent with the design intent of RS 1893, BC Hydro considers that baseline adjustments which enable the customer to purchase energy under RS 1893 that it would not have otherwise consumed under RS 1823 should be admissible;”
1.1.2 Was this point discussed in the development of RS 1893? Was there discussion of the applicability of RS 1893 to downturn situations in which power (a) would not otherwise have been consumed under RS 1823 and (b) would be below normal historical levels?
RESPONSE:
BC Hydro confirms that it consulted with customers and the Association of Major Power Customers of B.C. on the rate design elements and baseline adjustments.
BC Hydro consulted on the limitations of RS 1893 electricity usage for RS 1823 customers. This limitation on RS 1893 electricity usage is equal to the baseline amount of electricity the customer purchases under RS 1823 pursuant to Special Condition 11. Special Condition 8 in RS 1893 allows BC Hydro and the customer to file alternative baselines with the BCUC if the determined baselines are not representative of the Customer’s normal expected RS 1823 or RS 1828 electricity usage. BC Sustainable Energy Association Page 1 Information Request No. 1.2.1 Dated: August 18, 2020 of 1 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
2.0 Topic: RS 1893 Special Condition 11, RS 1823A
Reference: Exhibit C1-2-1, pp.2, 4
BC Hydro states:
“4. For the Catalyst Crofton facility, if RS 1893 baselines are set to reflect shutdown operations, the magnitude of a mill restart in any month is such that Special Condition 11 of RS 1893 will be automatically triggered. This will have the effect of automatically pricing 50 per cent of total electricity use under RS 1893 and 50 per cent of total electricity use under RS 1823 and will make the adjusted RS 1893 baselines obsolete;
5. To address baseline harmonization challenges that arise between RS 1823 and RS 1893 when the principles and criteria of TS 74 are applied to a shutdown plant seeking an opportunity for economic re-start, BC Hydro considers that transfer of the customer site to RS 1823A would be a fair and pragmatic solution;”
BC Hydro also states:
“20. In general, BC Hydro agrees that transfer to RS 1823A would resolve the baseline harmonization issue. However, transfer to RS 1823A is only a partial solution insofar as it will address RS 1823 pricing risk (for BC Hydro, but not necessarily the customer), but will not address RS 1823 energy volume risk including load shifting. In addition, a transfer to RS 1823A would require the customer to remain under this rate until at least 12 Billing Periods of normal operations have been achieved for a CBL to be re-determined;”
1.2.1 In BC Hydro’s paragraph 4, if Special Condition 11 of RS 1893 is triggered, do the adjusted RS 1893 baselines become 50% of total electricity? What does “obsolete” mean here?
RESPONSE:
In this context, the word “obsolete” means that if with the adjusted baselines Special Condition 11 is triggered, then the Monthly Reference Demand and the HLH and LLH Baselines would be adjusted to be equal to 50 per cent of total electricity usage subject to provisions of RS 1893 and therefore the previous baselines would no longer apply. BC Sustainable Energy Association Page 1 Information Request No. 1.2.2 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
2.0 Topic: RS 1893 Special Condition 11, RS 1823A
Reference: Exhibit C1-2-1, pp.2, 4
BC Hydro states:
“4. For the Catalyst Crofton facility, if RS 1893 baselines are set to reflect shutdown operations, the magnitude of a mill restart in any month is such that Special Condition 11 of RS 1893 will be automatically triggered. This will have the effect of automatically pricing 50 per cent of total electricity use under RS 1893 and 50 per cent of total electricity use under RS 1823 and will make the adjusted RS 1893 baselines obsolete;
5. To address baseline harmonization challenges that arise between RS 1823 and RS 1893 when the principles and criteria of TS 74 are applied to a shutdown plant seeking an opportunity for economic re-start, BC Hydro considers that transfer of the customer site to RS 1823A would be a fair and pragmatic solution;”
BC Hydro also states:
“20. In general, BC Hydro agrees that transfer to RS 1823A would resolve the baseline harmonization issue. However, transfer to RS 1823A is only a partial solution insofar as it will address RS 1823 pricing risk (for BC Hydro, but not necessarily the customer), but will not address RS 1823 energy volume risk including load shifting. In addition, a transfer to RS 1823A would require the customer to remain under this rate until at least 12 Billing Periods of normal operations have been achieved for a CBL to be re-determined;”
1.2.2 Please explain paragraph 5 more fully. Would the outcome be that 50% of the energy load is priced under RS 1823A and 50% is priced under RS 1893? Does a transfer of the customer site to RS 1823A require Commission approval?
RESPONSE:
Yes, the outcome would be that 50 per cent of the energy usage is priced under RS 1823A and 50 per cent is priced under RS 1893. Special Condition 11 is designed to mitigate the risk of unintended use of incremental energy by limiting the amount of electricity a customer may purchase under RS 1893. This limitation on RS 1893 energy usage is equal to the baseline amount of electricity the customer purchases under RS 1823. BC Sustainable Energy Association Page 2 Information Request No. 1.2.2 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
Under Special Condition 11, If a customer’s highest kVA Demand in HLH of a Billing Period is greater than the Monthly Reference Demand applicable to that Billing Period multiplied by 2.0, then:
(i) The Monthly Reference Demand for that Billing Period will be automatically adjusted to be equal to 50 per cent of the highest kVA Demand in HLH during that Billing Period; and
(ii) The HLH and LLH Baselines for that Billing Period will be automatically adjusted to be equal to 50 per cent of the total energy volumes taken by the customer in the HLH and LLH of that Billing Period.
Please refer to the table below for an illustration of how Special Condition 11 would be applied:
Customer XYZ March Billing Period Per Special Condition 11 Special Condition 11 Adjusted RS 1893 Total Energy (kWh) 50% of Energy (kWh) Billing Period Hours Baselines kWh/hr Metered HLH Energy 5,447,200 2,723,600 416 6,547 Metered LLH Energy 4,191,700 2,095,850 327 6,409
Current RS 1893 Adjusted RS 1893 Baselines (kWh/hr) Baseline Adjustment Baselines (kWh/hr) New RS 1893 HLH HLH Energy Baseline (kWh/hr) 12,130 (5,583) 6,547 Baseline for March New RS 1893 LLH LLH Energy Baseline (kWh/hr) 14,770 (8,361) 6,409 Baseline for March
RS 1893 Monthly Reference Demand (kV.A) 12,600 HLH Peak Demand 25,820 50% Peak HLH Demand 12,910 New RS 1893 Monthly Reference Demand for March
The request for transfer to RS 1823A is subject to Commission approval in accordance with section 4.6 of Tariff Supplement 74. BC Hydro would typically file for approval of the placement of customers on Energy Charge Part A of RS 1823 at the time we complete our annual CBL filing with the Commission. BC Sustainable Energy Association Page 1 Information Request No. 1.2.3 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
2.0 Topic: RS 1893 Special Condition 11, RS 1823A
Reference: Exhibit C1-2-1, pp.2, 4
BC Hydro states:
“4. For the Catalyst Crofton facility, if RS 1893 baselines are set to reflect shutdown operations, the magnitude of a mill restart in any month is such that Special Condition 11 of RS 1893 will be automatically triggered. This will have the effect of automatically pricing 50 per cent of total electricity use under RS 1893 and 50 per cent of total electricity use under RS 1823 and will make the adjusted RS 1893 baselines obsolete;
5. To address baseline harmonization challenges that arise between RS 1823 and RS 1893 when the principles and criteria of TS 74 are applied to a shutdown plant seeking an opportunity for economic re-start, BC Hydro considers that transfer of the customer site to RS 1823A would be a fair and pragmatic solution;”
BC Hydro also states:
“20. In general, BC Hydro agrees that transfer to RS 1823A would resolve the baseline harmonization issue. However, transfer to RS 1823A is only a partial solution insofar as it will address RS 1823 pricing risk (for BC Hydro, but not necessarily the customer), but will not address RS 1823 energy volume risk including load shifting. In addition, a transfer to RS 1823A would require the customer to remain under this rate until at least 12 Billing Periods of normal operations have been achieved for a CBL to be re-determined;”
1.2.3 Please explain paragraph 20 more fully. What does BC Hydro mean when it says transfer to RS 1823A would “not necessarily” address RS 1823 pricing risk for the customer? What does BC Hydro mean when it says transfer to RS 1823A “will not address RS 1823 energy volume risk including load shifting”?
RESPONSE:
BC Hydro clarifies that the customer’s energy purchases under RS 1823A would be under the prevailing RS 1823 rates which, unlike RS 1893, do not vary with market prices. BC Hydro understands that Catalyst’s intent is to maximize the opportunity for a restart by purchasing Electricity under RS 1893 prices which are typically lower compared to the prevailing RS 1823A prices. The RS 1893, Net Incremental Energy in HLH and LLH is priced using the Intercontinental Exchange BC Sustainable Energy Association Page 2 Information Request No. 1.2.3 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
Day Ahead Power Price Report for Mid-Columbia Peak or Off Peak weighted average index prices, applicable to the hour.
The volume of energy that would have been purchased under RS 1823 would be the same (all things being equal) as under RS 1823A. The transfer to RS 1823A does not change the possibility of load shifting, it only changes the pricing of the electricity purchased and takes away the risk associated with the prospective financial consequence of Energy CBL reset which would not apply for a customer on RS 1823A. BC Sustainable Energy Association Page 1 Information Request No. 1.3.1 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
3.0 Topic: RS 1828, Transmission Service – Biomass Energy Program
Reference: Exhibit C1-2-1, BC Hydro Intervener Evidence, pp.2, 5; Exhibit B-3, Catalyst Response to BCUC IR 3.2, pdf p.4
After stating that Special Condition 11 in RS 1893 creates financial risk (for Catalyst regarding a restart of the Crofton TMP paper operations), Catalyst states:
“Fortunately, the design of RS 1828 provides a potential solution to these challenges:
Firstly, there are no baselines in RS 1828 and thus no need for reconciliation with the RS 1893 baselines. Secondly, the RS 1828 rate is based on the historic consumption of Tier 1 and Tier 2 energy under RS 1823 and therefore preserves the impact of action, or inaction, that a customer has made to pursue electricity conservation and efficiency of use. Finally, Special Condition 11 in RS 1893 does not apply to customers on RS 1828 and thus alleviates the future cost risk associated with a partial restart, in our case at least, of TMP paper production. The RS 1828 design may provide a framework for encouraging incremental load during these uncertain times while adhering to the intent of TS 74 to not discourage economic growth.” [Exhibit B-3, Catalyst Response to BCUC IR 3.2, pdf p.4]
BC Hydro states:
“6. BC Hydro considers the Catalyst proposal to use the RS 1828 Transmission Service - Biomass Energy Program design and criteria to encourage incremental use from shutdown plant to be out of scope for the current proceeding. This rate schedule was approved by the BCUC pursuant to government direction;”
BC Hydro also states:
“23. To avoid the application of Special Condition 11, Catalyst has proposed a treatment equivalent to it being served under Rate Schedule 1828 (Transmission Service - Biomass Energy Program). Catalyst opines that this rate design may ‘… provide a framework for encouraging incremental load during these uncertain times while adhering to the intent of TS 74 to not discourage economic growth.’ It would also have the result of fixing the price of Catalyst’s baseline energy purchases at the RS 1823 Tier 1 energy rate. BC Hydro considers this submission to be out of scope for the current proceeding.” [italics in the original] BC Sustainable Energy Association Page 2 Information Request No. 1.3.1 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
1.3.1 In addition to RS 1828 having been approved by the BCUC pursuant to a government direction, is it BC Hydro’s view that transfer to RS 1828 would be inappropriate because this would have the result of fixing the price of Catalyst’s baseline energy purchases at the RS 1823 Tier 1 energy rate? If so, for greater certainty please explain why in BC Hydro’s view this would be inappropriate. If not, please explain.
RESPONSE:
Please refer to BC Hydro’s response to BCUC IR 1.3.1. BC Sustainable Energy Association Page 1 Information Request No. 1.4.1 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
4.0 Topic: Load attraction and load retention rates
Reference: Exhibit C1-2-1, p.2; “ENGAGEMENT SUMMARY REPORT, TRANSMISSION SERVICE RATES, COMMENTS AND FEEDBACK, From October 2018 Transmission Service Rate Design Workshops,” Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460
BC Hydro states:
“7. BC Hydro is supportive of outcomes that encourage incremental use of electricity by Catalyst and that can be applied fairly and equally to all eligible transmission service customers in similar circumstances.” [Exhibit C1-2-1, p.2]
In the TSMRP Application, BC Hydro stated:
“BC Hydro has approximately 150 industrial load customers served electricity at transmission voltage. The transmission customer class is presently dominated by resource-dependent industry such as forestry, mining, electrochemical and oil/gas with large electrical loads. These loads are dynamic. BC Hydro seeks to retain and diversify its industrial customer base by providing electricity service to existing and new transmission customers at competitive rates that reflect its cost of service.
In October 2018, BC Hydro engaged with customers, industry and key stakeholders on two existing and three prospective transmission service rate designs. These five rate designs are listed below:
”[Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460]
BCSEA notes that on November 19, 2018 BC Hydro held a Transmission Service Rate Design Workshop for stakeholders. Agenda Item 3 was “Load Attraction Rate and Load Retention Rates.”
1.4.1 In BC Hydro’s view, is the current proceeding the appropriate venue for identifying an outcome that encourages incremental use BC Sustainable Energy Association Page 2 Information Request No. 1.4.1 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
of electricity by Catalyst and that can be applied fairly and equally to all eligible transmission service customers in similar circumstances? If so, why? If not, does BC Hydro have a suggested process?
RESPONSE:
The current proceeding only addresses whether Catalyst’s request to reduce its Rate Schedule (RS) 1893 Baselines should be approved. In that context, BC Hydro is supportive of outcomes that encourage incremental use of electricity and that can be applied fairly and equally to all eligible transmission service customers in similar circumstances, as long as those outcomes are consistent with the principles and criteria set out in Electric Tariff Supplement No. 74 (TS 74) as required by Special Condition 9 of RS 1893.
BC Hydro notes that RS 1893 has undergone extensive review through BC Hydro’s Transmission Service Market Reference-Priced Rates Application filed with the BCUC on October 31, 2019, and in our view that is the appropriate proceeding for assessing the provisions of RS 1893. BC Sustainable Energy Association Page 1 Information Request No. 1.4.2 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
4.0 Topic: Load attraction and load retention rates
Reference: Exhibit C1-2-1, p.2; “ENGAGEMENT SUMMARY REPORT, TRANSMISSION SERVICE RATES, COMMENTS AND FEEDBACK, From October 2018 Transmission Service Rate Design Workshops,” Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460
BC Hydro states:
“7. BC Hydro is supportive of outcomes that encourage incremental use of electricity by Catalyst and that can be applied fairly and equally to all eligible transmission service customers in similar circumstances.” [Exhibit C1-2-1, p.2]
In the TSMRP Application, BC Hydro stated:
“BC Hydro has approximately 150 industrial load customers served electricity at transmission voltage. The transmission customer class is presently dominated by resource-dependent industry such as forestry, mining, electrochemical and oil/gas with large electrical loads. These loads are dynamic. BC Hydro seeks to retain and diversify its industrial customer base by providing electricity service to existing and new transmission customers at competitive rates that reflect its cost of service.
In October 2018, BC Hydro engaged with customers, industry and key stakeholders on two existing and three prospective transmission service rate designs. These five rate designs are listed below:
”[Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460]
BCSEA notes that on November 19, 2018 BC Hydro held a Transmission Service Rate Design Workshop for stakeholders. Agenda Item 3 was “Load Attraction Rate and Load Retention Rates.”
1.4.2 What is the status of BC Hydro’s consideration of a load retention rate for transmission service customers? BC Sustainable Energy Association Page 2 Information Request No. 1.4.2 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
RESPONSE:
While BC Hydro has explored the concept of a load retention rate for transmission service customers, further work would be required to advance such a rate concept. Over the near term, BC Hydro has no immediate plans for developing or filing a load retention rate application with the BCUC. BC Sustainable Energy Association Page 1 Information Request No. 1.4.3 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
4.0 Topic: Load attraction and load retention rates
Reference: Exhibit C1-2-1, p.2; “ENGAGEMENT SUMMARY REPORT, TRANSMISSION SERVICE RATES, COMMENTS AND FEEDBACK, From October 2018 Transmission Service Rate Design Workshops,” Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460
BC Hydro states:
“7. BC Hydro is supportive of outcomes that encourage incremental use of electricity by Catalyst and that can be applied fairly and equally to all eligible transmission service customers in similar circumstances.” [Exhibit C1-2-1, p.2]
In the TSMRP Application, BC Hydro stated:
“BC Hydro has approximately 150 industrial load customers served electricity at transmission voltage. The transmission customer class is presently dominated by resource-dependent industry such as forestry, mining, electrochemical and oil/gas with large electrical loads. These loads are dynamic. BC Hydro seeks to retain and diversify its industrial customer base by providing electricity service to existing and new transmission customers at competitive rates that reflect its cost of service.
In October 2018, BC Hydro engaged with customers, industry and key stakeholders on two existing and three prospective transmission service rate designs. These five rate designs are listed below:
”[Appendix G, Exhibit B-1, BC Hydro Transmission Service Market Reference Priced Rates Application, pdf p. 460]
BCSEA notes that on November 19, 2018 BC Hydro held a Transmission Service Rate Design Workshop for stakeholders. Agenda Item 3 was “Load Attraction Rate and Load Retention Rates.”
1.4.3 What are BC Hydro’s views regarding whether RS 1893 is a “load retention” rate in addition to being a “load attraction” rate? Does BC Sustainable Energy Association Page 2 Information Request No. 1.4.3 Dated: August 18, 2020 of 2 British Columbia Hydro & Power Authority Response issued September 1, 2020 British Columbia Hydro & Power Authority Exhibit: Catalyst Paper Corporation – Request to Reduce Rate C1-4 Schedule 1893 Baselines
BC Hydro consider the distinction between a load attraction rate and a load retention rate to be meaningful, either generally or in the context of the economic impact of the COVID-19 pandemic?
RESPONSE:
BC Hydro does not view RS 1893 as a load retention or load attraction rate. Rather, RS 1893 is expected to:
• Provide opportunities for transmission service customers to operate their idle and/or flexible production capacity that in the absence of the Incremental Energy Rate would be underutilized; and
• Encourage incremental domestic energy use, which provides economic benefits to all BC Hydro ratepayers.
As described in the preamble, load attraction and load retention rates are typically offered as discounted firm service, applicable to the entire plant load. In contrast, RS 1893 is non-firm service applicable only to incremental energy use above baseline levels.
BC Hydro’s understanding is that load attraction rates may be used to attract new customers to a utility service territory, whereas load retention rates may be used to discourage existing customers from leaving the utility’s service territory. The economics and pricing of load attraction and retention rates may differ based on the characteristics of the load and available electricity supply.