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.