~r\ COl. ~\ ~ ~~ C ~ l:) ~~ I · . ' c -; " ~ ~ , ;;' . ., . J. '/~ ... ROBERT PELLATT COMMISSION SECRETARY /~8··~~~~\ VIA FACSIMILE Mr. John S. Barnes President & General Manager Central Heat Distribution Limited 720 Beatty Street Vancouver, B.C. V6B2Ml Dear Mr. Barnes: Re: Central Heat Distribution Limited 1996 Annual Report to the Commission and the 1997 Financial Forecast The Commission has reviewed Central Heat's 1996 Annual Report to the Commission and the 1997 Financial Forecast. Central Heat continues the use of unfunded debt financing as it expects a period of low interest rates and because savings achieved in interest financing help to offset the requirement for tariff increases. The Commission recognizes that financing the utility solely by short-term debt, in the absence of an interest deferral account, may provide increased returns to the shareholders. reviewed Central Heat's forecasts of 1997 short-term debt costs and considers that the expected return on equity is in a zone of reasonableness that is acceptable to the Commission. The Commission expects that past savings from the use of short-term debt are to be considered before an application to increase customer rates. cms CHDUCorl1996 AnnRptl97 Financial Forecst LETTER No. L-58-97 u • ~ • _ ~" .a r ~ . . . ;; lr..1 "Y ' ~" . -~ ' ~ Z SIXTH FLOOR. 900 HOWE STREET. BOX 250 VANCOUVER, B.C. CANADA V6Z 2N3 " . C .. I . I . I . I . t . ' . . . . C r ;J _ TELEPHONE: (604) 660-4700 BC TOLL FREE: 1-800-663-1385 FACSIMILE: (604) 660-1102 September 11, 1997 The Commission has Yours truly,
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