ORDER NUMBER

F-29-23A

 

IN THE MATTER OF

the Utilities Commission Act, RSBC 1996, Chapter 473

 

and

 

British Columbia Hydro and Power Authority

Fiscal 2023 to Fiscal 2025 Revenue Requirements Application

Participant Assistance/Cost Award Application

 

BEFORE:

D. M. Morton, Panel Chair

A. K. Fung, KC, Commissioner

R. I. Mason, Commissioner

 

on August 9, 2023

 

ORDER

WHEREAS:

 

A.      On August 31, 2021, the British Columbia Hydro and Power Authority (BC Hydro) filed its Fiscal 2023 to Fiscal 2025 Revenue Requirements Application (Application) with the British Columbia Utilities Commission (BCUC) pursuant to sections 44.2, and 58 to 61 of the Utilities Commission Act requesting, among other things, interim and, after certain future determinations in other proceedings, permanent approval of the following:

(i)      Increase in rates by 0.62 percent, effective April 1, 2022, by 0.97 percent, effective April 1, 2023 and by 2.18 percent, effective April 1, 2024; and

(ii)    The fiscal 2023, fiscal 2024, and fiscal 2025 Open Access Transmission Tariff (OATT) rates as set out in Table 9-4 of the Application;

B.      In the Application, BC Hydro also requested to set the Deferral Account Rate Rider (DARR) on an interim and permanent basis at (2.0) percent, effective April 1, 2022 for fiscal (F) 2023; and, on a permanent basis at (1.0) percent, effective April 1, 2023 for F2024 and (0.5) percent, effective April 1, 2024 for F2025;

C.      By Order G-263-21, the BCUC established the regulatory timetable for the review of the Application, which included two rounds of information requests (IRs) and a procedural conference. By Orders G-72-22, G-136-22, G-166-22, G-189-22, G-239-22, and G-284-22, the BCUC subsequently furthered and amended the regulatory timetable to include an additional round of IRs on demand-side management, intervener evidence and a round of related IRs, rebuttal evidence, written submissions on the scope of an oral hearing, an oral hearing, and written final and reply arguments;

D.      During the final arguments phase of the proceeding, on November 18, 2022 and December 21, 2022, respectively, the Lieutenant Governor in Council approved Order in Council (OIC) No. 571 and OIC No. 692. Subsequently, by Orders G-344-22, G-386-22, and G-10-23, the BCUC furthered and amended the regulatory timetable to include submissions regarding the effect of these OICs on the Application, a round of Panel IRs, a streamlined review process (SRP), and final and reply arguments on the SRP topics and the Association of Major Power Customers of British Columbia (AMPC)’s proposal made at the SRP;

E.       By Order G-66-23, the BCUC reopened the evidentiary record to accommodate Panel IRs regarding BC Hydro’s finance charges;

F.       Subsequent to the issuance of Order G-66-23, on March 31, 2023, BC Hydro filed a letter with the BCUC seeking approval, as part of the proceeding to review the Application, to reinstate a regulatory liability in the Trade Income Deferral Account (TIDA);

G.      By Orders G-74-23 and G-90-23, the BCUC furthered the regulatory timetable to include submissions on BC Hydro’s request to reinstate a regulatory liability in the TIDA and to a further round of Panel IRs on BC Hydro’s finance charges, respectively;

H.      On April 21, 2023, by Decision and Order G-91-23 issued concurrently, the BCUC made various determinations on the Application, including approving the requested F2023 to F2025 rates, except the F2025 DARR, as permanent, subject to certain adjustments and any future determinations and directives made by the BCUC in the proceeding regarding BC Hydro’s request to reinstate a regulatory liability in the TIDA and BC Hydro’s finance charges (Initial Decision);

I.         Subsequent to the issuance of the Initial Decision, by Order G-111-23, the BCUC furthered the regulatory timetable to include final and reply arguments on BC Hydro’s request to reinstate a regulatory liability in the TIDA and BC Hydro’s finance charges;

J.        On May 30, 2023, BC Hydro filed a letter with the BCUC seeking clarification on directives in the Initial Decision regarding the Fiscal 2022 Depreciation Study Impact Regulatory Account. On June 6, 2023, the BCUC invited submissions on the Fiscal 2022 Depreciation Study Impact Regulatory Account;

K.       On June 19, 2023, by Decision and Order G-154-23 issued concurrently, the BCUC, among other things, made determinations on BC Hydro’s request to reinstate a regulatory liability in the TIDA, BC Hydro’s finance charges, and the Fiscal 2022 Depreciation Study Impact Regulatory Account;

L.       The following parties registered as interveners in the proceeding:

•         BC Sustainable Energy Association (BCSEA);

•         Movement of United Professionals (MoveUP);

•         FortisBC Energy Inc. and FortisBC Inc. (FortisBC);

•         Clean Energy B.C. (CEBC);

•         Kwadacha Nation and Tsay Keh Dene Nation, together the Zone II Ratepayers Group (Zone II RPG);

•         Capital Power Corporation (Capital Power);

•         Association of Major Power Customers of British Columbia (AMPC);

•         Residential Customer Intervener Association (RCIA);

•         Commercial Energy Consumers Association of British Columbia (CEC);

•         Nuu-chah-nulth Tribal Council (NTC);

•         British Columbia Old Age Pensioners’ Organization et al. (BCOAPO);

•         Zone 1B Ratepayers Group (Z1BRG);

•         Richard McCandless (McCandless);

•         Canadian Manufacturers and Exporters (CM&E); and

•         Edlira Gjoshe (Gjoshe);

M.    By Orders F-20-22, F-21-22, F-26-22, F-7-23, and F-17-23, the BCUC awarded interim PACA funding to the following interveners, respectively, in the listed amounts:

 

N.      The following interveners filed Participant Assistance/Cost Award (PACA) applications with the BCUC with respect to their participation in the proceeding:

 

O.      By letter dated July 13, 2023, BC Hydro provided its comments on the PACA applications. Interveners did not submit reply comments to BC Hydro;

P.       The BCUC has reviewed the PACA applications and the comments made by BC Hydro in accordance with the criteria and rates set out in the PACA Guidelines, attached to BCUC Order G-97-17, and makes the following determinations.

 

NOW THEREFORE pursuant to section 118(1) of the Utilities Commission Act and for the reasons set out in Appendix A to this order, the BCUC orders as follows:

 

1.       Funding is awarded to the following interveners in the listed amounts for their participation in the BC Hydro Fiscal 2023 to Fiscal 2025 Revenue Requirements Application proceeding:

 

2.       BC Hydro is directed to reimburse the above-noted interveners for the awarded amount in a timely manner.

 

DATED at the City of Vancouver, in the Province of British Columbia, this                14^th              day of August 2023.

 

BY ORDER

 

Original signed by:

 

D. M. Morton

Commissioner

 

Attachment

 

British Columbia Hydro and Power Authority

Fiscal 2023 to Fiscal 2025 Revenue Requirements Application

Participant Assistance/Cost Award Application

 

 

 

Table of Contents [if needed]

Page no.

 

1.0         Introduction. 2

1.1          Background. 2

1.2          Interim PACA Funding. 3

1.3          Legislative Framework. 4

2.0         PACA Applications. 4

2.1          RCIA.. 5

2.2          NTC. 5

2.3          Gjoshe. 6

2.4          The CEC. 7

 

 

 

1.0              Introduction

On June 19, 2023, the BCUC issued its final decision in the BC Hydro Fiscal 2023 to F2025 Revenue Requirements Application (Application) proceeding. These reasons for decision address the final PACA awards for the proceeding, pursuant to the BCUC’s PACA Guidelines (PACA Guidelines).[1]

1.1              Background

On August 31, 2021, the British Columbia Hydro and Power Authority (BC Hydro) filed the Application with the British Columbia Utilities Commission (BCUC) pursuant to sections 44.2, and 58 to 61 of the Utilities Commission Act requesting, among other things, interim and, after certain future determinations in other proceedings, permanent approval of general rates, the Open Access Transmission Tariff rates, and the Deferral Account Rate Rider (DARR) for fiscal (F) 2023 to F2025.

 

On September 7, 2021, the BCUC established an initial regulatory timetable for the review of the Application, and several additional regulatory timetables were subsequently established. These regulatory timetables included two rounds of information requests (IRs), a procedural conference, an additional round of IRs on DSM, intervener evidence and a round of related IRs, written submissions on the scope of an oral hearing, an oral hearing held on September 20 to 23, 2022 that included BC Hydro’s rebuttal evidence, and written final and reply arguments.[2]

 

Intervener evidence was filed by the Kwadacha Nation and Tsay Keh Dene Nation, together the Zone II Ratepayers Group (Zone II RPG), the Association of Major Power Customers of British Columbia (AMPC), and the Residential Customer Intervener Association (RCIA).

 

During the final arguments phase of the proceeding, on November 18, 2022, the Lieutenant Governor in Council enacted the Direction to the BCUC Respecting Residential and Commercial Customer Account Credits[3] and the Direction to the BCUC Respecting Cryptocurrency Mining Projects.[4] After consideration of these new Directions, the BCUC reopened the evidentiary record and established an amended regulatory timetable that included one round of Panel IRs, BCUC and Intervener IRs, and an streamlined review process (SRP) to review certain items in the Application that may be impacted by these government directions.

 

Following the SRP, the BCUC established a further amended regulatory timetable that included written intervener final arguments on the topics within the scope of the SRP, arguments on AMPC’s proposal raised at the SRP, AMPC’s reply to interveners regarding its proposal, and BC Hydro’s reply argument.[5] BC Hydro’s final argument on the topics within the scope of the SRP was provided orally at this review process.

 

Following the filing of intervener’s final arguments and BC Hydro’s reply argument on the SRP topics and AMPC’s proposal, the BCUC invited parties’ submissions on an alternative approach to setting the DARR.[6]

 

Subsequently, the Panel reopened the evidentiary record a second time to accommodate two rounds of Panel IRs (i.e. Panel IR no. 2 and no. 3) on the topic of BC Hydro’s finance charges.[7] During this time, BC Hydro filed a request, as part of this proceeding, to reinstate a $320 million regulatory liability in the Trade Income Deferral Account (TIDA).[8] The Panel invited, and received, parties’ submissions on BC Hydro’s request to reinstate the regulatory liability in the TIDA.[9]

 

On April 21, 2023, by Decision and Order G-91-23 (Initial Decision), the Panel approved the requested rates, subject to certain adjustments and any future determinations and directives made by the Panel with respect to BC Hydro’s request to reinstate a regulatory liability in the TIDA and BC Hydro’s finance charges.

 

Subsequent to the filing of responses to Panel IR no. 2 and the issuance of the Initial Decision, BC Hydro filed its responses to Panel IR no. 3 and the Panel invited submissions on:[10]

i)                    BC Hydro’s request to reinstate a regulatory liability in the TIDA in light of the directions made by the Panel in the Initial Decision regarding the recovery mechanism for the TIDA; and

ii)                   BC Hydro’s finance charges.

Subsequent to the filing of submissions on the above items, on May 30, 2023, BC Hydro filed a letter seeking clarification on the directives in the Initial Decision related to the Fiscal 2022 Depreciation Study Impact Regulatory Account. On June 6, 2023, the Panel invited submissions on how the remaining balance in the regulatory account should be addressed.[11]

 

On June 19, 2023, by Decision and Order G-154-23 issued concurrently, the BCUC, among other things, made determinations on BC Hydro’s request to reinstate a regulatory liability in the TIDA, BC Hydro’s finance charges, and the F2022 Depreciation Study Impact Regulatory Account.

 

There were fifteen registered interveners in this proceeding, of which ten filed an application for Participant Assistance/Cost Award (PACA) with respect to their respective participation in the proceeding.

1.2              Interim PACA Funding

By Orders F-20-22, F-21-22, F-26-22, F-7-23, and F-17-23, the BCUC awarded interim PACA funding to the following interveners, respectively, in the listed amounts:

 

1.3              Legislative Framework

Section 118 of the Utilities Commission Act (UCA) states that the BCUC may order a participant in a proceeding before the BCUC to pay all or part of the costs of another participant in the proceeding.[12]

 

Order G-97-17, dated June 15, 2017, outlines the PACA Guidelines. Section 3.0 of the PACA Guidelines relates to participant eligibility for a cost award and Section 4.0 relates to criteria for a cost award.

2.0              PACA Applications

The following participants filed PACA applications with the BCUC with respect to their respective involvement in the proceeding:

 

 

On July 13, 2023, BC Hydro provided its comments regarding the PACA applications and stated, among other things, that in its view all participants are eligible for a cost award and all participants contributed to a better understanding by the BCUC of the issues in the proceeding. BC Hydro did not have any comments on the specific amounts requested by each intervener apart from a comment that there may be a potential mathematical error in AMPC’s PACA application. BC Hydro also noted that the cost awards sought by RCIA and AMPC are much higher than other interveners but acknowledges that this may be due to their in-depth exploration of certain topics in the proceeding and the contribution of intervener evidence.

 

Interveners did not submit comments in reply to BC Hydro. However, on July 13, 2023, AMPC filed a revised PACA application that corrects the mathematical error noted in BC Hydro’s comments and reduces the cost award sought by the GST charges that it can recover through an input tax credit. In addition, on July 28, 2023, AMPC filed a further revised PACA application that reduces its disbursement claimed by $123.72.

 

The Panel has reviewed the PACA applications and BC Hydro’s comments in accordance with the criteria and rates set out in the PACA Guidelines attached to Order G-97-17. The Panel is satisfied that the interveners who have requested a cost award meet the eligibility criteria outlined in the BCUC’s PACA Guidelines for a cost award in this proceeding. The Panel considers that these interveners have actively participated in the proceeding and contributed to a better understanding of the issues raised in the proceeding. The Panel finds that the amounts in the PACA applications for BCSEA, MoveUP, CEBC, Zone II RPG, AMPC, and BCOAPO are  reasonable and awards those participants their respective funding amounts as applied for. The Panel concludes, however, that a partial cost award should be approved for RCIA, NTC, Gjoshe and the CEC as explained in the following sections of these reasons for decision.

 

In the Panel’s view, there may be benefit to having the actual regulatory costs incurred by the utility for the proceeding for comparative purposes when evaluating the PACA applications. As such, it would be useful for the BCUC to require such information be submitted by the utility when assessing cost awards in the future.

2.1              RCIA

RCIA requests a cost award of $360,476.50, which includes disbursements of $93.58 for the purchase of a “Public Utility Depreciation Practices” book from the National Association of Regulatory Utility Commissioners, in addition to professional fees at the specialist/expert witness rate. RCIA states that the professional fees at the specialist/expert witness rate and the disbursement costs are for activities pertaining to the preparation and participation at the oral hearing and regulatory activities pertaining to evidence submission.[13]

 

Section 10.1 of the PACA Guidelines states that disbursements directly related to the participant's participation in the proceeding may be allowed.

Panel Determination

The Panel recognizes that the “Public Utility Depreciation Practices” book is related to RCIA’s participation in the proceeding, as the topic of depreciation was cross-examined during the oral hearing. However, given that RCIA is applying for professional fees, including fees at the specialist/expert witness rate, the Panel finds that it is not reasonable to also award the reimbursement of costs related to the education of the specialist/expert witness on the topic of depreciation. Accordingly, the Panel reduces the funding awarded to RCIA by $93.58 and awards RCIA funding in the amount of $360,382.92.

 

With respect to RCIA’s use of professional services, the Panel commends the RCIA for its use of a case manager in this proceeding. Case managers can enable interveners to participate more effectively while reducing the overall costs in a proceeding. The Panel generally supports the use of case managers where they can reduce the use of other professional services.

2.2              NTC

NTC requests a cost award of $215,836.00, which includes GST of $9,881.00.

 

Section 12.1 of the PACA Guidelines states:

GST and PST costs, which cannot be recovered through an Input Tax Credit will be allowed. Participants seeking an award must confirm in their application for an award that the applied for taxes cannot be recovered by the participant through an Input Tax Credit.

NTC did not confirm in its PACA application that the applied for GST cannot be recovered by the participant through an input tax credit. NTC subsequently clarified that if its cost award includes GST, then it will not claim the input tax credit, but otherwise it will claim the input tax credit.[14]

Panel Determination

In accordance with Section 12.1 of the PACA Guidelines, since NTC can recover the applied for GST through an input tax credit, the Panel finds that it would be reasonable for NTC to do so. Accordingly, the Panel reduces the funding awarded to NTC by the GST amount of $9,881.00 and awards NTC funding in the amount of $205,955.00.

2.3              Gjoshe

Gjoshe requests a cost award of $4,495.68 comprised of 17 funding days at a daily rate of $250 and the following disbursements totalling $33.18 related to her participation as an individual in the proceeding:

•         Meals: $14.16 for breakfast;

•         Vehicle mileage: $13.42 for 22 km travelled at $0.61 per km; and

•         Notebooks: $5.60.

Gjoshe’s participation in the proceeding consisted of submitting IR no. 2 to BC Hydro and participation in the procedural conference held on May 6, 2022. Gjoshe explains in her PACA application that she spent three weeks preparing IR no. 2 in late January and February of 2022, which consisted of reading the Application, BC Hydro’s responses to IR no. 1, BCUC IR no. 2, and preparation of her own IRs. In addition, she spent one day preparing for the procedural conference.[15]

 

On December 22, 2021, the Panel accepted Gjoshe’s late request for intervener status on the grounds that she is “directly or sufficiently affected by the Commission’s decision in this matter” rather than on the ground of “experience, information, or expertise relevant to this matter that would contribute to the Commission's decision making.”[16] On September 11, 2022, Gjoshe withdrew her intervener status in the proceeding.[17]

 

The daily rate of $250 in Gjoshe’s PACA application is based on the maximum allowable forgone earnings per person in the PACA Guidelines.[18]

 

Section 7.11 of the PACA Guidelines states:

Generally the Commission will limit awards for individual participants to foregone (sic) earnings, childcare and disbursements. However, the Commission may award individual participants professional fees if it deems those fees are warranted for the individual to participate effectively.

In Gjoshe’s PACA application, she requests the Panel to consider awarding her professional fees instead of forgone earnings “in the spirit of Commission determination and Order G-72-23.”[19]

 

Order G-72-23 amended the BCUC Rules of Practice and Procedure to include participant cost awards (PCA Rules) effective for proceedings commenced after June 30, 2022. Section 34.04.02 of the PCA Rules states:

A participant that is an individual, subject to Rule 34.05.4, is limited to a cost award for forgone earnings, dependant care costs and disbursements.

Section 34.05.4 of the PCA Rules states:

The BCUC may, on application by a participant who is an individual, award costs for the use of professional services up to the maximum professional rates as set out in Attachment A where it deems that the individual’s position is unique and not otherwise represented by another participant, and such services are reasonably necessary and appropriate for the individual to participate effectively in a proceeding. Such application must be made as soon as practicable, in the event the individual is granted intervener status in a proceeding.

Panel Determination

The Panel denies Gjoshe’s request as an individual intervener for a cost award based on professional fees instead of forgone earnings. The PCA Rules are not applicable to Gjoshe’s PACA application since the proceeding to review the Application commenced prior to June 30, 2022. The Panel finds that it is reasonable to limit Gjoshe’s cost award to forgone earnings and disbursements in accordance with Section 7.11 of the PACA Guidelines. The Panel is not persuaded that professional fees are warranted for Gjoshe to participate effectively in this proceeding.

 

With respect to Gjoshe’s disbursements, the Panel notes that Appendix B to the PACA Guidelines limits reimbursement for vehicle mileage to $0.55 per km. Gjoshe’s PACA application includes mileage of $13.42 at a rate of $0.61 per km for 22 km travelled. Although this amount may not seem material, the Panel considers it appropriate to follow the PACA Guidelines. Accordingly, the Panel reduces the funding awarded to Gjoshe by $1.32[20] and awards Gjoshe funding in the amount of $4,494.36.

2.4              The CEC

The CEC requests a cost award of $199,256.93, which includes consulting fees of $26,512.50 related to tasks performed by Gjoshe. The consulting fees related to Gjoshe’s tasks are comprised of 25.25 funding days at a daily rate of $1,000, plus GST.

 

The CEC explains in its PACA application that due to the workloads over the timeframe of the proceeding, it required additional resources and made efficiencies by contracting Gjoshe “to assist in the later half and split work throughout between Janet Rhodes, David Craig & Edlira Gjoshe.”[21]

Panel Determination

The Panel has identified the following tasks performed by Gjoshe for the CEC that appear to overlap with some of her tasks performed as an individual intervener in this proceeding:[22]

•         “Review Application & Other – (B-2) 1079-pages, (B-2-2) 2694-pages”: 9 hours;

•         “Responses to Intervener IR #1 (3232 pages)”: 3 hours;

•         “Responses to BCUC IR #1 (1390 pages)”: 3 hours;

•         “CEC IR #2 – (25 Question Sets)”: 1 hour; and

•         “BCUC IR #2 Responses B-19 (1049 pages)”: 4 hours

The above tasks totaling 20 hours or 2.5 funding days[23] are tasks that reasonably would have also been performed by Gjoshe as part of her tasks as an individual intervener, and for which she has been compensated (see Section 2.3 above). For example, as an individual intervener Gjoshe also reviewed the Application and responses to IRs in order to prepare IR no. 2 and participate at the procedural conference. The Panel finds that it would not be reasonable to award costs for tasks performed as a consultant that were already performed and compensated for as an individual. Accordingly, the Panel reduces the funding awarded to the CEC by $2,625.00[24] and awards the CEC funding in the amount of $196,631.93.