c1-5€¦ · c1-5 . 1.0 reference: page 1, lines 11-14 “the specific amendments proposed are...

Fred James Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected] September 10, 2018 Mr. Patrick Wruck Commission Secretary and Manager Regulatory Support British Columbia Utilities Commission Suite 410, 900 Howe Street Vancouver, BC V6Z 2N3 Dear Mr. Wruck: RE: Project No. 1598939

British Columbia Utilities Commission (BCUC or Commission) British Columbia Hydro and Power Authority (BC Hydro) FortisBC 2017 Cost of Service Analysis and Rate Design Application (the Application) Response to the British Columbia Utilities commission (BCUC or the Commission) and Intervenors Information Request No. 1

BC Hydro writes in compliance with Commission Order No. G-101-18 to provide its responses to Round 1 information requests as follows:

Exhibit C1-4 Responses to Commission IRs Exhibit C1-5 Responses to Interveners IRs

For further information, please contact Anthea Jubb at (604) 623-3545.

Yours sincerely,

(for) Fred James

Chief Regulatory Officer pm/tl Enclosure

British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

www.bchydro.com

C1-5

mailto:[email protected]

talu

Highlight

AMDUNCAN

FBC COSA

British Columbia Old Age Pensioners' Organization Information Request No. 1.1.1 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 1

FortisBC 2017 Cost of Service Analysis and Rate Design Application

Exhibit: C1-5

1.0 Reference: Exhibit C1-3, page 5 (lines 6-10)

1.1.1 For retail customers in FortisBC’s service area who seek to import power from the U.S., is their only access to such power via BCH’s system?

RESPONSE:

BC Hydro operates the transmission lines that constitute the US-BC intertie, and in that sense it is true that a retail access customer in FortisBC’s service territory would have to import power “via BC Hydro’s system.”

BC Hydro owns all the elements of the US-BC intertie on the B.C. side of the border except for Line 71, which is owned by Teck. Teck does not provide transmission service on Line 71 on a regulated basis (no obligation to serve, no tariffs, and so on) but may lawfully provide a transmission (import) service on commercial terms if it was inclined to do so. To the extent Teck was willing and able to enter into such arrangements, a retail access customer in FortisBC’s service territory could potentially import power through a system other than BC Hydro’s. BC Hydro has no insight into the feasibility of such arrangements.

Finally, BC Hydro both owns and operates all the elements of the Alberta-BC intertie on the B.C. side of that border, and so any imports into FortisBC’s service territory from the U.S. via Montana and Alberta would be “via BC Hydro’s system”.

British Columbia Old Age Pensioners' Organization Information Request No. 1.1.2 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 1


Exhibit: C1-5

1.0 Reference: Exhibit C1-3, page 5 (lines 6-10)

1.1.1 For retail customers in FortisBC’s service area who seek to import power from the U.S., is their only access to such power via BCH’s system?

1.1.2 If not, under what circumstances would such imports require the use of BCH’s transmission system?

RESPONSE:

Please refer to BC Hydro’s response to BOAPO IR 1.1.1.

Commercial Energy Consumers Association of British Columbia Information Request No. 1.1.1 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 2


Exhibit: C1-5

1.0 Reference Exhibit B-1, page 92 and C1-3 pages 1 and 2

1.1.1 FBC seeks updates to language in this application which, based on the BC Hydro evidence, the CEC interprets could have potential impacts for BC Hydro ratepayers or others. Please clarify whether or not this is the case in BC Hydro’s view and provide quantification of any impact.


Page 2 of 2


Exhibit: C1-5

RESPONSE:

For the updates proposed by FortisBC in this application, there is no potential impact to BC Hydro ratepayers.


Page 1 of 1


Exhibit: C1-5


1.1.2 Please specifically identify all the harmonization issues with which BC Hydro has differing views from FBC

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.1.3.


Page 1 of 1


Exhibit: C1-5


1.1.3 Please briefly describe how BC Hydro’s views diverge from FBCs on each issue.

RESPONSE:



Page 1 of 1


Exhibit: C1-5

2.0 Reference Exhibit B-1, page 92 and Exhibit C1-3, page 1 and page 5

1.2.1 Please explain why BC Hydro is supportive of FBC’s specific tariff amendments.

RESPONSE:



Page 1 of 1


Exhibit: C1-5


1.2.2 Please explain why BC Hydro is not seeking to end rate harmonization per se.

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.1.3 which discusses issues that might be addressed in a broader review of rate harmonization. These issues are complex, interrelated and will require significant resources to fully consider. Moreover the response to BCUC IR 1.1.3 may not present an exhaustive list. Pending such consideration, BC Hydro has no position on the potential termination of rate harmonization.


Page 1 of 1


Exhibit: C1-5


1.2.3 Why does BC Hydro not provide its submissions on the appropriate future processes at this time? Please explain.

RESPONSE:

The regulatory schedule allows only for evidence related to the Application at this time. In accordance with that schedule, BC Hydro will make any submissions with respect to possible future processes by September 17, 2018.


Page 1 of 1


Exhibit: C1-5


1.2.4 Please identify the types of processes that BC Hydro would expect to require and when these might be expected to occur.

RESPONSE:

Please refer to BC Hydro’s response to CEC IR 1.2.3.


Page 1 of 1


Exhibit: C1-5


1.2.5 Does BC Hydro anticipate Commission and ratepayer involvement in those ‘future processes’?

RESPONSE:

Yes.

Commercial Energy Consumers Association of British Columbia Information Request No. 1.2.5.1 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 1


Exhibit: C1-5


1.2.5 Does BC Hydro anticipate Commission and ratepayer involvement in those ‘future processes’?

1.2.5.1 If no, please explain why not.

RESPONSE:

Please refer to BC Hydro’s response to CEC IR 1.2.5.

FortisBC Information Request No. 1.1.1 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 1


Exhibit: C1-5

1.0 Reference: Page 1, lines 11-14

“The specific amendments proposed are described in section 7.2.3 of the FortisBC RDA and, as noted in the application BC Hydro provides a similar clarification for its customers through its Open Access Transmission Tariff - Business Practice, Posting of Transmission Offerings.”

1.1.1 In the hypothetical case where a self-generating customer of BC Hydro, or an IPP located within the BC Hydro service area, were to deliver power to FBC, and FBC was purchasing the power for resale to its customers, would BC Hydro charge the self-generating customer or IPP for wheeling services per its OATT?

RESPONSE:

Yes. Please refer to BC Hydro’s response to BCUC IR 1.2.1.

If the generator is within BC Hydro’s service area and energy is wheeled to a POI between FortisBC and BC Hydro, the generator is not exposed to the application of multiple transmission tariffs in B.C. and, thus, it is not an issue of rate harmonization. Similarly, if FBC (or its agent) is using the BC Hydro transmission system for the transmission of electricity from the generator to the FortisBC system, FortisBC would be subject to the applicable BC Hydro OATT charges. Please refer to BCUC Order No. G-34-05.


Page 1 of 1


Exhibit: C1-5

1.0 Reference: Page 1, lines 11-14

“The specific amendments proposed are described in section 7.2.3 of the FortisBC RDA and, as noted in the application BC Hydro provides a similar clarification for its customers through its Open Access Transmission Tariff - Business Practice, Posting of Transmission Offerings.”

1.1.2 Please confirm that IPPs in FortisBC’s service area that are exporting power to BC Hydro do not reserve Point-To-Point Transmission Service (PTP) on BC Hydro’s system and do not pay PTP charges to BC Hydro.

RESPONSE:

IPPs in the FortisBC service territory who sell energy to BC Hydro have an obligation to have such energy delivered to a point of interconnection between the FortisBC system and BC Hydro system. The IPP does not reserve PTP service on the BC Hydro system nor do such IPPs pay any OATT charges to BC Hydro because title to the energy is transferred to BC Hydro at the POI and, at that location, is designated as a network resource under the OATT.


Page 1 of 1


Exhibit: C1-5

2.0 Reference: Page 2, line 9-13

“The application was for amendments to their respective wholesale transmission tariffs that sought to avoid the "pancaking" of rates for customers seeking to serve their loads from a third-party and where the transmission systems of both utilities would be required to deliver the power to the customer.”

1.2.1 Does BC Hydro agree that the 1998 joint application by BC Hydro and FortisBC (then West Kootenay Power) did not address the situation where an IPP or self-generating customer used the transmission tariffs of either utility for the purpose of selling self-generation output to another utility?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.1.1 and BCUC IR 1.2.1.


Page 1 of 1


Exhibit: C1-5

3.0 Reference: Page 4, line 22

“The review contemplated by the Commission was premised, in large part, on evaluating how much revenue loss the utilities incurred.”

1.3.1 Please provide an example scenario(s) in which a revenue loss to either FBC or BC Hydro may occur due to the wheeling of self-generated power by an IPP or load customer?

RESPONSE:

As discussed in BC Hydro’s response to BCUC IR 1.2.1, to the extent that third-parties use BC Hydro’s unbundled OATT PTP services and ancillary services, this will reduce BC Hydro NITS charges which are ultimately borne by BC Hydro’s domestic ratepayers. In a situation where the application of rate harmonization applies in the BC Hydro service area, and the PTP charge to a customer is zero instead of the applicable PTP charge, then there is no corresponding decrease to the NITS charge and therefore no benefit to BC Hydro’s domestic ratepayers. Please refer to BC Hydro’s Scenario B-2 and C-4 as provided in Attachment 1 to BC Hydro’s response to BCUC IR 1.2.1.


Page 1 of 1


Exhibit: C1-5

4.0 Reference: Page 5, line 21

“BC Hydro does not seek an end to rate harmonization per se, nor does it object to FortisBC's specific tariff amendment proposal.”

1.4.1 In addition to simply not objecting to FBC's specific tariff amendment proposal, does BC Hydro agree that the revision correctly reflects the intent of the original 1998 Application?

RESPONSE:

Yes. Please refer to the objective of rate harmonization as discussed in Recital A of Commission Order No. G-12-99 and BC Hydro’s response to BCUC IR 1.1.1.

Industrial Customers Group Information Request No. 1.1.1 Dated: August 20, 2018 British Columbia Hydro & Power Authority Response issued September 10, 2018

Page 1 of 1


Exhibit: C1-5

1.0 Reference: Exhibit C1-3, Evidence of BC Hydro, page 4, lines 12-15

“The result of the foregoing is that there is no retail access in BC Hydro’s service territory and BC Hydro retail load customers cannot use the BC Hydro OATT for retail access. The removal of retail access in BC Hydro’s service territory did not impact potential FortisBC retail access customers.”

1.1.1 Would an electric utility embedded within BC Hydro’s service territory (such as the City of New Westminster’s electric utility) be considered an eligible customer under the OATT?

RESPONSE:

Yes. A wholesale customer, such as the City of New Westminster, is an eligible customer under BC Hydro’s OATT.


Page 1 of 1


Exhibit: C1-5


“The result of the foregoing is that there is no retail access in BC Hydro’s service territory and BC Hydro retail load customers cannot use the BC Hydro OATT for retail access. The removal of retail access in BC Hydro’s service territory did not impact potential FortisBC retail access customers.”

1.1.2 Under the existing rate harmonization provisions, would FBC provide PTP wheels at no charge to an electric utility embedded within BC Hydro’s service territory?

RESPONSE:

If a generator within the FortisBC service area is selling electricity to a wholesale customer (e.g., an electric utility) in the BC Hydro service area, and the wheeling tariffs of both BC Hydro and FortisBC were being used, a BC Hydro OATT PTP charge would apply to the transmission reservation on the BC Hydro system and in accordance with the FortisBC tariff, FortisBC would not charge for its PTP service. Please refer to scenario A-2 in BC Hydro’s response to BCUC IR 1.2.1.


Page 1 of 2


Exhibit: C1-5


“The specific amendments proposed are described in Section 7.2.3 of the FortisBC RDA and, as noted in the application, BC Hydro provides a similar clarification for its customers through its Open Access Transmission Tariff-Business Practice, Posting of Transmission Offerings.”

1.2.1 Did BC Hydro seek Commission approval for the modifications to its Open Access Transmission Tariff – Business Practice, Posting of Transmission Offerings which are similar to the amendments sought in the current application?

RESPONSE:

Whether a business practice is filed with the Commission for approval is generally a matter for the utility to decide at first instance, but that decision may be reviewed by the Commission.

The Commission discussed the distinction between the tariff and business practices in its decision dated June 20, 2005, regarding British Columbia Transmission Corporation’s application for an OATT.0F

1 The Commission held, in part:1F

2

The Commission Panel acknowledges the dilemma surrounding the distinction between tariff and business practices. The tariff has to be open, transparent and sufficiently specific yet flexible at the same time. The utility should endeavour to put as much specificity in the tariff as practicable, without being so prescriptive or complex that the tariff becomes incomprehensible or otherwise unworkable. While a very rigid tariff would ensure consistency in treatment among customers, the utility needs to have authority and latitude to make decisions regarding implementation of the tariff and the appropriate business practices to do so. Furthermore, tariff setting and business practices development should be viewed as an ongoing process, especially in an environment where the industry and, therefore, the tariff is evolving.

The Commission Panel reaffirms that the tariff must be approved by the regulator while the business practices need not be. The Commission Panel recommends that, if in doubt, the utility should include the provision in the tariff. Business

1 Starting at page 91. 2 Pages 93 and 94.


Page 2 of 2


Exhibit: C1-5

practices then provide further clarity as to how the tariff rules will be implemented.

…

The Commission Panel accepts BCTC’s argument that its existing procedures for developing, adopting and disputing business practices under the proposed OATT are sufficient and satisfy customers’ needs…

Accordingly, BC Hydro’s business practices, including its OATT business practices and the business practice referred to in this IR, have not been filed with the Commission for approval or are otherwise subject to a Commission order. BC Hydro notes that it consulted with OATT customers and interested parties prior to changing its Posting of Transmission Service Offerings business practice in October 2016.

In BC Hydro’s view there is no legal requirement for FortisBC to effect the changes to its terms and conditions of service described in section 7.2.3 of its application through a tariff amendment and Commission order. However, FortisBC chose to apply for the Commission’s approval of those changes in its application given the circumstances.


Page 1 of 1


Exhibit: C1-5



1.2.2 If so, please provide the record of the Commission review of the changes to BC Hydro’s Business Practice, and the Commission Order and Decision

RESPONSE:

Not applicable for the reasons set out in BC Hydro’s response to ICG IR 1.2.1.


Page 1 of 1


Exhibit: C1-5



1.2.3 In BC Hydro’s view, is Commission approval required for the amendments described in Section 7.2.3 of the FortisBC RDA?

RESPONSE:

Please refer to BC Hydro’s response to ICG IR 1.2.1


Page 1 of 1


Exhibit: C1-5


“As such, BC Hydro has no concerns with the specific amendments to RS 101 requested by FortisBC.”

1.3.1 When BC Hydro stated that it has no concerns with the specific amendments to RS 101 requested by FortisBC, did BC Hydro contemplate that one of the effects of the requested amendments to RS 101 would be a change to transmission charges paid to FortisBC by self-generators located in the FortisBC service territory for energy deliveries to BC Hydro under existing EPAs with BC Hydro? That is, did BC Hydro contemplate that self-generators in the FortisBC service area who export power to BC Hydro would now pay full FortisBC transmission charges (and not the zero rate) for energy deliveries to BC Hydro under existing EPAs for delivering power to BC Hydro at a BC Hydro/FortisBC Point of Interconnection (POI)?

RESPONSE:

BC Hydro contemplated both questions. BC Hydro’s EPAs generally require that an IPP has the obligation to deliver its energy to the BC Hydro system. For IPPs that are not directly connected to the BC Hydro system, because they are either interconnected to the FortisBC system or to another third-party’s system, this same obligation still exists and risks related to this delivery obligation are generally borne by the IPPs. For IPPs in the FortisBC service area that sell energy to BC Hydro under an EPA, this delivery obligation is to a POI between the FortisBC and the BC Hydro systems.

Per the terms of such EPAs, IPPs will generally be required to demonstrate to BC Hydro that they have the necessary arrangements with the third-party to use the third-party’s transmission system for the delivery of the EPA energy but BC Hydro will not be privy to the payment arrangements as between the IPPs and the third-party.


Page 1 of 1


Exhibit: C1-5


“BC Hydro does not seek an end to rate harmonization per se, nor does it object to FortisBC’s specific tariff amendment proposal. Rather, it seeks to alert the Commission to the reasons that a broader review of rate harmonization may be warranted despite FortisBC’s evidence on this point.”

1.4.1 Please provide further details regarding the “broader review of rate harmonization” being proposed by BC Hydro. For example, would BC Hydro propose that the review be initiated by an application filed by BC Hydro seeking approval for a new rate harmonization approach/mechanism? If so, when would BC Hydro propose to file such an application?

RESPONSE:



Page 1 of 1


Exhibit: C1-5

5.0 Reference: BC Hydro Open Access Transmission Tariff – Business

Practice, Posting of Transmission Service Offerings, page 3, Notes to Table 1, Note 1

“BCHA.NTWK.LD is only available to BC Hydro for network service from designated/ non-designated resources.”

1.5.1 Please explain whether BC Hydro posts OASIS transactions using the BCHA.NTWK.LD point of delivery for energy schedules from generators outside its service territory supplying electricity to BC Hydro, and if not, why not.

RESPONSE:

In its capacity as Transmission Service provider under the OATT, BC Hydro posts import Available Transfer Capability (ATC) on OASIS for the BCHA.NTWK.LD Point of Delivery. All posted paths are identified in BC Hydro’s Posting of Transmission Service Offerings Business Practice, which are located at https://www.bchydro.com/content/dam/BCHydro/customer-portal/documents/corporate/suppliers/transmission-scheduling/business_practices/2016%20October%20-%20Posting%20of%20Transmission%20Service.pdf.

BC Hydro in its capacity as a NITS OATT customer can reserve Network Economy transmission service using the BCHA.NTWK.LD Point of Delivery to transfer energy generated outside of BC Hydro’s service territory to its network load in accordance with the OATT.

https://www.bchydro.com/content/dam/BCHydro/customer-portal/documents/corporate/suppliers/transmission-scheduling/business_practices/2016%20October%20-%20Posting%20of%20Transmission%20Service.pdf





Page 1 of 1


Exhibit: C1-5


Practice, Posting of Transmission Service Offerings, page 3, Notes to Table 1, Note 6

“Transmission Customers wishing to utilize internal BC paths to/from the FBC service territory must submit an OASIS request to book the transmission and submit an energy schedule.”

1.6.1 Is a self-generation customer in the FBC service territory supplying power to BC Hydro under an EPA with BC Hydro required by BC Hydro to submit an OASIS request to book the transmission and submit an energy schedule?

RESPONSE:

No. If a generator, whether an IPP or a self-generator, in the FortisBC service area is delivering energy to BC Hydro pursuant to an EPA with BC Hydro, such generator is not using the BC Hydro transmission system and accordingly no OASIS request is required of the IPP.


Page 1 of 1


Exhibit: C1-5


Practice, Posting of Transmission Service Offerings, page 6, Note to Table 2

“BC Hydro and FortisBC have adopted (as directed pursuant to BCUC Order G-12-99) the harmonization of transmission wheeling rates. Such harmonization eliminates rate “pancaking” between the two utility services areas by using a “license plate” approach whereby a transmission service rate customer within BC is only charged for wheeling by the utility within whose service area the customer is located. A transmission customer will need to demonstrate to BC Hydro, with a BC Hydro TSR, that its POD at a FortisBC POI is associated with an equivalent PTP reservation to a FortisBC TSR POD located in FortisBC’s service territory to receive $0 rate per BC Hydro OATT Schedule 01. Ancillary Services will be charged by each utility independently based on the reserved capacity for these reservations.”

1.7.1 Would BC Hydro consider transmission customers purchasing Network Integration Transmission Service from BC Hydro and FBC to be eligible for the harmonization of transmission wheeling rates described in the reference?

RESPONSE:

No. Network Integration Transmission Service (NITS) is not eligible for rate harmonization. Please refer to BC Hydro’s response to BCUC IR 1.2.1.


Page 1 of 1


Exhibit: C1-5


Practice, Posting of Transmission Service Offerings, page 6, Note to Table 2

“BC Hydro and FortisBC have adopted (as directed pursuant to BCUC Order G-12-99) the harmonization of transmission wheeling rates. Such harmonization eliminates rate “pancaking” between the two utility services areas by using a “license plate” approach whereby a transmission service rate customer within BC is only charged for wheeling by the utility within whose service area the customer is located. A transmission customer will need to demonstrate to BC Hydro, with a BC Hydro TSR, that its POD at a FortisBC POI is associated with an equivalent PTP reservation to a FortisBC TSR POD located in FortisBC’s service territory to receive $0 rate per BC Hydro OATT Schedule 01. Ancillary Services will be charged by each utility independently based on the reserved capacity for these reservations.”

1.7.2 If not, what is BC Hydro’s justification for offering harmonization of transmission wheeling rates to transmission customers purchasing Point-to- Point service, but not to customers purchasing Network Integration service?

RESPONSE:


c1-5€¦ · c1-5 . 1.0 reference: page 1, lines 11-14 “the specific amendments proposed are...

Documents