Definitions

1   In this direction:

"Act" means the Utilities Commission Act;

"amortization of capital additions" means the portion of the authority's annual amortization expense that is subject to the amortization of capital additions regulatory account;

"amortization of capital additions regulatory account" means the regulatory account established under commission order G-16-09 and the direction in section 5.5.7 of the reasons that accompany that order;

"application" means the authority's Amended Fiscal 2012 to Fiscal 2014 Revenue Requirements Application filed with the commission on November 24, 2011;

"deemed equity" has the same meaning as in Heritage Special Direction No. HC2 to the British Columbia Utilities Commission;

"deferral account rate rider" means the surcharge, expressed as a percentage, as set out in rate schedule 1901 of the authority;

"F12-F14 rate smoothing account" means the regulatory account that the commission has been requested, in the application, to approve;

"F2012" means the authority's fiscal period commencing April 1, 2011 and ending March 31, 2012;

"F2013" means the authority's fiscal period commencing April 1, 2012 and ending March 31, 2013;

"F2014" means the authority's fiscal period commencing April 1, 2013 and ending March 31, 2014;

"non-heritage cost of energy subject to deferral" means the portion of the authority's annual cost of energy that is subject to the non-heritage deferral account;

"non-heritage deferral account" means the regulatory account established under commission order G-96-04 and the direction in section 4.5 of the reasons that accompany that order;

"OATT rates" means the rates in schedules 00, 01 and 03 to the authority's open access transmission tariff;

"PEI regulatory account" means the regulatory account established under commission order G-17-08;

"preparation days" has the same meaning as in Appendix A to commission order G-72-07;

"total finance charges" means the portion of the authority's annual finance charges that is subject to the total finance charges regulatory account;

"total finance charges regulatory account" means the regulatory account established by the commission by order G-16-09 and the direction in section 5.5.2 of the reasons that accompany that order;

"total rate revenue" means the portion of the authority's annual revenues that is subject to the non-heritage deferral account;

"trade income" has the same meaning as in Heritage Special Direction No. HC2 to the British Columbia Utilities Commission.

Application

2   This direction is issued to the commission under section 3 of the Act.

Orders

3   (1) Within 30 days of the date this direction comes into force, the commission must issue orders as follows:

(a) for F2013 and F2014, the commission must set the deferral account rate rider at 5%;

(b) effective April 1, 2013, the commission must set the authority's rates for F2014, except the OATT rates, at a level that is, on average, 1.44% higher than they are in F2013, subject to a commission order under section 44.2 of the Act in regard to the authority's expenditures in F2014 on demand-side measures;

(c) the commission must set the OATT rates for F2012 and F2013 as shown in the appendix to this direction;

(d) the commission must set the OATT Rates for F2014 as shown in the appendix to this direction, subject to a commission order under section 44.2 of the Act in regard to the authority's expenditures in F2014 on demand-side measures;

(e) the commission must order that the closing F2012 balance of the PEI regulatory account is not to be recovered in rates, and must order that the account be closed;

(f) the commission must allow the authority an annual rate of return on deemed equity of 11.73% and 11.84%, in regard to F2013 and F2014 respectively;

(g) the commission must order that BC Hydro's planned F2012 operating costs referred to in line 13 of schedule 3.0 of amended Appendix A to the application may be recovered in rates, less $12 million;

(h) the commission must order that the outsourcing implementation costs regulatory account, as requested in the application, may not be established, and must also order that the costs that would have been the subject of that account may be recovered in rates, as follows:

(i) F2012: $16.3 million;

(ii) F2013: $10.8 million;

(iii) F2014: $3.6 million;

(i) in setting rates for the authority in each of F2012, F2013 and F2014, the commission must accept the planned F2012 capital expenditures in regard to transmission substations referred to in line 5 of Schedule 13.0 of amended Appendix A to the application, less $55 million;

(j) in setting rates for the authority in each of F2012, F2013 and F2014, the commission must accept the planned F2012 capital additions in regard to transmission substations referred to in line 19 of Schedule 13.0 of amended Appendix A to the application, less $65 million;

(k) the commission must order, in regard to the F12-F14 rate smoothing account, a recovery to that account in F2012 of $69.7 million, a recovery to that account in F2013 of $41.2 million and the amortization from that account in F2014 of $110.9 million;

(l) the commission must order the authority to defer to the non-heritage deferral account the amount that is determined by subtracting the amount in subparagraph (i) from the amount in subparagraph (ii):

(i) the forecast return on deemed equity in F2014 calculated on the basis of the annual rate of return on deemed equity in F2014 of 11.84%;

(ii) the forecast return on deemed equity in F2014 calculated on the basis of an annual rate of return on deemed equity in F2014 that is greater or less than 11.84% as a result of a commission order arising from the generic cost of capital proceeding initiated by commission order G-20-12;

(m) the commission must order that the authority defer to the non-heritage deferral account forecast increases in the cost of energy as follows:

(i) F2012: $65.9 million;

(ii) F2013: $103.2 million;

(iii) F2014: $49.8 million;

(n) the commission must approve the following forecasts:

(i) non-heritage cost of energy subject to deferral: $743.9 million for F2012, $852.3 million for F2013 and $1053.6 million for F2014;

(ii) total rate revenue: $3 568.0 million for F2012, $3 770.8 million for F2013 and $3881.6 million for F2014;

(iii) trade income: $142.0 million for F2012, $113.0 million for F2013 and $113.0 million for F2014;

(iv) total finance charges: $570.0 million for F2012, $611.3 million for F2013 and $662.0 million for F2014;

(v) amortization of capital additions: $22.8 million for F2012, $80.2 million for F2013 and $134.5 million for F2014.

(2) In addition to the orders referred to in subsection (1), the commission must also issue the final orders requested in section 1.7 of the application, except as they are inconsistent with the orders referred to in subsection (1).

(3) The commission may not reconsider, vary or rescind the orders it issues under subsections (1) or (2), except on application by the authority.

Participant costs

4   (1) The commission, under section 118 of the Act, must order the authority to pay to applicable participants their costs for preparation days, not exceeding 30, that are incurred in respect of the proceeding arising from the application and before the date the orders referred to insection 3 of this direction are issued.

(2) Subsection (1) applies to participants who apply to the commission for their costs in accordance with the applicable guidelines of the commission.

Rates

5   In setting the authority's rates for the balance of F2013 and F2014, the commission must exercise its powers and perform its duties under the Act consistently with the orders it issues under section 3 of this direction.