BC Hydro Revenue Requirements Application Information Request #1

Transcription

1 BC Hydro Revenue Requirements Application Information Request #1 C28-2 By: Ludo Bertsch, Horizon Technologies Inc. For: ESVI Energy Solutions for Vancouver Island Society Date: July 5, ) Reference: Exhibit B-5-1, Chapter 1, page 1-2, Introduction: The 2002 Energy Plan is referenced. Please attach the 2002 Energy Plan. Please comment on the importance of the Energy Plan, and if that document remains the basis from which the Revenue Requirements Application ultimately is based on. There is a pending update to the 2002 Energy Plan. Has any information been released for the update to the 2002 Energy Plan and what is its schedule? 2.0) Reference: Exhibit B-5-1, Chapter 1, Table 1-1, page 1-4, BC Hydro Domestic Electricity Sales, F2005 to F2008 (GWh): There is a table listing the sales forecast for Residential. Please list the BC Hydro tariff rate schedules (specifically by tariff number) which are included in these numbers. Please repeat for Light Industrial & Commercial, Large Industrial and Other. Could these definitions be included in the Glossary in Appendix Y of the RRA? 3.0) Reference: Exhibit B-5-1, Chapter 1, page 1-6, Reliability (Customer and Supply): Please comment of whether or not appropriate rate structures will be used to help meet the reliability needs. 4.0) Reference: Exhibit B-5-1, Chapter 1, page 1-6, Customer Satisfaction: Please comment of whether or not education and information to the customers are expected to help with customer satisfaction. 5.0) Reference: Exhibit B-5-1, Chapter 1, page 1-11 to 1-12, Comparison of BC Hydro Rates with Other Utilities: In this section it may be appropriate to reference Ontario s new time-of-use program please provide an overview. It may also be helpful to here reference to the time-ofuse plans of FortBC. 6.0) Reference: Exhibit B-5-1, Chapter 1, Table 1-4, page 1-12, Average Rates for BC Hydro s Major Customer Classes, Before and After Proposed Rate Increases: Please comment if the same tariff rate schedules are used for Residential, Light Industrial and Commercial and Large Industrial as noted in item #2.0 of this document. 7.0) Reference: Exhibit B-5-1, Chapter 1, page 1-13, BCUC Requests: Should significant changes in any of the rate structures since the last RRA (such as time-of-use and stepped rates for Transmission Service customers) be included in this section? Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 1 of 12

2 Given BC Hydro s responses to the Information Requests within this document, please comment on the suitability of establishing the permanent and final rates the same as the approved interim rate increases of 4.65% and 2.71% and other requests from BC Hydro. 8.0) Reference: Exhibit B-5-1, Chapter 1, page 1-16, Organization of Application: Please comment on whether Chapter 3 considers other factors such as environmental aspects, reliability, efficiency and maximizing the existing infrastructure in addition to the most cost-effective manner. 9.0) Reference: Exhibit B-5-1, Chapter 1, page 1-17, Summary: Please comment on whether other factors such as environmental aspects, reliability, efficiency, maximizing the existing infrastructure and influencing customer behaviour are also important aspects and whether they should be considered within this section. 10.0) Reference: Exhibit B-5-1, Chapter 2, page 2-6, Operating Expenses: Is BC Hydro also responding to the resulting load resource gap through appropriate rate structures, such as stepped and time-of-use rates? 11.0) Reference: Exhibit B-5-1, Chapter 2, page 2-6, Operating Expenses: There is a discussion of extra costs for meters; are there any considerations for new time-of-use meters? 12.0) Reference: Exhibit B-5-1, Chapter 2, page 2-20, Load Variance: There is a discussion of load variances and unplanned loads. Please comment on whether stepped and time-of-use rates could reduce the load variance. 13.0) Reference: Exhibit B-5-1, Chapter 2, page 2-20, Table 2-6 Load Variance Impact on Net Income Actual and Forecast: Please comment on whether or not stepped and time-of-use rates have been taken into account for the scenarios, and if so, what impact has been contributed to them. 14.0) Reference: Exhibit B-5-1, Chapter 2, page 2-36, Site C Costs: It is stated that BC Hydro is requesting an exception to GAAP in not expensing the preliminary costs for Site C; if the expenditures are expensed (as required by GAAP), this could cause a large and unfair rate impact. This process encourages and favours the adoption of the Site C project. By capitalizing the costs throughout the preliminary stages, these preliminary costs are hidden. Therefore, the impact on the rates is also hidden. Then at a later date, with the accumulated costs over many years stored in the account, there will be extra pressure to accept Site C otherwise the rates might jump. Please specify if all projects of BC Hydro would be considered for this treatment, and what the considerations would be. Please indicate what issues relating to GAAP might result if such interpretation would be taken. Please indicate for any similar projects listed in the RRA, the percentage chance that those projects would go ahead, and why or why not they were expensed. Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 2 of 12

3 15.0) Reference: Exhibit B-5-1, page 2-47 to 2-29, Schedule 2-10 to 2-12, Load Forecast History for Energy: Please comment if the same tariff rate schedules are used for Residential, Light Industrial and Commercial and Large Industrial as noted in #2.0 of this document. Please note when each forecast was made. Similarly, please confirm the same tariff rate schedules for all references to Residential, Light Industrial and Commercial and Large Industrial throughout the RRA; where the references are not the same, please clarify. 16.0) Reference: Exhibit B-5-1, page 2-57, Schedule 2-20, Domestic Revenues (with applied for rate increases): Do these numbers take into account the stepped and time-of-use rates? If so, what was the effect on the consumption? What is the effect on the peak demand? Please add a table for peak demand. 17.0) Reference: Exhibit B-5-1, page 2-61, Schedule 2-21 to 2-24: Please specify the number of accounts for each category. Please specify the number of accounts for each line item in Schedule ) Reference: Exhibit B-5-1, Chapter 3, page 3-5 to 3-6, Load Sensitivity: Please comment on how the load sensitivity or uncertainty can be improved through appropriate domestic rate structures such as stepped rates or time-of-use rates. Has any analysis been done on the simulation of different on-peak to off-peak ratios of time-of-use rate structures? Please comment on how the load sensitivity or uncertainty calculations take into account the stepped or time-of-use rate structures during the critical times for the system. BC Hydro indicates that one key driver for sensitivity is electricity rates please clarify if this includes tariff domestic electricity rates charged to its customers and the rate structures. 19.0) Reference: Exhibit B-5-1, Chapter 4, page 4-3: Please clarify exactly what it means to seek BCUC determinations for the Advanced Metering Infrastructure project; what BCUC actions are proposed, and what stages of the project specifically are expected to be implemented within the next two years. 20.0) Reference: Exhibit B-5-1, Chapter 4, Table 4-3, page 4-6 to 4-7: It is stated that a reduction in growth investment for Power Smart of 56 per cent in F2007 due to a reduction in incentives for large industrial customers as an anticipated result of new stepped rates. Please expand and detail the items of capital expenditure for 2006 and 2007 within this category. Is some of this incentive reduction applied back to large industrial customers through expenditures in other ways? If so how? Explain how revenue-neutral relates to this item. Is there additional investment applied to Power Smart in another manner? 21.0) Reference: Exhibit B-5-1, Chapter 5, page 5-57: Please refer to item #14.0 in this document regarding capitalization of the expenses of Site C. Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 3 of 12

4 22.0) Reference: Exhibit B-5-1, Chapter 6, page 6-40, Sustainability Group: Please comment on why the operating costs for this groups is reduced in 2007 and Please provide any reports or studies that have been released by this group. Would this group be involved in evaluations of new rate structures such as time-ofuse rates and educational programs to support them? Please provide reports, including objectives and performance on deliverables on BC Hydro s involvement for the Centre for Interactive Research on Sustainability in Vancouver, EnergyINet, Dockside Green and Southeast False Creek. 23.0) Reference: Exhibit B-5-1, Chapter 7, page 7-5, Key Drivers Affecting Operating Costs: It is stated that the BC Hydro system is currently very close to capacity load and resource balance. Please comment on the potential for the infrastructure to have reliable supply during winter peak loads by affecting customer load via time-of-use rate structures and other DSM techniques. 24.0) Reference: Exhibit B-5-1, Chapter 7, page 7-6, Key Drivers Affecting Capital Expenditures: It is stated that as the demand for electricity grows beyond the capability of the BC Hydro system, new sources of supply are required. Please expand on whether the demand grows beyond the capability on an on-going basis or only at certain peak time periods, and if so when. Also, comment on whether other solutions than new sources of supply are appropriate, such as shifting peak demand through time-of-use rate structures and other DSM techniques. Please detail how decisions are made at BC Hydro to determine whether new generation or affecting the load as the most appropriate approach and to ensure all the tradeoffs are considered. 25.0) Reference: Exhibit B-5-1, Chapter 7, page 7-7, Key Drivers Affecting Capital Expenditures: It is stated that the strong economy is causing the costs of the capital program to increase. Generation is experiencing fewer bids for contracts and significantly higher bid prices. Please comment on whether these factors further support programs without large construction costs, such as implementing time-of-use rate structures and other DSM techniques. 26.0) Reference: Exhibit B-5-1, Chapter 7, page 7-19, Load Curtailment Costs: It is stated that Vancouver Island s dependable capacity supply is expected to only marginally exceed demand requirements. Please comment on whether this situation occurs on an on-going basis or only at certain peak time periods, and if so when. Also, comment on how shifting peak demand through time-of-use rate structures, critical peak rate structures, and other DSM techniques can be utilized. Generation is developing several contingency options to address uncertainties in demand growth and supply availability during this period. Please list the contingency options. Do the options include time-of-use rate structures and other DSM techniques? How does Generation effectively make such decisions (about non- Generation issues) and ensure that other solutions are being evaluated appropriately? Possible curtailment programs for Vancouver Island are discussed please detail the techniques that are being contemplated. Please list any appropriate tariff rate structures of BC Hydro that relate to curtailment. If none, please discuss why such Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 4 of 12

5 tariff rate structures are not available and any plans for introduction of such tariffs. Please discuss any longer term plans for addressing the Vancouver Island issues. 27.0) Reference: Exhibit B-5-1, Chapter 7, page 7-24, CEA Benchmarking: Since the peak for the system is during the winter months and time period for requirement of more generation, please show a graph (and other pertinent analysis) for the Outage Factor and Availability Factor for during the winter months, plus its affect for other alternate generation such as wind. 28.0) Reference: Exhibit B-5-1, Chapter 7, page 7-43 to 7-44, Burrard Thermal: Please discuss the number of hours per year that Burrard Thermal plant has been required to satisfy winter peak demands and plans for this use in the future years. 29.0) Reference: Exhibit B-5-1, Chapter 7, page 7-98: It is stated The BC Hydro system is expected to be close to capacity load and resource balance during the winter peak for the next several years. The lack of surplus capacity means that all generating units are required to be available to serve the winter peak to avoid the need for potentially high cost power purchases. Please comment on how time-of-use rate structures (both seasonal and time of day) could help deal with the winter peak and increase the reliability during those times. Please indicate the number of days per year, and hours within a day when these peaks occur. How predictable are such peaks and much notice is typically available. How long are the peaks. Please indicate historically how many times the situation was critical, and please provide predictions for the future. 30.0) Reference: Exhibit B-5-1, Chapter 8, page 8-4, Key Accomplishments: It is stated that Distribution has achieved better than planned DSM performance since its inception in By the end of F2006, BC Hydro expects to have achieved 112 per cent of its DSM targets to date at 82 per cent of the planned cost. Has this been taken into account and adjustments made for planned DSM performance in this RRA, so as not to underestimate its effect? 31.0) Reference: Exhibit B-5-1, Chapter 8, page 8-7, Table 8-2, BC Hydro Distribution Organizational Structure and Scope of Services: In the Distribution business unit organization please describe where new methods or techniques such as using smart meters and advanced meter infrastructure are being dealt with and relationship with Engineering. Are all Power Smart functions handled by the group indicated? Please indicate size of this group, historically and predictions. Please explain how Distribution works with Generation for solutions which may reduce load, therefore reduce the requirement for generation facilities. 32.0) Reference: Exhibit B-5-1, Chapter 8, page 8-10 to 8-11, Table 8-3 Distribution Performance Metrics: It is stated that a Distribution performance measure is DSM Conservation Savings (GWh/y) used to measure reliability of supply. While this is important, shouldn t another performance measure be the reduction of in customer load at the system peak times (MW) due to customer load reduction methods (e.g. various DSM techniques or appropriate rate structures such as time-of-use). What has the performance been in the past and what would the targets be? Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 5 of 12

6 33.0) Reference: Exhibit B-5-1, Chapter 8, page 8-70, Accounting Policy for Deferral and Amortization of DSM Costs: It is stated that costs incurred in the concept development phase are not capitalized as there is no assurance that any program will be accepted for development and implementation. What effect might capitalizing Site C while not capitalizing DSM opportunities have on the cost comparisons? 34.0) Reference: Exhibit B-5-1, Chapter 8, page 8-95, Advanced Metering Infrastructure (AMI): Please identify the goals of the program. What are the criteria for success or failure of the program? Please describe the relationship of this program to time-of-use rates and other rates. How many meters are expected to used on a yearly basis? Will residential, commercial and industrial be involved? Please relate to tariff rate structures. What is involved in the preliminary work leading up to 2009, including budgets? Where are the costs allocated in the budgets? When would the project be finished? What is the process to decided whether or not to go ahead? What pilots will be used or reference and are planned? Please describe the 3 phases in detail. How will intervenors be able to comment on the process? How will the education of customers be accomplished? Will more information be made public on this project? How did was the budget arrived at and describe in greater detail the budget items adding up to the projected $350-$450 million. 35.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 8: It is stated that Policy Action Item #21, New rate structure for large customers to encourage energy efficiency is completed and ongoing. Please comment and detail how the Policy Action Item #21 can be considered complete, taking into account the points raised within this Information Request document, including the Energy Plan comments in item #58.0. Please indicate what is being done on an ongoing basis for this item. 36.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 9, Stepped Rates for Transmission Customers: It is stated that better prices signals to large electricity customer for conservation and energy efficiency. Please indicate clarify what better price signals means, what reduction in peak demand is expected, what reduction in overall consumption is expected and what percentage (or targets) of the customers is expected to take use the time-of-use rate option. How has Hydro concluded that the TOU rates will be effective in reaching these goals? What was the negotiated settlement process, who was consulted, and what plans are being made for its future use? Please itemize the issues that were set aside, why they were not resolved and when and how they expect to be resolved. Will the time-of-use ratios or procedures in the Transmission Service time-of-use rate structure be the same for other time-of-use for other classes and why (or why not)? It is stated that BC Hydro has requested an early decision for the stepped rates and Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 6 of 12

7 time-of-use rates. This resulted in a deadline before the full RRA was released. This means that intervenors in the RRA process have not had an opportunity to properly investigate these rate structures. Please confirm that intervenors in this RRA process still have an opportunity to provide information requests and address the stepped and time-of-use rate structures. Please indicate when and where the ideal opportunity within the BCUC-BC Hydro processes for intervenors to address time-ofuse rates. As noted on page 8 of Appendix A, is it reasonable to state that the Energy Plan item (Policy Item #21) is complete? Are any more time-of-use or stepped rates applications planned? It is stated that in November 2005, the Province announced its intention to build on the Energy Plan with a new vision for future generations, emphasizing conservation, efficiency and innovation. Please indicate specifically what steps have been done towards this vision, please attach any documents relating to these steps, and please identify the process for intervenors to become involved. 37.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 10, Rates and Regulation: A rate design application (RDA) process is identified. It is stated that the first comprehensive rate design application is planned for Please update and specify more precisely the expected timing for this process. How often will the RDA process occur? Please confirm that all rate structures (including time-of-use and stepped rates) will be addressed and Information Requests may be made for them all. Please clarify the process and inter-relationship between the RRA and RDA, particularly should a rate structure affect the revenue or expense for example, if more expensive or advanced meters are required for a particular rate structure. 38.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 17, Energy Cost: It is stated that BC Hydro is full exposed to price risk on all customer demand in excess of its planned load, as customer rates are based on average costs (including heritage energy costs), which are significantly below the market purchases. Please comment on whether this risk would be significantly lessened through appropriate price signals - such as appropriate time-of-use rates and stepped rates. 39.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 20, Western North American Energy Sector Developments and Opportunities: The interconnected grid to Western North America is discussed. Please comment on the relationship of time-of-use rates and the exchange of energy to or from the border. In particular, are time-of-rates designed for domestic purposes (e.g. to discourage use during certain times because of system issues, for example during the winter peaks) supported by the corresponding potential trade to and from the rest of the grid? 40.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 21, Technological Developments: Please explain in this context in more detail what is meant by smart grid technology, demand-side solutions for energy efficiency and conservation. Please also provide examples. Please describe how these new techniques would be introduced and the corresponding regulatory procedures. It is stated that the value of technology developments can be enhanced in combination Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 7 of 12

8 with solutions such as rate designs and new energy efficiency building standards. Please describe specifically what rate design techniques and building standards are being considered and their corresponding timeframes. 41.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 22, Rising Cost of Construction: The shortage of labour and rising costs are discussed. Taking this into account, please comment on trade-offs between deciding on new construction of major generation projects such as dams, versus demand side solutions - improving the efficiency of the infrastructure through rate designs such as time-of-use. In particular, do the present conditions in the construction marketplace increase the costs and increase the risk through uncertainty more for such large construction projects than for demand side solutions. 42.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 22, Load Forecast: It is stated that a main variable or driver of future load growth includes electricity prices. Please clarify that these prices are the domestic tariff rates charged to BC Hydro customers. Please provide forecasts for varying time-of-use ratios and varying customer participation levels of time-of-use rates. In addition, please provide forecasts using varying critical peak rate structures. 43.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 22, Demand- Supply Outlook: It is stated that BC Hydro explores a variety of options, including contracts with independent power producers, Resource Smart projects on existing facilities, and energy conservation to meet peak demand. Are rate structures such as time-of-use or critical peak rates being considered, and if so what types? What are the results of any analysis done on the effect of such rate structures to meet the requirements? 44.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 26, Reliability (Customer and Supply): It is stated that BC Hydro will advance long-term DSM activities to ensure that future needs are met at low cost. Are other factors considered than low cost? - please expand with more details on the reasons for advancing the DSM activities. What are the regulatory procedures for these activities and what opportunities are there for intervenors to participate? Please expand appropriate price signals with new rates and rate structures for specifically what types of price signals and timeframes. Please detail what type of communication and information will be provided to customers - is this electronic or printed, is this displayed on screens in the homes/offices and is this on the Internet? Please provide time frame, milestones and budget. Please expand on the centres of excellence. How will potential partners know about the opportunities? What are the time frames, milestones and budgets? What are some specific technologies being supported now, and what are being considered? 45.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 29, Comparison of Past and Current Performance Measures: Shouldn t one of the performance measures be the reduction of customer load at system peak times (MW) due to customer load reduction methods (e.g. various DSM Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 8 of 12

9 techniques or appropriate rate structures such as time-of-use). 46.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 40, Rate Strategy: It is stated that a Time-of-Use (TOU) rate will be available as an option for those customers who choose not to go onto the stepped rates. Isn t TOU added on top of the stepped rate please clarify. It is stated that the RDA has no impact on BC Hydro s total revenue. Please clarify, and comment if this statement is also true for future years for example, through appropriate rate structures could more customers be serviced by the same infrastructure or could generation/transmission lines be delayed. Could the risk or uncertainty in calculations be improved through appropriate rate structures? 47.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 47, Advanced Metering Infrastructure: Please explain more details of the Advanced Metering Infrastructure program. What is the relationship of this project to time-of-use rate structures. Please detail what twoway communication entails. Does this include display of information directly to the customer in the home/office? Is this interactive Internet information? Will more information be provided relating to this project, perhaps compared to other project such as GM Shrum particularly considering that it is a new project and has a significant value ($350 million)? How has the $350 million been calculated; how many meters are being contemplated? Which division within BC Hydro will be taking the lead in this project? 48.0) Reference: Exhibit B-5-2, Appendix A, F2006 Service Plan, page 53, Enablers: Please detail dramatic and permanent reduction in electricity intensity. What does electricity intensity entail (consumption and peak demand)? 49.0) Reference: Exhibit B-5-2, Appendix B, Rate Schedules: Schedule 1131, 1133: Why does rate drop from 7.12 cents/kwh back down to 6.33 cents/kwh for over 600 kwh; What are the tradeoffs considering that such signals likely encourage more consumption? Schedule 1200, 1201, 1210, 1211: Why does the rate drop from 7.12 cents/kwh to 3.42 cents/kwh for over kwh; Doesn t this encourage more consumption? Schedule 1205, 1206, 1207: Why does the rate drop from 3.45 cents/kwh to 2.26 cents/kwh for over 8000 kwh; Doesn t this encourage more consumption? Schedule 1277: Why does the rate drop from 9.48 cents/kwh, then to 7.00 cents/kwh, then to 3.90 cents/kwh as consumption increases; doesn t this encourage more consumption? Schedule 1755: Compare rate to one without light sensor and show savings to customer. Schedule 1825: Please describe the incentive for a customer that uses more energy in winter and to encourage them to use time-of-use rate 1825 versus rate Please describe the target customers who would likely use this option, and percentage of customers expected. Please compare the ratios for BC Hydro s time-of-use to those at FortisBC and Ontario Hydro, and explain differences. Explain lack of time of day rates for Tier 1, Spring and Summer. What was the decision process for the rates decided? Others: Please explain the lack of time-of-use rates for any other rate structures and provide plans, including implementation schedules for introduction in the future. Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 9 of 12

10 50.0) Reference: Exhibit B-5-2, Appendix C, Financial Schedules, page 21, Operating Costs Distribution Summary by Business Unit: Please explain why Power Smart drops from $4.1 million in 2007 to $3.4 million in Please identify where new meters and replacement of existing meters is covered. 51.0) Reference: Exhibit B-5-2, Appendix C, Financial Schedules, page 42, Schedule 14.0 Domestic Energy Sales and Revenue Forecast: Please explain why Large Industrial drops 0.4% from 2006 to ) Reference: Exhibit B-5-2, Appendix C, Financial Schedules, page 43, Schedule 15.0, Miscellaneous Revenue, Terasen Meter Reading: Please explain what is covered by Terasen Meter Reading. Why does it drop from $2.9 million in 2007 to $0.7 million in 2008? 53.0) Reference: Exhibit B-5-2, Appendix C, Financial Schedules, page 44, Schedule 16.0, Full-Time Equivalents: Please explain what the extra 12 FTE staff will do in Smart Power expected from 2006 to Please explain what the extra 70 FTE staff will do in Customer Projects & Operations expected from 2006 to ) Reference: Exhibit B-5-3, Appendix P, Energy Efficiency Plan, page 5, Transmission Service Rates: It is noted that this plan reflects the expected impacts of the new Transmission Service Rate for large industrial customers, which start on April 1, Please compare to the plan that did not include the new rate, and note the differences. What is the expected percentage? 55.0) Reference: Exhibit B-5-3, Appendix R, Energy Efficiency Program Summaries, page 17, Product Incentive Program (PPP): What specific program or budget would cover these programs? Is there a list available of all the products? 56.0) Reference: Exhibit B-5-3, Appendix R, Energy Efficiency Program Summaries, page 44, In-Home Education/Technology: What specific program or budget would cover the in-house metering display? What is the time-line and how would such programs start? What education programs are planned to describe time-of-use rate structures? Would such a plan envision utilising external organisations, or be done totally in-house? 57.0) Reference: Exhibit B-5-3, Appendix S, DSM Program Evaluation Summary and Plan, page 6, Table D-2, Evaluation Studies Planned from October 1, 2005 through March 31, 2009: The table lists Stepped Rates/Time of Use Rates under Industrial, but does not list it under Commercial. Does this contradict BC Hydro s contention that it has completed the Energy Plan policy action item#21, which is supposed to cover large commercial customers? Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 10 of 12

11 58.0) Reference: Energy Plan Energy For Our Future: A Plan for BC: Page 33, Policy Action #21: Conversation and Energy Efficiency Both rate structures will benefit British Columbians by deferring the environmental impacts of new power development. Please confirm that deferring the environmental impacts of new power development are still appropriate conservation and energy efficiency measures. Please expand and list specific methods by which this could be accomplished. New rate structures will provide better price signals to large electricity consumers for conservation and energy efficiency. Please expand and explain specifically what is meant by better price signals. Please indicate how these better price signals are reflected and considered in the financial spreadsheet calculations. Please specify which tariff rate structures are considered large electricity consumers. The BC Utilities Commission will conduct a hearing to develop new stepped and timeof-use pricing for BC Hydro s industrial and large commercial customers. Please specify which tariff rate structures are considered industrial customers. Please specify which tariff rate structures are considered commercial customers. Please specify which tariff rate structures are considered large commercial customers. Please identify the name and target date of the hearing to develop new time-of-use pricing for BC Hydro s industrial customers. Please identify the name and target date of the hearing to develop new time-of-use pricing for BC Hydro s large commercial customers. Please identify the name and target date of the hearing to develop new stepped pricing for BC Hydro s industrial customers. Please identify the name and target date of the hearing to develop new stepped pricing for BC Hydro s large commercial customers. To keep rates low overall, the stepped rate structure will be revenue-neutral (see box). No such revenue-neutral statement was made for time-of-use rates. Please confirm that the 2002 Energy Plan does not restrict time-of-use rates to be revenue-neutral. On the date of this Revenue Requirements Application, is it the understanding of BC Hydro that time-of-use rates should be revenue-neutral? If so, please indicate on what date and circumstances that this restriction was added. Also, please explain what revenue-neutral means as it relates to time-of-use? Time-of-use rates will encourage customers who can manage the timing of their electricity use to shift consumption to low-priced off-peak periods. Please indicate how the present time-of-use rate structures will encourage customers to shift consumption to low-price off-peak periods. What percentage and number of customers are using to access? the new rates at this point, and how many are expected each year? What consumption and demand levels and reductions do these relate to? What marketing or information to customers has been developed to encourage the new rates? The BC Utilities Commission has approved time-of-use pricing and stepped fixed charges for Aquila Networks Canada {now FortisBC} customers, and time-of-use pilots for large BC Hydro customers. Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 11 of 12

12 Please supply in table form for Winter with Tier 1 pricing for each of FortisBC, pilot (options A, B C) and the present BC Hydro rate structure the price for off-peak and on-peak pricing periods, as shown in the table below. Winter Tier 1 FortisBC Pilot Option A Pilot Option B Pilot Option C BC Hydro Off-peak (c/kwh) On-peak (c/kwh) Please repeat for Winter Tier 2, Spring Tier 1, Spring Tier 2, Summer Tier 1 and Summer Tier 2. Please comment on significant differences compared to BC Hydro. Stepped rates will be initially applied to large rate customers. They may be applied, at a later date, to other customer classes. No such large rate customer statement was made for time-of-use rates. Please confirm that the 2002 Energy Plan does not restrict time-of-use rates to be initially applied to large rate customers. On the date of this Revenue Requirements Application, is it the understanding of BC Hydro that time-of-use rates should be initially applied to large rate customers? If so, please indicate on what date and circumstances that this restriction was added. Also, please explain specify for time-of-use which tariff rate structures this initially is to be applied and schedule for other customer classes. Ludo Bertsch, Horizon Technologies, for ESVI Version 2 Ref: DOC_12015_ESVI.TOU.Phase1.IR doc Page 12 of 12