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BCUC Issues Decision on Nelson Hydro Cost of Service Analysis and Rate Change

·3 min read

VANCOUVER, BC, July 19, 2022 /CNW/ - Today, the British Columbia Utilities Commission (BCUC) issued two concurrent decisions regarding utility rates for the Rural customers of Nelson Hydro Electric Utility's (Nelson Hydro):

British Columbia Utilities Commission Logo (CNW Group/British Columbia Utilities Commission)
British Columbia Utilities Commission Logo (CNW Group/British Columbia Utilities Commission)
  • The Revenue Requirements application is approved for a 2.5 percent rate increase on a permanent basis, effective January 1, 2022;

  • The Cost of Service Analysis (COSA) and Rate Design application requires modifications and is to be refiled to the BCUC within 30 days. The BCUC makes no determination on Nelson Hydro's rate design proposal until changes to the COSA are filed.

Following an open and transparent public review process, the BCUC approved Nelson Hydro's Revenue Requirements application to increase rates by 2.5 percent on a permanent basis for all of Nelson Hydro's Rural customer classes, as per Order G-198-22.

The rate change was previously approved by the BCUC on an interim and refundable basis, by
Order G-342-21, effective January 1, 2022. This rate change is due to inflationary increases and the rising price of energy that Nelson Hydro acquires from FortisBC Energy Inc. and is consistent with an increase for Nelson Hydro's Urban service area.

The BCUC also approved Nelson Hydro's COSA on the condition that the utility recalculates its analysis, as per the directions in Order G-196-22. This is due to the BCUC disagreeing with many aspects of the original application, such as the assignment of generation and power purchase costs. The BCUC ordered Nelson Hydro to refile a modified COSA within 30 days.

A decision regarding Nelson Hydro's proposed rate design for Rural customers is pending based on the changes made to the modified COSA. Nelson Hydro's rate design proposal was likely to have an impact on the allocation of costs between the Rural and Urban customer classes. The BCUC will not know whether changes to the rates for Nelson Hydro's Rural customers are justified until the modified COSA has been received and reviewed.

More information about Nelson Hydro's COSA and Rate Design proceeding can be found here, and  Nelson Hydro's 2022 Revenue Requirements proceeding can be found here.

Background

Nelson Hydro is the only municipally owned utility in British Columbia that serves customers outside of its municipal boundaries and possesses generation capacity with its transmission and distribution systems. As such, it is excluded from regulation by the BCUC under the Utilities Commission Act when it serves customers within its municipal boundaries (Urban service area). The BCUC only reviews the part of Nelson Hydro's application that affects Nelson Hydro's non-municipal (Rural) ratepayers.

About the BCUC

The BCUC is an independent regulatory body, responsible for regulating BC's energy utilities, as well as its compulsory automobile insurance rates, and intra-and provincial pipelines rates. The BCUC is also responsible for administering BC's Fuel Price Transparency Act. It is the BCUC's role to balance the interests of customers with the interests of the businesses it regulates. The BCUC carries out fair and transparent reviews of matters within its jurisdiction and considers public input where public interest is impacted.

SOURCE British Columbia Utilities Commission

Cision
Cision

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