FortisBC receives cost of capital decision from the BC Utilities Commission
SURREY, BC, Sept. 5, 2023 /CNW/ - The British Columbia Utilities Commission (BCUC) has issued its decision on Stage 1 of the generic cost of capital (GCOC) proceeding which determined the allowed return on equity (ROE) and approved capital structure for FortisBC Energy Inc (FEI) and FortisBC Inc. (FBC), a subsidiary of Fortis Inc. (TSX: FTS) (NYSE: FTS).
Respectively, FEI and FBC are the largest investor‐owned natural gas and electricity utilities in British Columbia and their allowed earnings are regulated by the BCUC. In determining the fair return for both utilities, financial and business risks were considered, multiple financial models and analyses were reviewed, and expert testimonies were heard over the course of the proceeding.
Effective January 1, 2023, the following has been approved:
The allowed ROE for FEI have been set at 9.65% and the common equity in the approved capital structure has been set at 45%.
The allowed ROE for FBC has been set at 9.65% and the common equity in the approved capital structure has been set at 41%.
The allowed ROE and approved capital structure will remain in effect until otherwise determined by the BCUC.
Current rates for the utilities were approved on an interim basis, pending the outcome of Stage 1 of the GCOC proceeding. With this decision, both utilities will now file for permanent rates.
The GCOC proceeding will now move onto Stage 2, which will determine the cost of capital for other utilities in B.C. Stage 2 begins in November 2023.
The decision and orders are available online.
About FortisBC Energy Inc. and FortisBC Inc.
FortisBC Inc. and FortisBC Energy Inc. do business as FortisBC, a regulated utility focused on providing safe and reliable energy, including natural gas, electricity, Renewable Natural Gas and propane. FortisBC employs approximately 2,652 British Columbians and serves more than 1.25 million customers in 135 B.C. communities. FortisBC owns and operates two liquefied natural gas storage facilities and four regulated hydroelectric generating plants, approximately 7,316 kilometres of transmission and distribution power lines, and approximately 51,174 kilometres of gas transmission and distribution pipelines. FortisBC is indirectly, wholly owned by Fortis Inc., a leader in the North American regulated electric and gas utility industry. FortisBC Inc. and FortisBC Energy Inc. use the FortisBC name and logo under license from Fortis Inc. For further information on FortisBC, visit www.fortisbc.com. For further information on Fortis Inc., visit fortisinc.com.
SOURCE FortisBC
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