FEYI - BCUC · residential customer class as a result of the move to the SAP CIS in January 2012....

D Barry Kirkham, QC+ Robin C \ldcfarlane+

josephme M Nadel+- jdmes D Burns+ Allison R Kuchra+ jeffrey B 1 ightfoot+

jdmcs L CdfPlck. + Christopher P yVeafer+ Patnck J Haberl+ Michael P V dughan Andre j BC'aulieu+ C Gary i\1 Yaffp+ Harley J Hdrr:s+ Jonathan L Wllliams+ Paul A Brdckstont~+ Scott H Stephens+ Edith Rydn james W Zailsoff Daniel H Coles Jocf'lyn !v1 Le Dressay Carl J Pines, Associate Counsel+

R Keith Thompson, AssoCIate Counsel+

Rose~\1a:ry L Basham, QC, AssociatE' Counsel+

Hon Walter SOwen, OC ex, LLD (1981)

John 1 Bird, QC (2005)

November 21,2013

VIA ELECTRONIC MAIL

j David Dunn+

Duncan j ~\ilanson+

Ddmel W Burnett+

RO!1dld G Paton

Gn'gory J Tucker+ Heather E ;vlaconachlE'

Michael F Robson .....

Zad1ary J AnSley

Pamela E Sherrard

Kathanna R Spotz!

British Columbia Utilities Commission Sixth Floor, 900 Howe Street Vancouver, B.C. V6Z 2N3

Douglas R johnson+

Alan A Frvdcnlund+ ,.

HMvey S Delaney+

Paul J Brown+

Karen S Thompson+

Terence W Yu,

James H \1cBedth+

Susan C Gdchrist Ceorge J Rop<:'r

+ LdW Corporation

... :\lso of the Yukon BM Also of the Albprta BM

Attention: Ms. Erica Hamilton, Commission Secretary

Dear Sirs/Mesdames:

PO Box 49130 Three BentaH Centre 2900-595 Burrard Street Vancouver, BC Canada Y7X IJ5

Telephone 604688-0401 Fax 604 688-2827 Website www.owenbird.com

Direct Line: 604691-7557

Direct Fax: 604 632-4482

E-mail: [email protected]

Our File: 2384110096

Re: FortisBC Energy (Vancouver Island) Inc. (FEVI) 2014 Revenue Requirements and Rates Application, Project No. 3698732

We are counsel for the Commercial Energy Consumers Association of British Columbia (CEC). Attached please find the CEC's first set ofInformation Requests with respect to the above-noted matter.

A copy of this letter and attached Information Requests have also been forwarded to FEVI and registered interveners bye-mail.

Should you have any questions regarding the foregoing, please do not hesitate to contact the writer.

Yours truly,

OWEN BIRD LAW CORPORATION

CPW/jlb cc: CEC cc: FEYI cc: Registered Interveners

{00071479;1) INTERLAW

C3-2

markhuds

FEVI 2014 RRA

COMMERCIAL ENERGY CONSUMERS ASSOCIATION OF BRITISH COLUMBIA (CCE)

INFORMATION REQUEST #1

FortisBC Energy (Vancouver Island) Inc. (FEVI) 2014 Revenue and Requirements and Rates Application

Project No. 3698732

1. Reference: Exhibit B-1,

Ii

1.1. Please explain how the Squamish TSA would terminate, when this might happen and

under what conditions this may occur. 1.2. Please explain why the Squamish TSA condition was put in place.

1.3. Please explain how the Special Direction may be changed and or closed out such that all conditions are satisfied.

2. Reference: Exhibit B-1, Page 3

7

o ! !

12

14 15

2.1. Please explain how FEVI would integrate into the PBR Plan, if approved, if the

Special Direction and the Squamish TSA was still in effect. 2.2. Please explain whether or not the approval of amalgamation and adoption of common

rates would directly affect the Special Direction and or the Squamish TSA.

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2


17

3.1. Given that the two request referenced are not requests in this application and that FEVI is not asking for any rate relief, is FEVI asking for confirmation of the continuation of the rates currently in existence.


Figure 131-1: Total Energy Demand by Rate Schedule Group4

" -: , ~ ; " , , ; " 9 i <.~;

; .: ,~ ",'? , t r;. )(! ;

Tab!e 81-2: Net Customer Additions

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3

4.1. Please explain why the 2014 residential load forecast is declining, when the number of customers is increasing at a greater rate than the previous year (please confirm that this is related to availability of competitive alternatives, leading to reducing demand).

4.2. Please explain why the number of industrial customers increased significantly inn 2013, after years of no change (was this related to a reclassification of customers).

4.3. With the industrial class being such a significant element of the total demand forecast would it be reasonable to expect that the FEVI demand is extremely sensitive to the criteria used by industrial customers to determine their energy sources and the

available options. 4.4. How does FEVI go about ensuring that it will not lose the important industrial base?

5. Reference: Exhibit B-1, Pages 12 and 13 and 14

7

4 5

5.1. Please confirm, or otherwise explain, that the Industrial customer group increased by more than 50% in 2013, in that there were 26 additions in 2013, and the eurrent total

is 50. 5.2. Please confinn, or otherwise explain, that there would have been 17 industrial

customers in 2004 accounting for 28.3 PJs. 5.3. Please explain what factors led to the significant increase in Industrial customers.

5.4. Please explain why the Industrial customer group did not experience a corresponding increase in demand relative to customer additions, and why the demand has in fact

declined by more than 20% sinee 2004.

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4

6. Reference: Exhibit B-1, Page 16 and Page 16

1, 2, 7

24

27

6.1. Please confirm or otherwise explain that the main difference in reporting is that the new system counts meters at a given point in time (i.e. on single reporting date), whereas the previous system counted meters in effect over a longer period (i.e. full month)?

6.2. Is it FEVI's position that the new system is more accurate because it eliminates double counting at some level? Please explain why the system is more accurate.

7. Reference: Exhibit B-1, Appendix 1)4, Page 13 and Page 14

Table 1: Adjustment Rate SchedUle

7 Table 81-2: tiel Customer AddiHons

4

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5

7.1. Please confirm that as of 2012, the residential customer count adjustment would have resulted in an approximate reduction of 2.5% in residential accounts, as calculated by dividing the 2,332 FEVr residential customer reductions into the total residential

customer base derived by deducting the residential customer additions in 2012, 2013 and the forecast 2014, from the 95,858 forecast residential customers.

7.1.1. If not confirmed please provide the proportionate reduction for the residential customer class as a result of the move to the SAP CIS in January 2012.

7.2. Please confirm that as of 2012, the commercial customer count adjustment would have resulted in an approximate reduction of 7.7% of commercial accounts as calculated by dividing the total large and small customer accounts removed (605+92)

into the commercial class customer base derived from deducting the commercial additions in 2012,2013 and forecast 2014 from the 9176 forecast of commercial customers.

7.2.1. If not confirmed, please provide the proportionate reduction for the

commercial customer class as a result of the move to the SAP CIS in January 2012.

7.3. Please provide FEVI's understanding of the large disparity between the residential customer accounts that were adjusted and the commercial accounts.


7

8.1. Does FEVI distinguish average use per customer between single family residential and multifamily residential accounts?

8.1.1. If so, please provide the average use per customer in single family residential and average use per customer in multifamily residential.

8.1.2. If not, please explain why not. 8.2. Please provide the mix of customer types and the change in that mix over time

historically and projected into the future.

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6

9. Reference: Exhibit B-1, l>age 18

9.1. Does FEVI prediet residential customer use per eustomer solely on historieal trends or conduct forward looking analysis as well?

9.1.1. If FEVI conducts forward looking analysis as well, please provide the foreeasts that FEVI uses in its residential customer use predietions and the data sets that were ineorporated into the 2014 forecast.

9.2. If FEVI does not incorporate forward looking trends into its analysis, please explain

why not.


10.1. Please provide particulars with respect to how the eommercial class additions are forecast based on 'recent trends' in the Commercial rate classes and where such

trends might be identified. lO.2. Does FEVI examine the expected GOP, forecast unemployment or other economic

forecasts to forecast additions or does it rely on historieal data? Please explain. 10.3. What are the 'recent trends' that FEVI used to predict the customer additions for

2014? Please provide details as to how these were applied. 10.4. What are the key industries in the FEVI commercial classes?

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10.4.1. For each commercial class please provide a breakdown of the major commercial segments and the proportion of total commercial energy consumed by each.

10.4.2. For each commercial class, please provide a breakdown of the number of

customers by industry segment.

7


4

7

11.1. Does Vancouver Island have a significant industry devoted to energy efficiency and demand side management? Please provide FEVls understanding of the energy efficiency industry in FEVI territory.

11.2. Please explain what FEVI is referencing with respect to 'changes in building stock'?

Please give examples. 11.3. Please explain what FEVI means with respect to 'changes in appliance uptake'? 11.4. Please provide a discussion of the drivers behind the 'switching between energy

sources' (gas/electric) and its impact on gas use per customers. 11.5. Please confirm that one major driver between customer switching between gas and

electricity is based on the price of natural gas in FEVI service territory. 11.6. Please provide FEVf's estimation of residential and commercial customer elasticity

with respect to switching between natural gas and electricity.

11.7. Does FEVI predict the use per customer to increase in the event of a move to amalgamation and postage stamp rates? Please explain why or why not.

12. Reference: Exhibit B-1, Page 21and Page 22

14

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8

12.1. Please provide the reasoning and all the relevant data sets that were used to predict the decline in SCS 1 and the increase in SCS 2 use per customer rates.

12.2. Please provide the reasoning and all the relevant data sets that were used to make the predictions of flat UPC for LCS 1, small decline in UPC for LCS2, increase in UPC for LCS3 and decline in UPC for AGS.

12.3. Please provide the variation in FEYI's actual and the forecast commercial customer additions for the last 10 years.


Apartment Service (AGS)

4

13.1. Pleasc confirm or otherwise explain that the AGS is a single commercial account for a residential apartment block, and that individual apartment owners are not billed separately.

13.2. If so, is this typical of apartment buildings in the FEY! service area and in BC?

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Please explain and if not typical, please explain what proportion of residential apartment owners with natural gas service have individualized, residential billing.

9


5 Additions

2

14.1. Why did FEVI experience a major reduction in customer additions in 2006?

14.2. On what basis is FEVI predicting an additional 76 customers to the commercial rate

classes for 2014? Please provide the rationale and relevant datasets by which FEVr

predicted an increase of 76 customers. 14.2.1. If FEVI is predicting the increase in commercial customers as a result of

historical trends, how can FEVI have confidence in its predictions given

the relative inconsistency since 2004?

14.3. Why does FEVI not expect any additional Industrial customers?


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15.1. Please provide the references, datasets, and rationale or other evidence by which FEVI has forecast that there will be 25 eNG buses and 15 eNG trucks for a total of 40 eNG vehicles on the road consuming 1,000 GJs annually.

15.2. Does FEVI expect that the natural gas for transportation market will increase over the next 10 years? Please provide FEVls forecast for the natural gas for transportation market for each year over the next 10 years.

15.3. In what ways will FEVI be pursuing, and or developing the natural gas for transportation market?

15.4. Would FEVI agree that it is in the public interest to develop the natural gas for transportation market to the greatest extent possible? Please explain why or why not.

16. Reference: Exhihit B-1, Page 30

Proj",a;",d For"cl!st lOU zt1l4

187.1

B -5

16.1. Please confirm that the $0.1 million revenue is embedded in the F2014 Industrial sector forecast, and not in the 2013 Projected.

17. Reference: Exhihit B-1, Page 30

81

Margin f'rujea;ed For"cm ($ 2014 Vancouver hiand

Grand Total

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11

17.1. Please confirm or otherwise explain that there is no cost associated with the NGT, in that the forecast sales revenues are equal to the forecast gross margin at existing rates.

18. Reference: Section B2, Table B2-1, Page 32

14

16

17

21

Table 82·1: Vancouver Island Cost of Gas Excluding GCVA Impacts

Actual Approved Projected ApEroved

Comrnodity S 31.945[1 S 32,490.2 $ .35,627.7 S T mnspo:iatlOll Stomge Demand Ch;)r~Jes Hedging Cost.' (Gain) (i3S Supply rA:magement Costs

S~les Volumes ~:r; T~iJ 11.48R2 : 1,77:},9 11.20137 11.8130,5

Unit Cost of Gas j$,"G . .J) $ 5.85 $ 5.78 $ 8.12 S 5.98

fort?C8s,t unit

approved forecast uni! 0111el In

required to cieterrnin8

Forec~st

S

5,444.G

10,~"n,o

$ 6.22

18.1. Please identify the factors contributing to increased forecasted Transportation Demand charges in 2014.

18.2. Please identify the factors contributing to a decrease in forecasted Hedging Costs 111

2014.

19. References: Section B1, Table BI-2, Page 13; Table BI-18, Page 28; BI-9, Page 22; Table Bl-ll, Page 23

4

7 I

o '-'

As sho'wn WI Table B1-2 below, net additions are expected to increase Slightly in 2014 to 2,077 customers, Forecast [!rklitIons iJre up sligf'ltl)' from I I through 20'13 but lo"ver Ulan the additions expenenced in pnor

Table 61·2: Net Customer Additions

Reference: Table B 1-2, Page 13

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81-'18 demand in LCS "I and LCS 2 to ! .28PJs and 1.25PJs, respectively Demand from the decline that started in 2007 IS forecast at approxlnmteiyl 14.

4 Figure 81·18: Large Commercia! Demand

Reference: Table B 1-18, Page 28

:3 seen befo~v< Rate Schedule LC:S lJPC: is forecast to rerna~n nat through 20-14 at 4 approxirnately (;,J,:;. After expenencln':-; an increase In 20'12 due to the CIS adjustment, the ;:, LCS UPC has decline,j <lr1d the 20 14 forec8st 2,882 GJ.

Figure B1-9: Large Commercia! UPC

7

SECTIC~·' 131· DEM;'JC' FORECAST. REVENUE PAGE 22

Reference: Table B 1-9 Page 22

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5 6

7

o u

/"..S seen t)eiow, Rate expenenced since 20'12 and

13

to continue the upvv'ard trend

Figure 81-11: Large Commercia! UPC

PAGE 23

Referenee: Table B 1 11 Page 23

19.1. For the period 2013-2014, please provide the calculations that support demand for LCS-2 & LCS-3 customers declining as the normalized UPC for LCS -2 & LCS-3 customers increase and there being net increases in customers.

20. Reference: I~xhibit B-1, Page 33

2

4 5

20.1. Please provide FEVI's estimate of the unaccounted for gas for the years 2012, 2013

and the forecast for 2014 in GJ and as a percentage of the total commodity.


14

21.1. Please provide FEVI's estimate of the Company Use gas for the years 2012, 2013,

and the forecast for the years 2014.

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22

24

27

22.1. What inflation factor is used to adjust the gas control services charge and how was it derived?

22.2. Is the CMAE forecast subject to an inflation factor, and if so, what is it and how was it derived?


23.1. Why were the Actual late payment charges so significant in 2012 as compared to 2012 Approved and the projected 2013 and forecast 2014?

23.2. What were the other recoveries in 2012?


24.1. Is the $2.1 million in other revenue related to the level of the Mt. Hayes LNG service

to be held in the FEVI gas portfolio established on the basis of a dollar value, and

therefore not subject to change, or on the basis of a gas volume and therefore subject to a price change?

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24.2. Will the FEVI LNG Costs remain at $2.102 million beyond 2014 and into the future, or are they expected to change over time? Please explain.


24 25

25.1. Please provide Commission Letter L-21-13. 25.2. Does FEVI expect that the supplementary LNG service to change after March 31,

2015? Please provide any forecasts that FEvr has with respect to the service it will provide to FEr over the next 5 years.


Table 84-1: Departmental OaM Summary ($ thousands)

Operations Customer Selvk:e I

Energy Solutions 8. Externa! R"lnlio!1s 8. ResNlrce Dev

!nformati'y!l T "dmology Servk"s& PM

OpBratit)f)s $upp,)r! Facilities Finance &, RegulMory Setv ices

am Bt1 2M2 BtZ Btl Bt3 20M AdJiat Al:lual AdJiat ~ Pnjedian ~ I'omcaIt

100 H)O

26.1. Please confirm that to the extent that the company underspends the approved amounts that the net difference is available for retention by the FEVI shareholder.

26.2. Please provide the above analysis for the last 5 years minimum and if possible the last 10 years showing the Actual, Applied for and Approved expenditures.

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27.1. What is customer service deferred O&M? Please explain and quantify. 27.2. Please provide a summary list of what is included within the "Other" column, with

quantification if incorporating more than one item, for each department.

28. Reference: Exhibit B-1, llage 40

28.1. Please provide FEVI's rationale for reallocating Pension/Retiree and Capitalization

Software costs from O&M to capital. 28.2. What is the total dollar amount that will be removed from O&M in 2014, either to

capitaL deferral accounts or other?

29. Reference: Exhibit B-1, Page 40 and Appendix D-1

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29.1. How often are the CPI forecasts produced for each institution? 29.2. Please provide the most recent figures of the CPI from the Conference Board of

Canada, BC Ministry of Finance, RBC Financial Group, CIBC, TD Bank, & BMO.

29.3. Please provide the most recent forecasts from other major banking institutions such as

HSBC and Scotia Bank if they produce them. 29.4. Please provide the historical CPI forecasts from each of the institutions over the last

five years in conjunction with the actual BC CPI measures and calculate the variance

in forecast and actual for each institution.


• ~lil&E and

• iBEW

7

30.1. What is the total number of M&E employees? 30.2. What is the total number of Unionized employees?


2f

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31.1. Please provide a list of all of the productivity improvements documented in department budgets and implemented during 2013 and quantify the cost reductions achieved if any.

31.2. Please provide a list of all of the productivity improvements documented in

department budgets and planned for implementation during 2014 and quantify the cost reductions included in the requested revenue requirement.

31.3. Please provide a list of any productivity improvements possible or planned for 2012 and 2013 but not undertaken and instead deferred to 2014 because they would not have been profitable for FEVI to implement.

31.4. What if any incentives were provided to management or other staff to identify potential savings by streamlining, leveraging technology or optimizing opportunities? Please provide a description of any incentive programs FEVI undertakes to promote such activities.

32. Reference: Section H4, 4.4.1.2, Page 42

Pension ond OPES expense hos been and '"viii continue 10 be 0 '~)

L increases In costs for FEVI. For rnore than percent thDn the actuarial estimate that clone in 11 to

4 support the 2012-20D RRA forecosts ",,,,"n'!PI' amounts. The difference bet'tveen these

::. two amounts in a defenal aCGount in 201:3 for recovery from customers In future mles. Ho'w8'v'er, the 2014 Pension OPES O&M Forecast is 12 thousand less

7 the 2013 amount and been included in the forecasts for O&r<1.

32.1. Stated as a percentage, how much higher than the 2011 actuarial estimate completed to support the 2012-2013 RRA would the recently completed estimate be if it was

reduced by $112 thousand. 32.2. Please identify the factors making it difficult to forecast pension and other post

employment benefit (OPEB) costs.


33.1. Please provide a list of alJ of the productivity improvements documented in department budgets and impJ emented during 2013 and quantify the cost reductions

achieved if any.

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33.2. Please provide a list of all of the productivity improvements documented in department budgets and planned for implementation during 2014 and quantify the cost reductions included in the requested revenue requirement.

33.3. Please provide a list of any productivity improvements possible or planned for 2012 and 2013 but not undertaken and instead deferred to 2014 because they would not have been profitable for FEVI to implement.

34. Reference: Section B4, 4.4.2, Page 42

customer focus renmins a

10 to their ne'N

for the

The

as it focuses on

continues Its efforts to

11 enhance on recent achievements

12 enhancements.

retain and attract customer'3 influenced its and 13 14 mmket environment To focus on Inf'fO",'O:lnn customer retention and capture rates.

FE\il '.vitl undeliake "vi,·,,-d·-md the benefits of

[6 increased education and OVJareness

use and communicate

17 enCOUrLlge the effiCient use of ener9Y_

customers

message~3 and to

34.1. Please provide the estimated or actual cost by customer class for Customer focus Activities within FEVI.

34.2. Please comment on if and how the cost effectiveness of these expenditures is evaluated by customer class.


1 2

4

7

35.1. What steps is FEVr taking to minimize Pension and OPEB expense? Please explain. 35.2. What steps has FEVI taken in the past to minimize Pension and OPEB expenses?

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Please explain and quantify ways in which FEVI has bcen successful in minimizing Pension and OPEB expense.


!O I!

enhallcements

20

on connnn

Its efforts to

36.1. Does FEVI monitor its service delivery or maintain service quality indicators? 36.1.1. If so, please provide a discussion of FEVI's performance indicator metrics

and results over the last 10 years.

37. Reference: Section B4, 4.5, Page 44

34 • Governance Increases in 2014 ore for inflation [jnfj an additional <:1nmunt in the "Othe(' column of $185 thousand f(x actual insurance 201 HI D deferrDI account in tt'lot

37.1. Please identify the reasons insurance premiums increased in 2013.

38. Reference: Exhibit B-1, l>age 44

41 4me

38.1. Please provide a description of the activities that are included in Resource Development.

38.1.1. Please provide the forecast and historical data for the Resource Development activities portion of the department dating back to 2004, and please breakdown by Labour and Non-labour.

38.2. Please provide a description of the activities that are included in Energy Supply. 38.2.1. Please provide the forecast and historical data for the Energy Supply

activities portion of the department dating back to 2004, and please breakdown by Labour and Non-labour.


• 4me

39.1. Please provide a description of the activities that are included in the Information

Technology department. 39.2. Does Information Technology O&M include updates to computer software?

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in

21

39.3. If so, how often does FEVI typically update its computer software? 39.4. Has FEVI undertaken any significant IT upgrades recently?


• Finance and Increases in 20 14 are lower

and

40.1. Please breakdown the costs attributed to Finance and Regulatory affairs by function, i.e. Accounting, Regulatory Affairs etc. over the last 5 years.

40.2. Please explain why each function would be expected to vary by inflation rather than any other factor, such as regulatory requirements.


•

41.1. Please describe the activities that are included in 'Governance'. 41.2. How many staff are employed in Governance? Please breakdown by management

and exempt, and unionized.


Table 84·3: Operations 08.M ($ thousands)

2012 2012 2013 2013 2014 Actual Approved Projection Approved Forecast

42.1. Please describe what is in the non-labour operations component of the costs.

42.2. Please provide the explanation as to why the costs for 2014 are expected to remain

flat relative to the 2013 projected expenditure.

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22


7

10

than the C rHHnrt" were flchieved flS a result

""""",,'>6r ,'u',<O!tJr,n "<"",~,'hh' '.>Vlth as:,OCWIEKI

43.1. What was the total reduction in the IBEW training costs? 43.1.1. Please explain how these savings were achievable without compromising

safety or other key aspects of Distribution.


44.1. Please explain why Operations is expected to vary with inflation rather than with other factors such as the condition of the assets.

44.2. Does FEVI produce a report on the condition of the assets? Ifso, please provide.

44.3. Are there any major repairs or other major projects required in the foreseeable future? 44.3.1. If so, please provide a description, with quantification of the major

projects that are anticipated in the next 5 years, and when they would be likely to be undeliaken.

44.4. Please provide a discussion with quantification of the forecast increases in standby and explain why this project needs to be undertaken in 2014 or if it could reasonably

be deferred. 44.5. Please provide a discussion with quantification of the forecast increases in industrial

meter exchange and explain why this project needs to be undertaken in 2014 or if it could reasonably be deferred.

44.6. Please provide a discussion with quantification of the forecast increases in meter set repairs and explain why this project needs to be undertaken in 2014 or if it could reasonably be deferred.

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Table B4-4: Customer Service O&M (S thousands)

m12 m12 m13 m13 m14 Actual Approved Approved Forecast

Total O&M with Defemll

s s

45.1. Please advise when the benefit from continued gas and electric meter reading will likely be lost given what is now known about the BC Hydro Smart Meter implementation plans.

45.2. Please describe any and all further potential productivity and efficiency

improvements that may be expected to be developed from the Customer Information System and related processes.


14 The S947

22

Net

54 (552 m!Hion is thousand ';'lIiIt be nUoeated

due to

fmd lI18n exr)eeted

S100 for FEVI.

Table 85-S: Service Activities. Unit Costs & Expenditures ($ thous;:'lndsj

the

over

46.1. What were the additional billing costs associated with the higher than expected

customer count? Please quantify and describe how they were incurred, i.e. postage?

Staff? 46.2. What were the additional contact centre costs associated with the higher than

expected customer count? Please quantify and describe how they were incurred.

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24

46.3. By how much was the customer count higher than expected? Please explain in light of the Net Customer Additions being considerably lower than Approved for both 2012 and 2013.

46.4. Please provide a breakdown of the higher than expected customer count by service class.


24 2f,

",''-'',ll'''", and customer initintives

47.1. Please describe how savings were achieved lt1 research studies and customer

initiatives.


27

costs,

HI

Inflation

48.1. Has FEVI undertaken any activities to reduce postage stamp costs such as paperless

billing? 48.1.1. If so, please provide FEVI's projections for customer participation in such

programs.


Table 84-5: ES8.ER Service O&M (S thousands)

~2 ~2 ~3 ~3 ~4

Actual Approved Projection Approved forecast

G Tot~1 O&M

49.1. Please identify quantitatively any revenue benefits that are associated with the ES&ER costs.

49.2. Please identify the proportion of the ES&ER costs that are associated with generating

revenue benefits currently or in a future timeframe.

49.3. Please confirm that reducing activities and therefore expenditures for any ES&ER activity which is providing enhanced revenues would not be beneficial for customers.

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7 In 2012 the S224 of lower

50.1.

vacandes which have since been from FE! Tile Increase !11 the

increase custorner contractors and customers.

201:3 enhancements to the carbon fuel program to wny of rnore focused educuiion and cornmunicution efforts to Doth

Please confirm that FEVI intends to maintain the current staffing levels over the next five years.

50.1.1. If not confirmed, please explain why not. 50.2. Please describe and quantify 'cross charges' and explain why they were temporarily

lower than anticipated and by how much. 50.3. Does FEVI expect the cross charges to remain stable in the future? Please explain

why or why not. 50.4. If FEVI does not expect the cross charges to remain stable, please provide a forecast

of how they are expected to vary.


20 21 22

•

•

In the ES&ER dDr)£>rtmAnt has been and !I1ltiatives to manage rnrnnL,t,tn

nn<:.llr,n tile to oost serve Its

51.1. Does FEVI have targets associated with the development of new service offerings? 51.1.1. If so, please provide the targets that FEVI has established. 51.1.2. If not, please explain why not.

51.2. Is the $50 thousand increase a cost that would flow through to customers? Please

explain why or why not. 51.3. If the incentives do not all flow through to customers, please identify what proportion

is expected to flow through to customers.

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26


4.5.4.2 Engineering Services and Project Management Office Review and Forecast

2012 2012 2013 2013 2014 Actual Approved Projection Approved

Labour 139 '£ 232 S 174 :$ 232 S 20G

52. L Please provide a description o[the activities included in the Engineering Services and Project Management Office Review.

52.2. Please provide a breakdown of the Labour and Non-Labour components for each of the separate functions dating back to 2004.


27 28 29

53.1. Please describe the productivity improvements and explain whether or not they are sustainable into the future.

53.2. Please explain why there was a decrease in the number of projects requiring detailed assessment and implementation.

53.2.1. Is such a decrease expected to continue or was this an aberration? Please

explain.


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Table B4·7: Operations Support O&M ($ thousands)

Labour Non·Labour Tolal M

netv/ork


27

54.1. Please explain whether or not the repeater sites could be owned by FEVI and why they are not.


Table 84-8: Facilities O&M ($ thousands)

2012 2012 2013 2013 2014 Actual Approved Projection d Forecast

s $ s

55.1. Are there other facilities lease cost in the Facilities O&M that FEVI could own costeffectively to reduce O&M costs or all the remainder costs essentially operating contracts?


4

Table 84-9: Corporate O&M ($ thousands)

20'12 2012 20'13 2013 2014 Actual d Projection Approved Forecast

Table 84·10: Breakdown of Corporate Non·labour oaM ($ thousands)

20'12 20'12 20'13 20'13 20'14 Actual Approved Projection Approved Forecast

Adm. Total Non-labour

56.1. Please list and describe what productivity and efficiency increases have been

achieved within Shared Service for 2013 and what are planned for 2014. 56.2. Please provide a quantitative evaluation of any of the productivity and efficiency

gains made in 2013 and planned for 2014.

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Table 85·1: Capita! Expenditures (S thousands)

Growth Capit;})

Other

GAt

57.1. Please provide the Actual, Approved and Applied for Capital Expenditures for at least the last 5 years and preferably the last 10 years in the form of the table above.


Table 85·3: Sustainment Capital Expenditures ($ thousands)

~2 ~2 ~3 ~3 ~4

Actual ec:tion Forecast

58.1. Please describe what happens and quantitatively demonstrate the impact for the FEVI income and return to the shareholder when sustaining capital is approved for 2012 at $16.274 million and actual expenditures are $6.833 million, including the way in which the RSDA acts to protect customer interests.

58.2. If FEVI amalgamation were to proceed would this protective value of the RSDA be lost in a PBR process?

58.3. Please update the amounts projected for 2013. 58.4. Please confirm that the 2014 forecasted amounts are still valid.

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10 11 I

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58.5. Please compare the FEVI unit meter cost to that for FEI and discuss any relevant differences in the mix of meters that would quantitatively reconcile the unit costs or show a productivity and efficiency difference.

59. Reference: Section B5, Table B5-5, I>age 65 and Page 66

15 Table 65·5: Meter Exchange Activities and Expenditures

2012 2012 2013 2013 2014 Actual d Pro action d Forecast

Meter Recalls Scheduled 5,750 5.150 9,444 5,750 7,600 t'o'leter Recalls Unscheduled 3,620 4130 (300 460 3i30 Total Meter Recall Activity 9,370 6,210 104 .3,210 7,fH30 Unit Co,,! (Simeter) $138 SI88 S12fl $1£'3 5<165

It'; Tota! Mete, Recail Expen,jitures ($ thousands) $1 I $ S1,200 S 12

Reference: Table B5-5, Page 65

2 I For 20 2 the ""nr',rcPJAJ4 Viere 6~2 i vl}th actual The forecast for 22 meter

exceed the actiVIties 24 Failure in a sample 9fouP re::;uils in ali meters 2'" sendee

Reference: Page 66

59.1. Please confirm the adequacy of the 2014 forecast for Total meter Recall Activity and identify the factors that support that conclusion.


Table B5-6: Growth Capital Expenditures ($ thousands)

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~2 ~2 ~3 ~3 ~4

.Actual roved P . ctiorl d fomcast

4,927 4BO

8.165

30

Table 85·7: Mains Activities, Unit Costs & Expenditures ($ thousands)

2012 2012 2013 2013 2014 Actual roved P "ection roved Forecast

1.745

60.1. Please discuss why the unit cost per meter decreased in 2013. 60.2. Please provide the quantitative analysis for how the $120 increases to $126 thousand. 60.3. Please describe how and when the contractor costs for this work are established and

locked into contracts.


11 Table 85·10: Other Plant Capital Expenditures ($ thousands)


642

12

61.] . Are there any operating and maintenance savings associated with any of these capital

expenditures and if so have they been captured in the O&M forecasts?


are In FE' RSDA

62.1. Please explain the ways in which FEVI can manage long term interest expense and optimize the cost-effective use of the mix of debt to the benefit of customers and describe what savings have been made over the last 5 years.

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63.1. Please explain why gas storage assets were significantly higher in 2012 and 2013 than were approved for 2013.


tax

64.1. Please explain what FEVI can do to manage the costs and expenses for each of the taxes and descri be what savings have been made over the last 5 years.

65. Reference: Section C3, Page 101

13

14 The expen:::;e coiell lated for 2014 reflects tl'le 15 RRA Commission Order (;-44-12,

16 17 FE\il v/i[1 an

113 to Commission

19 time.

20 .i\i:30 in 2014. FE\iJ proposes to return to the metl-,od of 21 prior to the 2010-201 RRA

22 23 current at H-Ie time the asset is

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rats::; of

rotes every 3 to 5 ye8f~,. ,,,w,,,,,:,,: that.

expense H-,,]t expense commences at the

10 the

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65.]. Please identify the reasons FEVI proposes to return to the methodology approved prior to the 2010-201] RRA for calculating depreciation expense.

66. Reference: Section D, FORECAST Schedule 15, Page 101

66.1. Please identify the reasons the Bad Debt management forecast for 2014 is higher than 20]2 and significantly higher the amount projected for 20]3.

66.2. Please describe initiatives to reduce this expense.


22

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the future service um;! such

(Joes

USf'.

67.1. What is the total value of the service lines and mains that are not in use, but will not

go through the retirement process? 67.2. How will FEVI determine that there is no expectation that the assets would be used in

the future?

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68. Reference: Section D, FORECAST Schedule 17, Page 141

451 41:':- 4{;{j; 4-G.:1

Htlman

" . "_1

)f~,1J ~, ~ 14- U14- UHH}

69. Please identify the reason no Corporate Retiree Benefit expenses are forecasted for 2014. If this is the result of a change in the accounting treatment, please advise where forecasted costs

are now reported.

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FEYI - BCUC · residential customer class as a result of the move to the SAP CIS in January 2012....

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