2014 10 30 BCH 2015 RDA WKSP 3 Summary and Consideration … · 2014-10-30 · 2015 Rate Design Application Page ii 3.1.2 BC Hydro Consideration ... December 2014 workshop. BC Hydro

2015 Rate Design Application

June 25, 2014 Workshop No. 3

Electric Tariff Terms and Conditions, Residential Inclining Block Rate

BC Hydro Summary and Consideration of Participant Feedback

June 25, 2014 Workshop No. 3 Electric Tariff Terms and Conditions, Residential Inclining Block Rate



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Table of Contents

1 Standard Charges in the Electric Tariff ............................................................... 3 1.1 Introductory Comments to Standard Charges ........................................... 3

1.1.1 Participant Comment .................................................................. 3 1.1.2 BC Hydro Consideration ............................................................. 3

1.2 Late Payment Charge ............................................................................... 4 1.2.1 Participant Comments ................................................................ 4 1.2.2 BC Hydro Consideration ............................................................. 5

1.3 Reconnection Charges .............................................................................. 6 1.3.1 Participant Comments ................................................................ 6 1.3.2 BC Hydro Consideration ............................................................. 8

1.4 Account Charge ........................................................................................ 8 1.4.1 Participant Comments ................................................................ 9 1.4.2 BC Hydro Consideration ............................................................. 9

1.5 Non-Payment Report Charge .................................................................. 10 1.5.1 Participant Comments .............................................................. 10 1.5.2 BC Hydro Consideration ........................................................... 10

1.6 Credit Card Charges ............................................................................... 11 1.6.1 Participant Comments .............................................................. 11 1.6.2 BC Hydro Consideration ........................................................... 11

2 Alternative Designs to the RIB ......................................................................... 12 2.1 Three-Step Rate...................................................................................... 12

2.1.1 Participant Comments .............................................................. 12 2.1.2 BC Hydro Consideration ........................................................... 13

2.2 Seasonal Rate ........................................................................................ 16 2.2.1 Participant Comments .............................................................. 16 2.2.2 BC Hydro Consideration ........................................................... 17

2.3 Customer Specific Baseline Rate ............................................................ 18 2.3.1 Participant Comments .............................................................. 18 2.3.2 BC Hydro Consideration ........................................................... 19

2.4 Flat Rate ................................................................................................. 19 2.4.1 Participant Comments .............................................................. 19 2.4.2 BC Hydro Consideration ........................................................... 20

3 Alternative Means of Delivering the RIB ........................................................... 20 3.1 RIB Step 2 Pricing and Energy LRMC .................................................... 20

3.1.1 Participant Comments .............................................................. 20




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3.1.2 BC Hydro Consideration ........................................................... 21 3.2 RIB Step 1/Step 2 Threshold .................................................................. 22


3.3 Basic and Minimum Charges .................................................................. 24 3.3.1 Participant Comments .............................................................. 24 3.3.2 BC Hydro Consideration ........................................................... 25

4 Other Residential Rate Issues .......................................................................... 26 4.1 LRMC for RIB Ratemaking – Capacity Value .......................................... 26


4.2 Residential Voluntary TOU Rate ............................................................. 29 4.2.1 Participant Comments .............................................................. 29 4.2.2 BC Hydro Consideration ........................................................... 30

4.3 In-Depth Rate Modelling & Other Items in Follow-up .............................. 32

List of Attachments

Attachment 1 Workshop No. 3 Summary Notes Attachment 2 Feedback Forms and Written Comments Attachment 3 Allocation of BC Hydro’s Heritage Resources




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This memo documents stakeholder feedback in relation to the 2015 Rate Design

Application (RDA) June 25, 2014 Workshop No. 3 (Workshop No. 3) (Electric Tariff

Terms and Conditions, Residential Inclining Block Rate (RIB)). BC Hydro’s

consideration of this input is also set out.

The memo is structured as follows:

The main body includes a summary of comments with BC Hydro’s consideration,

organized as follows:

Standard Charges in the Electric Tariff (Part 1)

Introductory Comments to Standard Charges

Late Payment Charge

Reconnection Charges

Account Charge

Non-Payment Report Charge

Credit Card Charges

Alternative Designs to the RIB (Part 2)

Three-Step Rate

Seasonal Rate

Customer Specific Baseline Rate

Flat Rate

Alternative Means of Delivering the RIB (Part 3)

Step 2 Pricing and Energy Long-Run Marginal Cost (LRMC)




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Step 1/Step 2 Threshold

Basic and Minimum Charges

Other Residential Rate Issues (Part 4)

LRMC for RIB Ratemaking – Capacity Value

Residential Voluntary Time of Use (TOU) Rate

In-Depth Rate Modelling & Other Items in Follow-up.

Attachment 1 includes the Workshop No. 3 summary notes which provide a more

detailed description of issues (including questions and answers).

Attachment 2 includes the feedback forms and written comments received during

the written comment period.

Attachment 3 contains BC Hydro’s comments with respect to the issue of the

allocation of BC Hydro’s Heritage resources raised by Canadian Office and

Professional Employees Union Local 378 (COPE 378) in its written comments dated

September 2, 2014.

Workshop No. 3 was held in Vancouver, B.C. Stakeholders were also given an

opportunity to participate remotely through a webinar. Copies of the workshop

invitation and presentation slides can be found on the BC Hydro website at

bchydro.com/about/planning_regulatory/2015-rate-design.html.

Stakeholder feedback was received during Workshop No. 3, and through feedback

forms and written comments submitted during a subsequent 45-day comment period

which began with the posting of draft Workshop No. 3 notes on July 16, 2014.




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1 Standard Charges in the Electric Tariff

1.1 Introductory Comments to Standard Charges

1.1.1 Participant Comment

COPE 378 commented that BC Hydro should seek input on the principles that inform

the various items considered in updating the Standard Charges, that is participants

should know: if charges are to reflect incremental costs, or the basis of the charge;

how BC Hydro reconciles incremental cost recovery with its embedded Cost of

Service (COS) model; and where and why an average cost approach is used or

whether a cost is customer specific. Once the principles discussion is underway,

COPE 378 would also like to see how the charges are calculated to determine the

appropriateness of the specific fees.

1.1.2 BC Hydro Consideration

One of the principles informing the various items considered in updating the

Standard Charges is recovery of BC Hydro’s costs – and these typically are average

costs. Incremental costs are more relevant to the Distribution extension provisions

found in section 8 of the Electric Tariff, which will be the subject of a separate early

December 2014 workshop. BC Hydro is of the view that a marginal COS is not

required for purposes of potentially revising the Standard Charges. There is no

inconsistency in using an embedded COS as one of the sources informing the

Standard Charges. As set out in its consideration memo concerning the

June 19, 2014 COS workshop available at BC Hydro’s 2015 RDA website, most

electric utilities use embedded COS to analyze cost causation and allocate revenue

requirements (RR).

In BC Hydro’s view, the major Standard Charge cost issue is whether the charge

should be customer specific, or whether all customers benefit and some portion of

the cost should be spread among the Distribution connected customers. However,




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not all Standard Charges concern recovery of costs – an example is the 1.5 per cent

late payment charge discussed below.

For purposes of the proposed February 2015 workshop on residential rates and

Standard Charges, BC Hydro will document and seek input concerning the basis for

its Standard Charges, and indicate where an average cost has been applied or

where a charge is customer specific.

1.2 Late Payment Charge

Pursuant to sections 6.2 and 11.3 of the Electric Tariff, BC Hydro’s late payment

charge of 1.5 per cent per month is assessed on a bill with an unpaid balance of $30

or more that has not been paid in full on or before the due date of the bill. BC Hydro

sought feedback on whether there should be a $30 threshold for the charge to be

applied.

1.2.1 Participant Comments

BC Hydro received a range of views on this topic.

BC Sustainable Energy Association & Sierra Club of British Columbia (BCSEA)

noted four considerations: (1) impact on low-income customers; (2) a low charge

may incent some customers to pay late; (3) simplicity for both the customer and

BC Hydro, i.e., late payment charges on amounts under $30 “would be more trouble

than it’s worth”; and (4) the legality of the 19.6 per cent effective interest rate.

British Columbia Old Age Pensioners’ Organization (BCOAPO) suggested that there

be separate terms and conditions for low-income customers, including ‘lower late

payment charges and interest rates on overdue accounts’. COPE 378 questioned

which customers have bills less than $30, and sought to understand the rationale for

the $30 threshold and its continued use. COPE 378 thought the charge should be

BC Hydro’s cost plus a reasonable amount to create a disincentive for late payment.




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Commercial Energy Consumers Association of BC (CEC) indicated that the late

payment charge should apply to all outstanding bill amounts and should also include

processing costs.


BC Hydro notes that the late payment charge of 1.5 per cent per month is not

characterized in the Electric Tariff as an interest rate but understands how that

assumption has been made, particularly with the inclusion of the equivalent

19.6 per cent per annum compounded monthly figure in section 11.3 of the Electric

Tariff.1

The rationale for late payment charges is that all customers benefit from

encouraging the prompt payment of bills, which in turn reduces costs to utilities. The

1.5 per cent charge and the $30 threshold have been in place since their

introduction in 1977. The British Columbia Utilities Commission (BCUC or Commission) as part of its 2007 decision concerning BC Hydro’s 2007 RDA

approved continued use of the 1.5 per cent late payment charge.2 BC Hydro notes

that many electric utilities it surveyed charge customers a late payment of

1.5 per cent per month: FortisBC Inc. (FortisBC); New Brunswick Power; Nova

Scotia Power; and Ontario electric utilities such as Hydro One and Toronto Hydro

Electric System. (A late payment charge of 1.5 per cent per month is the maximum

allowed by the Ontario Energy Board).3 Manitoba Hydro charges customers a late

payment of 1.25 per cent per month. BC Hydro undertook high-level analysis of its

accounts receivable reporting for outstanding balances of less than $30 that are

overdue between 30 and 60 days. Approximately half of the accounts are

apartments, predominantly in the Lower Mainland.

1 The legal issue raised by BCSEA concerns section 347 of the Criminal Code, which establishes the offence

of charging or receiving an effective interest rate that exceeds 60 per cent per year on credit advanced. 2 In the Matter of British Columbia Hydro and Power Authority: 2007 Rate Design Application, Phase-1,

Decision, October 26, 2007 (2007 RDA Decision), pages 199 to 200. 3 http://www.ontarioenergyboard.ca/OEB/Consumers/Electricity/Customer+Service+Rules.

http://www.ontarioenergyboard.ca/OEB/Consumers/Electricity/Customer+Service+Rules




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Given the results of its jurisdictional assessment, BC Hydro is not proposing

changes to the 1.5 per cent late payment charge at this time, but remains open to

further input. The expected revenue impact of assessing a late payment charge for

accounts with less than $30 owing is estimated to be less than $100,000 per year

(the late payment charge revenue is estimated to be $7.5 million for F2015).

BC Hydro agrees with BCSEA’s simplicity consideration, and given the relatively

small amount, BC Hydro will not be pursuing a proposal to eliminate the

$30 threshold.

1.3 Reconnection Charges

Currently, sections 6.7 and 11.2 of the Electric Tariff provide for a minimum

reconnection charge ($115 – regular hours; $158 – overtime; and $355 – call out).

BC Hydro requested feedback on what costs should be included in the reconnection

charge:

• disconnection process and reconnection process costs

• capital and Information Technology (IT) costs for the remote

disconnect/reconnect (RDR) switch for the disconnection and the reconnection

• IT costs for self-serve reconnection

• manual disconnection and manual reconnection costs.

BC Hydro questioned whether there should be an average charge for both the

remote and manual disconnect/reconnect and whether there should be a different

charge for customers moving into vacant disconnected premises.


Commission staff commented that the basis for the costs is needed to determine

what should be included in the reconnection charge – in particular, any reduction in

costs as a result of RDR as compared to manual costs should be reflected in the

charge. Clarification is needed as RDR is seen as standard functionality with benefit




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to all residential customers, rather than as an incremental cost to be recovered in the

reconnection charge. Commission staff questioned whether situations such as

seasonal disconnections would provide customers with the option to pay RDR costs

rather than the rate minimums.

BCSEA noted that: (1) it supports “making it less difficult for people with financial

difficulties to reestablish service after a disconnection”; and (2) more information is

needed on the impact to seasonal or intermittent occupancy with the reduction of the

reconnection charge, e.g., whether a lower reconnection charge would result in more

service termination requests, the pros and cons of doing so, the revenue cost to

BC Hydro and safety issues.

BCOAPO stated that disconnection costs should not be included in the reconnection

charge. Costs for each agent-performed process should be determined to arrive at

the costs for the reconnection process, for use in the reconnection charge. IT costs

for self-serve reconnection, as well as RDR switch and IT costs, should not be

included in the reconnection charge as they are “part of the basic functionality of the

smart meter program and benefit all users of the system”. Manual costs should be

built into the reconnection charge but “the full cost of the reconnection fee can still

be collected from customers who opt out of smart meters”. Manual and remote costs

should be incorporated into the reconnection charge.

CEC stated that the following costs should be included in the reconnection charge:

an estimated average of agent costs, a proportional amount of the RDR switch and

associated IT costs, manual disconnection/reconnection costs, and a proportional

amount of IT costs for self-serve reconnection. CEC further stated that an average

reconnection charge should be used for remote and manual disconnections as

individual costing would be administratively costly and that there should not be a

different reconnection charge for unsigned premises as the charge should be

standardized.




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The reconnection charge is designed to recover all associated costs; any costs not

recovered in the charge go to the broader rate base. BC Hydro’s primary use of

RDR is for account management and collections, which were the drivers for the

investment. BC Hydro agrees with BCOAPO that the RDR switch and IT costs

should not be included in the reconnection charge given the benefit to all customers.

BC Hydro chose to purchase RDR-enabled meters and implemented use of the

RDR switch to improve management of its accounts receivables and bad debts. For

the proposed February 2015 workshop, BC Hydro will model the reconnection

charge to include detailed disconnection costs. Detailed costs for manual

disconnection/reconnection will also be included in the analysis. BC Hydro will look

at detailed agent costs for the credit review and payment reporting processes.

Disconnected customers that wish to reconnect within 12 months of the service

termination are required to pay the greater of the costs of restoration or

reconnection, or the total minimum charges the customer would have paid

(section 2.6 of the Electric Tariff). If the 12-month rule were to be removed,

BC Hydro would need to consider impacts and would need to ensure gaming would

not occur so as to impact its fixed cost recovery (through the Basic Charge).

BC Hydro will report out on these issues at the proposed February 2015 workshop.

As the Smart Meter Choices Program monthly and initial charges were recently

reviewed by the Commission (Order No. G-59-14), BC Hydro considers a separate

reconnection charge for those customers who opt for a legacy or radio-off meter to

be out of scope for purposes of putting together its 2015 RDA.

1.4 Account Charge

Sections 6.4 and 11.3 of the Electric Tariff pertain to the account charge, which is

$12.40 when a “change in Customer occurs”. BC Hydro asked for feedback on

charging a different set-up fee for new customers, and whether a discount should be




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provided for customers who do their account set-up online. Costs to process the

move-in for a new customer are higher than for existing customers who move and

have a previous account with BC Hydro, as additional steps are required to verify

new customer information.


Commission staff questioned whether BC Hydro intended to survey for residential

customer preferences.

BCOAPO commented that existing customers should not be charged as much as

new customers “given that low-income ratepayers probably move more often than

those with higher incomes”. A discount for processing a move online was not

supported given accessibility to the internet, with the observation that a discount is

not provided for those who pay their bills online.

BCSEA noted that there wasn’t enough of a distinction provided between a new

customer and an existing customer to determine if the charge should be different.

BCSEA was supportive of a discount for customers processing their move online.

CEC indicated that if the cost for a new customer set-up was significantly different,

the account charge should be different. Additionally if the savings are meaningful for

self-serve account set-up, there should be a discount.


In addition to determining the additional costs for new customer validation, BC Hydro

will better define what is meant by a new customer.

BC Hydro will not be proceeding with offering a discount for processing a move

online. The online service is fairly new and some customers may be disadvantaged

by not having internet access. BC Hydro appreciates BCOAPO’s point concerning

the consistency of not offering discounts for other online transactions. Based on

initial analysis, BC Hydro estimates a savings of $300,000 with online move




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processing. These and additional savings from increased use of self-service options

will be reflected in the analysis of moving and account set-up costs.

In August 2014, BC Hydro hosted six residential focus groups in the Lower

Mainland, Nanaimo and the Interior/Northern area of B.C., which among other things

canvassed various charges. A summary of these six focus groups will be posted to

BC Hydro’s 2015 RDA website.

1.5 Non-Payment Report Charge

BC Hydro asked whether there should be a charge for reporting payments not

received to deter such behaviour, if the reconnection charge is significantly reduced.


BCOAPO indicated that such a charge may deter behaviour and also noted that

‘penalties’ should be carefully considered given other impacts to customers who do

not make their payments. BCSEA requested further information on the linkage

between a reduced reconnection charge and the non-payment report charge but

considers such a charge may be needed. BCSEA further suggested consideration of

a sliding scale charge for repeat occurrences. CEC indicated that there should be a

non-payment report charge.


BC Hydro clarifies that the reconnection charge is to recover costs, and its current

level acts somewhat as a deterrent to service disconnection. However, if the

reconnection charge is reduced to a low amount, customers may report payments

that have not been made to be reconnected for little cost. An additional charge to

address non-payment reporting may deter such behaviour.

BC Hydro will consider current volumes of customers who report payments that are

not received, particularly where a manual disconnect/reconnect is required as a

reduced reconnection charge will not recover those costs while a non-payment




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report charge may offset some of those costs. BC Hydro will set out its analysis and

proposal concerning a non-payment report charge at the proposed February 2015

workshop.

1.6 Credit Card Charges

BC Hydro requested feedback on whether credit card payments should be accepted

and fees recovered through all ratepayers or whether credit card payments should

only be accepted if the fees could be passed on to the customer paying by credit

card.


BCOAPO did not support credit card payments unless the fees were passed on to

the customers using credit cards to pay their bills, which BCOAPO felt were more

likely to be higher income customers. BCSEA noted it does not have a final position

on recovering fees from all ratepayers. CEC indicated that credit card fees should be

recovered in the general rates as “facilitating payment methods and channels is

helpful to cash flow and to all customers”.


BC Hydro notes that there appears to be a lack of strong support for recovering

credit card payment fees, including customer feedback received through its

August 2014 residential focus groups which indicates no desire for paying by credit

cards. Accordingly BC Hydro does not intend to explore this option further.

Customers wishing to pay by credit card will continue to be able to use a third-party

provider where available.




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2 Alternative Designs to the RIB

2.1 Three-Step Rate

BC Hydro reviewed the performance of a three-step rate consisting of a Step-2 rate

set equal to the upper end of the energy LRMC and a Step 2/Step 3 threshold set to

constrain bill impacts to 10 per cent. BC Hydro requested feedback on whether it

should continue to consider a three-step rate and if so, what additional analysis

would stakeholders recommend (with reasons).


Participants seek further analysis and consideration of a three-step rate. COPE 378

suggests calibration of a third tier rate to generate sufficient revenue from affluent,

gluttonous users so as to allow for a meaningful subsidy for ratepayers that qualify

based on a Low Income Cut Off (LICO).4 BCOAPO suggests modeling a three-step

rate with a very low “heritage” rate (e.g., 5 cents per kilowatt hour (¢/kWh))

applicable to consumption below a low threshold that would reflect basic energy

needs (e.g., 250 kWh). BCOAPO suggests setting the third tier rate at a 10 per cent

premium over LRMC as a means to provide the revenue necessary to offer the very

low rate, or to fund other low-income programs.

Commission staff seek to understand whether a three-step rate would be an

acceptable and reasonable rate design to encourage efficient energy consumption,

in light of potential bill decreases and given the wide distribution in residential usage.

Staff suggest it would be useful to provide information on the number of customers

that might face decreases under a three-step rate, as well as information on the

experience in other jurisdictions with three or more rate tiers.

BCSEA indicates that BC Hydro should not pursue a three-step rate, stating that the

status quo (SQ) RIB has the advantage of simplicity, ease of understanding and

4 LICO is an income threshold below which a family will likely devote a larger share of its income on

necessities of food, shelter and clothing than the average family. Statistics Canada constructs LICOs.




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customer acceptance. BCSEA notes that a three-step rate would not induce

significantly more conservation, and many low-income customers would not benefit

(while many non-low income but low consumption customers would benefit); many

low-income customers have average or above-average consumption.


BC Hydro will model a three-step rate where the revenue collected from a high

priced third step would provide for a low rate for step 1 consumption, and will provide

information on the number of customers that might face decreases under a

three-step rate. BC Hydro will model the three-step rate using the parameters

suggested by BCOAPO as a starting point, and present the results at the proposed

February 2015 workshop.

BC Hydro agrees with BCSEA that ‘low-income’ does not necessarily mean ‘low

consumption’; some low-use customers may be high income and conversely some

high-use customers may be low income. Energy use rises with the size of the

dwelling unit. BC Hydro also agrees that a comparison of customer bills under the

SQ RIB versus a three-step rate would be useful, and this information will be

reviewed with stakeholders at the proposed February 2015 workshop, together with

a Bonbright criteria assessment.

BC Hydro reviewed other jurisdictions with multi-tiered rates (three or more tiers),

both in terms of their efficiency and general acceptance by customers, but also

where such rates are targeted to basic needs or assistance to low income

customers. Only one Canadian jurisdiction has a three-step rate, Yukon Electrical

Company Limited (YECL), with energy charges applicable to consumption up to

1,000 kWh; between 1,001 to 2,500 kWh; and in excess of 2,500 kWh.5 The

applicable rates to each block of energy vary depending on whether a customer is

5 Yukon Electrical Company Limited Rate Schedules 1180, 1280, 1380 and 1480;

https://www.yukonenergy.ca/media/site_documents/1045_1480%20Residential%20Service%20Old%20Crow%20Diesel,%20Government.pdf.




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government or non-government, and whether the customer is served by

hydroelectric or diesel. The rates applicable to third tier consumption are based on

the incremental cost of diesel generation. In 2010, the Yukon Utilities Board

determined that rates in the third block should be defined as being on the order of

50 per cent of the incremental cost of diesel generation or greater.6 While the

three-tiered rate is defined in YECL’s Rate Schedules, most customers are unaware

of the block structure of the rates as customer billing only shows one consumption

amount and one cost of energy amount.7

California residential rate structures had been the subject of legislated restrictions in

the wake of the 2001 energy crisis, resulting in large deviations from cost of service.

Four and five tiered rates were implemented. Assembly Bill IX capped rates for

Tiers 1 and 2 at February 2001 levels, and for nearly nine years all RR increases

assigned to residential customers had to be recovered through increases in rates for

Tiers 3 and above. A law passed in 2013, Assembly Bill 327, gives the California

Public Utilities Commission (CPUC) greater flexibility to set residential rates. As

discussed at Workshop No. 3, Pacific Gas and Electric Company filed a proposal

with the CPUC to move its tiered residential tariff from four to two tiers in

two stages.8 Southern California Edison Company (SCE) currently has a proposal

before the CPUC to reduce the number of tiers in its residential rate structure from

four down to two by 2017.9

BC Hydro also examined California’s ‘baseline allowance’ as this was raised by

some participants at Workshop No. 1 held on May 8, 2014 and Workshop No. 3.

BC Hydro notes that it was the California legislature, and not the CPUC, that

6 http://yukonutilitiesboard.yk.ca/pdf/Board%20Orders%202000/1158_Board%20Order%202010-13%20Appendix%20A.pdf 7 Personal Correspondence, YECL staff, October 2014. 8 http://www.pgecurrents.com/2014/02/28/pge-proposes-rate-reforms-for-residential-electric-customers/. 9 http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/6B56E1DB39AA8D6688257C8D00808524/$FILE/R.12-06-013_

RRD%20OIR-%20SCE%20Phase%201%20Rate%20Change%20Proposal.pdf. Prior to the 2001 energy crisis, SCE’s default residential rate structure was an inclining block, two-tier rate with a fixed customer charge. Tier 1 was and is the baseline rate.

http://www.pgecurrents.com/2014/02/28/pge-proposes-rate-reforms-for-residential-electric-customers/

http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/6B56E1DB39AA8D6688257C8D00808524/$FILE/R.1206013_RRD%20OIR%20SCE%20Phase%201%20Rate%20Change%20Proposal.pdf

http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/6B56E1DB39AA8D6688257C8D00808524/$FILE/R.1206013_RRD%20OIR%20SCE%20Phase%201%20Rate%20Change%20Proposal.pdf




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mandated with the 1975 Warren-Miller Energy Lifeline Act10 that each California

residential electricity customer should receive a minimal supply of electricity at a

discounted price while paying a higher price for electricity taken in excess of that

minimum. The California legislature tasked the CPUC with designating a baseline

quantity “which is necessary to supply a significant portion of the reasonable energy

needs of the average residential customer”. The baseline allowance was originally

based on the usage necessary to support specified end use of electricity.11 The

definition of baseline allowance under California statute and under CPUC orders has

evolved over time. BC Hydro understands that electric utilities presently calculate the

baseline using between 50 to 55 per cent of the average residential usage for a

number of California climactic zones.

Woven into some of the participant comments concerning a three-step rate is the

concept of a ‘lifeline’ rate. BC Hydro will continue to examine the impact of

alternative rate designs on its low income customers, together with possible rate

design changes in respect of mitigating bill impact concerns. BC Hydro takes no

position on the social value of lifeline rates, which BC Hydro believes is within the

authority of the British Columbia legislature. Rather, in the context of rate setting

function governed by sections 58 to 61 of the Utilities Commission Act (UCA), lifeline

rates are likely to be seen as unduly preferential to low-income customers or unduly

discriminatory to the remaining customers who subsidize those rates because the

lifeline rate would be based on the personal characteristics of the customer, divorced

from the cost to deliver electricity from the premises. In response to BCSEA

regarding possible UCA amendments to facilitate a lifeline rate, BC Hydro notes for

information purposes only private member Bill M 206 (the Hydro Affordability Act,

2014, introduced in the 2014 Legislative Session but not passed), which proposed a

10 California Stats 1975, Ch. 1010, section 1(a). 11 D.86087, 80 CPUC 182, 1976 Cal. PUC LEXIS 387: space and water heating, lighting, cooking and food

refrigeration.




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new section 60.1 of the UCA. BC Hydro will not be proposing amendments to the

UCA as part of the 2015 RDA.

Refer also to the topic of Step 2 Pricing at section 3.1 below.

2.2 Seasonal Rate

BC Hydro reviewed the performance of a seasonal rate design consisting of a higher

winter threshold to potentially moderate bill impacts to electric space heating

customers. BC Hydro requested feedback on whether it should continue to consider

a seasonal rate structure and if so, what additional analysis would stakeholders

recommend (with reasons).


Most participants are of the view that BC Hydro should not continue to consider a

seasonal rate structure. BCOAPO noted that the objective of a seasonal rate – to

convey a benefit on electric space heating customers – appears at odds with the

principle to avoid rates that would require BC Hydro to look behind the customer

meter. COPE 378 is concerned that a seasonal rate would be unfair and

discriminatory across different regions and peak use patterns, and would be too

complex for customers to understand, let alone respond to.

BCSEA sees no merit in exploring a seasonal rate any further. BCSEA notes that

BC Hydro is limited in its ability to reliably define and determine the category of

electric space heating customer, and that the variability in consumption and load

shape are only loosely tied to electric heat versus non-electric heat status. BCSEA

also notes that, in principle, it is during the winter months that BC Hydro’s residential

consumption peaks, and therefore it is during the winter that the price signal for

conservation and efficiency should be higher, not lower, than the price signal in the

non-peak months. BCSEA is concerned that a lower rate in winter would run counter

to the conservation supporting function of the RIB rate.




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Only CEC indicated that BC Hydro should continue to consider a seasonal rate

structure. Commission staff desire a discussion of the possible implications of

seasonal rates on exposure to Step 2 and whether fuel switching would be an issue.

Staff also seek to understand whether BC Hydro has the peaking characteristics that

would require seasonal rates.


BC Hydro agrees with the feedback of the participants who see no merit in exploring

any further a seasonal rate that consists of a higher winter threshold. BCSEA

reiterated the concern expressed by BC Hydro at Workshop No. 3 that a seasonal

rate would be misaligned with BC Hydro’s peak period cost causation (November to

February) and would result in some customers facing lower effective rates in winter

due to the higher threshold. All surveyed jurisdictions with seasonal rates have

separate higher rates in the peaking period to match the characteristics of cost

causation.

In response to the comments of Commission staff, BC Hydro notes that whether a

customer would “fall out of Step 2” depends on that customer’s consumption, which

is not driven solely by heating method. It is possible that both electrically heated and

alternatively heated homes can fall out of step 2 in the winter due to a higher

threshold. It is unlikely that this would result in a high degree of energy switching

because the economic benefit is likely to be much lower than costs for most typical

customers.

In response to Commission staff comment concerning peaking characteristics,

BC Hydro is a winter peaking jurisdiction, with demand highest in the four winter

months of November, December, January and February. It is not clear to BC Hydro

whether Commission staff, in asking this question, are raising the possibility of a

seasonal rate with a higher rate targeted to a winter season (and a lower rate in the

other months). In BC Hydro’s view, this kind of rate would be a blunt instrument to




Page 18

achieve any intended winter peak savings, and would impose higher bill impacts on

customers who already claim to have high bill impacts in winter (such as electric

heating customers). BC Hydro notes that Newfoundland Power offers a voluntary

residential seasonal rate in which residential customers pay a higher rate for

electricity during winter months (defined as December through April) and a lower

rate for electricity during non-winter months (May to November) compared to the

standard residential rate.12 Newfoundland Power states that residential customers

“most likely NOT to benefit” from the voluntary seasonal rate are “those using more

electricity in winter than the non-winter months”. Approximately 1 per cent of

Newfoundland Power’s residential customers have opted for the seasonal rate.

In addition, in BC Hydro’s view such a seasonal rate is a form of TOU rate, albeit

with the on-peak and off-peak periods being defined only as months as opposed to

hours (and months). A voluntary seasonal rate would suffer from the problems set

out in section 4.2 below. Examples include conferring a benefit to some participating

customers that do not change their consumption behaviour and yielding no reliable

capacity deferral (assuming that customers can even meaningfully shift consumption

from winter to summer, for example).

2.3 Customer Specific Baseline Rate

BC Hydro reviewed the concept of a Customer Specific Baseline Rate and

concluded that this form of rate is not a viable option for residential customers.


COPE 378 and BCSEA agree with BC Hydro’s conclusion. BCOAPO also agrees in

general terms, but notes that some U.S. jurisdictions give low-income customers and

those with certain medical conditions an additional amount of energy each day in

their baseline amounts. Commission staff question if weather variability would also

present a fairness issue with the design of a Customer Specific Baseline Rate.

12 https://secure.newfoundlandpower.com/customerrelations/seasonalrates.aspx.

https://secure.newfoundlandpower.com/customerrelations/seasonalrates.aspx




Page 19


At this time BC Hydro does not propose to pursue a Customer Baseline Rate for

residential customers. Such a Customer Specific Baseline Rate would be impractical

and would impose significant implementation challenges due to the large scale

(1.8 million residential customers), and complexity in design and billing. The

conceptual results presented at Workshop No. 3 illustrate that most customers’ bills

would not change much from the SQ RIB, and that bill increases for typical

customers that are higher than RR would otherwise be likely due to maintaining

class revenue neutrality. No North American utility offers individual residential

customer baseline rates.

Refer to section 2.1 above for BC Hydro’s consideration in regard to California’s

baseline allowance. BC Hydro is interested in what other U.S. jurisdictions BCOAPO

is referring to concerning baseline allowances for essential energy service or

medical conditions.

2.4 Flat Rate

BC Hydro reviewed the performance of a Flat Rate and observed that it performs

worse relative to the SQ RIB rate in terms of efficiency and fairness. BC Hydro

concluded that no further modeling of a Flat Rate is required and asked for

stakeholder comment.


All participants commenting on a flat rate structure except CEC agreed that

BC Hydro should not consider a Flat Rate for residential customers any further.

CEC submits that BC Hydro should consider an “efficiency rated flat rate, as an

alternative (likely as a pilot initially)”. BC Hydro followed up with CEC on what the

concept of this rate entails and how the rate would be determined. CEC indicated

that such a rate structure would be voluntary and would be based on efficiency




Page 20

ratings determined on a participating customer basis. CEC will be looking to provide

evidence to support this concept and how it could be used efficiently.


In light of 2015 RDA participant feedback to date and the drawbacks associated with

a Flat Rate, at this time BC Hydro does not propose to return to a Flat Rate for

residential customers.

With respect to the CEC suggestion, BC Hydro is unclear whether the optional

efficiency based rate would be in lieu of the RIB rate, or work as an adjunct to the

RIB rate. BC Hydro will be meeting with CEC to further understand this concept.

3 Alternative Means of Delivering the RIB

3.1 RIB Step 2 Pricing and Energy LRMC

BC Hydro requested input on whether a RIB rate pricing principle should constrain

the Step 2 rate to equal LRMC. BC Hydro also asked whether there are compelling

reasons to depart from prior Commission decisions that the LRMC is the appropriate

referent to a Step 2 rate, and if so what the alternative referent would be.


Commission staff remark that one of the most important changes since the

2011 Commission review of the RIB rate13 is the downward revision of the BC Hydro

estimate of LRMC. Staff suggest that it would be useful for BC Hydro to discuss if

the new LRMC should be used as a benchmark for rate design in the context of a

wider range and lower confidence level in the LRMC estimate.

BCOAPO comments that the calculation of LRMC is almost meaningless in B.C. in

light of provincial energy policy that mandates self-sufficiency and requires the

purchase of intermittent power at premium prices and in excess of need. COPE 378

13 Refer to Commission Order No. G-45-11.




Page 21

states that the setting of the Step 2 rate is an academic exercise in that customer

consumption decisions are not based on whether their power is being charged at

Step 1 or Step 2, and thus behaviour will not be shaped by whether Step 2 is strictly

tied to LRMC or not.

BCSEA explains that the pricing of Step 2 in reference to LRMC is a useful way to

describe the appropriate price signal for RIB in the present context. The price signal

should not be constrained by LRMC in principle or as a hard-and-fast rule, but

balanced against other priorities for the RIB rate. BCSEA notes that there appears to

be no urgency to reduce the current Step 2 rate in response to a recently reduced

LRMC, and that such a change could be confusing or counterproductive and

contrary to the intent of prior Commission decisions, particularly if the result were a

Step 2 rate lower than Step 1.

CEC states that the Step 2 rate should not be constrained by LRMC and that

alternatives with higher price signals may be valid options to consider.


BC Hydro does not agree with the Commission staff suggestion that there is less

confidence in the energy LRMC set out in the 2013 Integrated Resource Plan (IRP)

simply because it is a range of $85 per megawatt hour (/MWh) to $100/MWh

($F2013), as opposed to the prior single value based on the weighted average

levelized energy price resulting from a past power acquisition process. BC Hydro

believes this energy LRMC range is appropriate for purposes of rate design, and the

energy LRMC range was used in BC Hydro’s 2013 RIB re-pricing application.

BC Hydro continues to support the concept of setting the last block of energy that

customers consume at the LRMC level because it sends a price signal to BC Hydro

customers that minimizes the overall cost of producing and delivering energy to

consumers.




Page 22

BC Hydro agrees with BCSEA that the pricing of the Step 2 rate in reference to

LRMC should not be regarded as a hard and fast rule. BC Hydro accepts the

BCSEA idea that prior Commission decisions on LRMC as the appropriate reference

for signaling economically efficient use should not be strictly interpreted as a pricing

principle that might, for example, ultimately support a declining block residential rate.

BC Hydro would not propose reducing the current RIB Step 2 rate to precisely match

the upper end of the energy LRMC range for the reasons advanced by BCSEA.

In response to Commission staff feedback at Workshop No. 3, BC Hydro would like

to hear from stakeholders what reasons there are for intentionally setting a RIB

Step 2 or other rate above LRMC. BC Hydro expects to continue this line of

discussion in its exploration of a three-step rate where Step 3 would intentionally be

set above the upper end of the energy LRMC.

3.2 RIB Step 1/Step 2 Threshold

BC Hydro requested input on whether there are compelling reasons to change the

SQ RIB threshold (currently set at 1,350 kWh per two-month billing period, being

more or less 90 per cent of the median consumption of BC Hydro’s residential

customers of about 760 kWh per month) and if so, what additional analysis would

stakeholders recommend (with reasons). BC Hydro also requested input on why

BC Hydro would model very low thresholds (500, 400, other kWh/month) as these

thresholds do not reflect typical residential use.


BCSEA sees no compelling reason to change the SQ RIB threshold, which is

understood and accepted by customers. BCSEA suggests that BC Hydro model

modest changes to the threshold. BCSEA highlights the increased conservation that

is estimated under a higher threshold, which is the outcome of a consequent

increase in the Step 2 rate. BCSEA generally supports the idea of exposing more,

rather than fewer, customers to the Step 2 rate. BCSEA does not propose that




Page 23

BC Hydro model very low thresholds for a two-step rate, although BCSEA is open to

hearing from other stakeholders on how a very low threshold might be considered

within a ‘lifeline rate’ concept.

BCOAPO suggests that lowering the SQ RIB threshold to 600 kWh per month may

encourage more conservation by exposing more customers to the Step 2 price

during winter months. CEC remarks that alternative thresholds should be examined

if they improve conservation and efficiency, and very low thresholds could be

appropriate if they reflect efficient use living and not typical use.


BC Hydro modelled a range of both increases and decreases to the SQ RIB

threshold. As reviewed at Workshop No. 3, the bill and conservation impacts of

changing the threshold vary by the exposure of customers to the Step 1 rate (which

is held constant) and by the consequent increase or decrease to the Step 2 rate (to

maintain revenue neutrality):

• Exposing more customers to the Step 2 rate through even a moderate

decrease in the threshold has the effect of imposing higher than SQ bill impacts

on nearly all typical customers, with no substantive change in conservation

overall. Alternatively, residually calculating the Step 1 rate while keeping the

Step 2 rate constant would subject a number of typical customers to bill impacts

higher than the RR (SQ), but with no substantive change in net conservation.

• Increasing the threshold would result in an increase in conservation – a direct

result of increasing the Step 2 rate to maintain class revenue neutrality – but

would impose a wide range of bill impacts across customer types. A moderate

increase to the threshold results in lower bill impacts to typical customers and

higher bill impacts to higher than average users.

BC Hydro proposes to undertake no further modelling of alternative RIB thresholds.

Moving the threshold results in no substantive changes from SQ RIB conservation




Page 24

forecasts within the scope modeled, given a maximum bill impact constraint of

10 per cent. BC Hydro agrees with BCSEA that there is no apparent problem with

the current threshold, and generally that the SQ RIB design has the advantage of

customer understanding and acceptance.

3.3 Basic and Minimum Charges

BC Hydro reviewed the performance of alternative Basic and Minimum Charges to

recover fixed distribution and customer care costs from residential customers.

BC Hydro sought input on whether the amount of such costs recovered through the

Basic Charge should be increased toward cost-based, or decreased, and what

additional analysis, if any, would stakeholders recommend (with reasons). BC Hydro

proposed that no further modeling was required for 100 per cent fixed cost recovery

through a Basic Charge or for eliminating all forms of fixed charges. BC Hydro also

sought input on whether the Minimum Charge should be decoupled from the Basic

Charge, including in relation to whether the Basic Charge should be changed.


BCOAPO seeks a common understanding of the purpose of the Basic Charge.

BCOAPO is of the view that the Basic Charge is regressive and opposes any

proposal to increase the charge. BCOAPO suggests that BC Hydro consider a

charge that is based on the amperage at which customers take service (for example,

200 amps versus 400 amps). BCOAPO agrees with the concept of decoupling the

Minimum Charge from the Basic Charge.

BCSEA opposes any change to the Basic Charge, noting that the current charge is

accepted by customers and any change would produce little or no additional

conservation. BCSEA sees no reason to decouple the Minimum Charge from the

Basic Charge, which is currently accepted by customers and does not conflict with

the RIB conservation signal.




Page 25

CEC states that BC Hydro should not need to look at eliminating all forms of fixed

charge. CEC advances that BC Hydro should consider an “Access Charge” that

combines elements of the Basic Charge and Minimum Charge.

Commission staff acknowledge that the current Basic Charge distorts the fair cost

recovery within a class, and question if higher fixed charges would adversely affect

low income customers. Staff request that BC Hydro provide its rationale for the Basic

Charge it would propose.


As discussed at Workshop No. 3, BC Hydro considers that the purpose of the Basic

Charge is to recover a portion of BC Hydro’s fixed distribution and customer care

costs through a fixed charge, consistent with underlying cost causation, since such

costs do not vary with usage. The current Basic Charge is 16.64¢ per day, resulting

in about 30 per cent recovery of customer-related fixed costs assigned to the

Residential class. At Workshop No. 3 BC Hydro noted that for utilities surveyed

customer-related fixed cost recovery ranges from 22 per cent-100 per cent, with

most utilities in the 35 per cent-65 per cent range.

BC Hydro does not favour eliminating all forms of fixed charges; utilities generally

have a fixed charge in addition to a volume-based energy charge. Nor does

BC Hydro favour increasing fixed charges to recover 100 per cent of costs due to the

very high bill impacts imposed on some customers. BC Hydro shares BCOAPO’s

concern with increasing the amount of cost recovery through the Basic Charge due

to the impact on low consuming customers, including apartments and some low

income customers.

BC Hydro notes that either changing the amount of cost recovery through a Basic

Charge or decoupling a Minimum Charge from the Basic Charge will not necessarily

alter the exposure of customers to the RIB rate, nor the conservation outcome, if the

effect is to not change the Step 2 rate.




Page 26

BC Hydro considers that a separate Minimum Charge may be warranted to reflect

the cost of customers remaining connected to the system during periods of very low

consumption or dormancy. BC Hydro notes that some additional cost recovery

through a separate Minimum Charge may benefit lower consuming customers,

including some low income customers, given that the charge would allow for a

consequent lowering of the Step 1 rate. A $15 per month Minimum Charge roughly

equates to the average fixed cost per month for BC Hydro to keep a customer

connected to the system. BC Hydro plans to model this Minimum Charge design in

detail coincident with the SQ Basic Charge for the period F2017 to F2019. The

detailed results of this design will be presented at the proposed February 2015

workshop. BC Hydro proposes to present the results of one additional model, a $15

Minimum Charge and no Basic Charge, under the same comparative F2016

assumptions as for the suite of options considered at Workshop No. 3.

With respect to rates based on amperage, BC Hydro notes that new residential

service is charged a one-time fixed fee to recover the connection costs associated

with service type and size. BC Hydro questions the practicality of an ongoing charge

for service on the basis of amperage given that the fixed costs of residential service,

such as those associated with meters, secondary wires and customer care, do not

materially vary by service type and size. BC Hydro’s billing system does not record

the amperage of its residential customers, and thus there is an implementation

challenge to segment the residential class, determine cost-based rates and develop

appropriate billing system support.

4 Other Residential Rate Issues

4.1 LRMC for RIB Ratemaking – Capacity Value

The question of whether the LRMC for RIB ratemaking should include a capacity

value was raised by a participant in the Streamlined Review Process to consider

BC Hydro’s 2013 RIB re-pricing application. BC Hydro brought this issue forward for




Page 27

RDA engagement at Workshop No. 1. BC Hydro proposed at that time that the

LRMC for RIB rate-making not include capacity value, and it was on this basis that it

proceeded with rate design modeling to support Workshop No. 3.

At Workshop No. 3, BC Hydro again proposed that the LRMC for RIB rate-making

not include a capacity value to be added to the energy LRMC, but sought

stakeholder’s views on the concept. BC Hydro indicated that including a capacity

value based on the Unit Capacity Cost of $50/kW-year to $55/kW-year for

Revelstoke Unit 6, the next most cost-effective generating capacity resource

addition, would increase the energy LRMC by about $11/MWh ($F2013).14


BCSEA, CEC and BCOAPO submit that the LRMC for RIB should include a capacity

value because the RIB delivers associated capacity savings.


For clarity, the energy LRMC range of $85/MWh to $100/MWh ($F2013) identified in

BC Hydro’s 2013 IRP is for annual firm energy and does not include avoided

generation capacity costs.

It is the case that RIB-related energy savings deliver associated capacity savings.

BC Hydro recognizes this by including the RIB’s associated capacity savings in its

resource stack. In addition, when measuring the cost-effectiveness of the RIB (and

other DSM initiatives), BC Hydro uses the Total Resource Cost test which accounts

for all avoided costs, including generation capacity resource costs. BC Hydro notes

that FortisBC in its 2015/2016 Demand Side Management (DSM) filing used a

LRMC of $99/MWh for firm energy, which FortisBC states is inclusive of generation

capacity with no need for adjustment to capture avoided generation capacity costs.

FortisBC included a capacity estimate of $35.60/kW-year as a proxy to represent the

14 Based on a residential load factor of 53 per cent used for BC Hydro’s residential DSM programs.




Page 28

value of avoided transmission and distribution capital expenditures due to DSM

program energy conservation to arrive at an overall LRMC $112/MWh figure.15

In BC Hydro’s view, adding such a capacity value to signal these savings could

confuse the pricing of the RIB with its purpose, that being energy conservation not

peak capacity reduction. The RIB rate is an energy conservation rate, and it is not

clear how residential customers would respond to a price signal incorporating a

generation capacity value from a timing perspective (i.e., will residential customers

actually respond during peak demand time periods?).

The Commission has stated that the RIB Step 2 rate should be based on a “price

signal for customers to understand what is happening to the cost of energy they will

consume in the future”16 [emphasis added]. Use of BC Hydro’s energy LRMC for

energy conservation rate structures such as the RIB is consistent with past

Commission decisions:

• In its 2008 RIB decision, the Commission used the levelized weighted average

plant-gate price of $82.7/MWh based on BC Hydro’s F2006 Open Call for

tenders as a proxy for LRMC rate setting purposes.17 The F2006 Call levelized

weighted average plant-gate price is an energy price that does not contain the

avoided cost of generation capacity.

• In its 2011 RIB re-pricing decision, the Commission used the levelized weighted

average plant-gate price of $111.1/MWh based on BC Hydro’s 2009 Clean

Power Call, the most recent power acquisition process at the time, as a proxy

for LRMC rate setting purposes.18 The 2009 Clean Power Call levelized

15 As noted by BCOAPO and CEC in their final submissions concerning the FortisBC 2015/2016 DSM

expenditure proceeding; http://www.bcuc.com/ApplicationView.aspx?ApplicationId=451. 16 Commission Order No. G-45-11 dated March 14, 2011, Reasons for Decision, Appendix A, page 3 of 19. 17 In the Matter of British Columbia Hydro and Power Authority: Residential Inclining Block Rate Application,

Reasons for Decision to Order No. G-124-08 dated September 24, 2008, pages 107 to 108. 18 Supra, note 15.

http://www.bcuc.com/ApplicationView.aspx?ApplicationId=451




Page 29

weighted average plant-gate price is an energy price that does not contain the

avoided cost of generation capacity.

4.2 Residential Voluntary TOU Rate

At the first RDA workshop, BC Hydro proposed that mandatory TOU for residential

customers was out of scope for purposes of putting together its 2015 RDA on the

basis that the B.C. Government has confirmed to BC Hydro that a mandatory TOU

for residential customers is not an option that BC Hydro can pursue. Commission

staff asked if a voluntary TOU rate for residential customers was in scope. BC Hydro

committed to liaising with the B.C. Government, and to review the pros and cons of

pursuing a voluntary TOU rate for residential customers at the June 25, 2014

workshop. The B.C. Government subsequently confirmed that voluntary TOU for

residential customers could be explored by BC Hydro.

At Workshop No. 3, BC Hydro presented it views on the pros and cons of pursuing a

voluntary TOU rate for residential customers, and solicited participant input as to

whether BC Hydro should pursue a voluntary TOU rate for residential customers.


Most participants oppose BC Hydro pursuing a voluntary residential TOU rate:

• BCOAPO opposes a voluntary TOU for residential customers, stating that

“[TOU] rates are unlikely to benefit low-income ratepayers”

• COPE 378 opposes a voluntary TOU: “A voluntary program encourages

self-selection, creating a situation where free-riders (those who would otherwise

be incented to conserve or those few who have the ability to shape their use

beyond the ability of the majority of ratepayers to take advantage of the lowest

rate) will be receiving a subsidy from the majority of ratepayers who cannot

modify their usage and who do not have the time to determine how best to




Page 30

shape their usage patterns”. COPE 378 noted that a voluntary TOU does not

incent energy conservation and is likely to result in minimal capacity savings

• BCSEA stated: “our view is that mandatory time of use rates should be

considered. Voluntary residential [TOU] rates would have minimal benefits”.

Only CEC favours examining a voluntary TOU rate for residential customers.

Commission staff requested more jurisdictional information, particularly on

hydro-based utilities that have implemented residential TOU rates.


Given the shortcomings of a residential voluntary TOU, and in light of 2015 RDA

participant feed-back to date, at this time BC Hydro does not propose to pursue a

voluntary TOU for residential customers.

As part of reviewing a voluntary TOU for residential customers, BC Hydro

researched other jurisdictions. While many North American jurisdictions have

voluntary TOU rates for the residential sector, these are mainly U.S. utilities with

only a minority of Canadian utilities offering voluntary residential TOU rates. With

respect to Canadian electric utilities with hydro-based systems, BC Hydro

understands that Hydro Quebec’s voluntary residential TOU pilot ended in

March 2010. Manitoba Hydro does not offer voluntary time varying rates to its

residential customers. BC Hydro also advises that: SaskPower does not offer

voluntary time varying rates to its residential customers; Nova Scotia Power’s

voluntary TOU rate for residential customers is restricted to certain end uses

(residential customers must have electric-based heating systems that have capacity

to store heat, and timing and controls in place approved by Nova Scotia Power); and

Ontario’s residential TOU rate is mandatory.

BC Hydro did not base its analysis of the pros and cons of a voluntary TOU for its

residential customers solely on its review of other jurisdictions. BC Hydro has

concerns about the transferability of findings from different utilities, users and




Page 31

climates, and the fact that research in the area tends to show an inconsistent and

wide range of values with respect to the true effectiveness of peak-load pricing.

BC Hydro agrees with COPE 378’s concerns over the self-selection effects that are

present with a voluntary TOU rate, and in particular that if ‘structural winners’ with

favorable load shapes choose a voluntary residential TOU rate, there would be a

cost shift to other residential customers. Another issue is the low margins (the

differential between on-peak and off-peak pricing) that would be associated with a

TOU rate in BC Hydro’s service area. BC Hydro notes the Industrial Electricity Policy

Review task force’s questioning of how an industrial TOU in B.C. with its small

differential between on-peak and off-peak pricing could lead to significant peak

shaving,19 and BC Hydro believes this is even more questionable in the context of a

voluntary TOU rate for residential customers. Studies have generally found that

voluntary residential TOU participation rates are low – Hydro Quebec in a

2007 submission to its regulator quotes an Electric Power Research Institute study

that found that participation rates can be as low as 5 per cent if customers are not

informed and there are costs to transact;20 a U.S. Department of Energy study

compiled customer enrollment patterns in TOU rate programs and found that about

11 per cent of customers voluntarily opted-in.21 In addition, BC Hydro is concerned

that a voluntary TOU rate overlaid on to the RIB would undermine the simple

message associated with the RIB (‘if you consume more, you pay more’) making it

harder to achieve BC Hydro’s aggressive DSM target.

BC Hydro does not believe that a voluntary TOU for residential customers is a

resource that it could plan to rely on for purposes of deferring capacity generation.

19 IEPR Task Force, “Industrial Time of Use (TOU) Rates”;

http://www.empr.gov.bc.ca/EPD/Documents/Task%20Force%20Issue%20Paper%20-%20Time%20of%20Use%20Rates%20FINAL.pdf.

20 Hydro Quebec’s Proposal Regarding Time-Season Ratemaking, Application R-3644-2007, page 27 of 55. 21 “Analysis of Customers’ Enrollment Pattern in Time-based Rate Programs – Initial Results from the SGIC

Consumer Behaviour Studies”, published by U.S. Department of Energy in July 2013.

http://www.empr.gov.bc.ca/EPD/Documents/Task%20Force%20Issue%20Paper%20-%20Time%20of%20Use%20Rates%20FINAL.pdf

http://www.empr.gov.bc.ca/EPD/Documents/Task%20Force%20Issue%20Paper%20-%20Time%20of%20Use%20Rates%20FINAL.pdf




Page 32

BC Hydro foresees no reliability benefits. Voluntary residential TOU rates do not in

any way provide ‘dispatchable’ demand response.

4.3 In-Depth Rate Modelling & Other Items in Follow-up

Based on the assessment and modeling of RIB rate alternatives reviewed to date

and the feedback summarized above, BC Hydro will perform in-depth rate modelling

of the following alternatives for review at the next residential RDA workshop, to be

scheduled for February 2015:

1. SQ RIB Rate and SQ Basic Charge

2. SQ RIB Rate and SQ Basic Charge and Minimum Charge of $15/month

3. Three-Step Rate as set out in Workshop No. 3

4. Three-Step Rate as suggested by BCOAPO.

In-depth modelling will determine rates for the period F2017 to F2019 and estimate

the cumulative conservation difference between each of the rate alternatives and the

SQ for each year. Annual and cumulative bill impacts will be reviewed, along with bill

impact distributions and charts illustrating better-off or worse-off customers.

BC Hydro will also review at the February 2015 residential workshop the following

items raised in the written comments received:

1. The performance of the SQ RIB rate against the Bonbright criteria (Commission

staff)

2. The energy conservation role of the RIB rate in relation to other energy

conservation activities, particularly DSM programs and codes and standards

(BCSEA)

3. Information on BC Hydro’s low income DSM programs and conservation

potential (Commission staff, BCOAPO, COPE 378). This will include




Page 33

information on the July 2014 changes to the Demand-Side Measures

Regulation which raised the low income program eligibility threshold

4. The bill impact test - its purpose and level and the applicable customer

percentile threshold (Commission staff, COPE 378).

Based on Commission staff and other participant comments, BC Hydro is scheduling

an information session in late November 2014 to review its Residential End Use

Survey methodology.


June 25, 2014 Workshop No. 3 Electric Tariff Terms and Conditions, Residential

Inclining Block Rate


Attachment 1

Workshop No. 3 Summary Notes

BC Hydro Rate Design Workshop – Residential Inclining Block and

other Potential Residential Rate Design Issues

SUMMARY 25 JUNE 2014 9AM AM TO 2:30 P.M. BCUC Hearing Room

1125 Howe St., Vancouver

TYPE OF MEETING RDA Workshop No. 3 - Electric Tariff - Terms and Conditions (T&C), Residential inclining Block (RIB) and other potential residential rate issues

FACILITATOR Anne Wilson, BC Hydro

PARTICIPANTS

Association of Major Power Customers of British Columbia (AMPC), British Columbia Old Age Pensioners Organization (BCOAPO, formerly referred to as Pensioners’ and Senior’s Organization), BC Sustainable Energy Association and Sierra Club of Canada, BC Chapter (BCSEA), British Columbia Utilities Commission (BCUC) staff, Commercial Energy Consumers Association of British Columbia (CEC), City of New Westminster, Canadian Office and Professional Employees Local Union 378 (COPE 378), FortisBC, Weisberg Law Corporation.

BC HYDRO ATTENDEES

Jane Christensen, Daren Sanders, Gordon Doyle, Craig Godsoe, Rob Gorter, Bryan Hobkirk, Paulus Mau, Cindy Verschoor, Jeff Christian (external counsel).

AGENDA

1. Welcome & Introductions including review of draft agenda 2. Electric Tariff - T&C 3. RIB and other potential residential rate issues

MEETING MINUTES

ABBREVIATIONS

AMPC……Association of Major Power Consumers of British Columbia BCSEA…..BC Sustainable Energy Association and Sierra Club of Canada (B.C. Chapter) BCOAPO…British Columbia Old Age Pensioners Organization CEC……….Commercial Energy Consumers Association of British Columbia COPE 378…Canadian Office and Professional Employees Local Union 378 RDA……..Rate Design Application BCH ...... BC Hydro COS………Cost of Service DSM ...... Demand Side Management kWh…….kilowatt hour GWh…….Gigawatt hour

BCUC……BC Utilities Commission IRP……….Integrated Resource Plan LRMC……Long Run Marginal Cost REUS…….Residential End-Use Survey RIB……….Residential Inclining Block RDR………Remote Disconnection/Reconnection T&C………Terms and Conditions TOU……..Time of Use

1. Welcome and Introduct ions

Anne Wilson opened the meeting and emphasized two ways for stakeholders to provide feedback: (1) comments and questions at the workshop itself; and (2) written comments through the feed-back form or otherwise after Workshop No.3, within a 45 day comment period starting with the posting of Workshop No. 3 notes [Note – Workshop No. 3 notes were posted to the BCH 2015 RDA website on 15 July 2014].

2 . P resentat ion: Elect r ic Tar iff - Terms and Condit ions

Attachment 1

2015 Rate Design Application June 25, 2014 Workshop No. 3

Electric Tariff Terms and Conditions, Residential Inclining Block Rate BC Hydro Summary and Consideration of Participant Feedback

Page 1 of 9





Jane Christensen - discussed potential updates to Electric Tariff T&C including standard charges (sections 6 and 11 of Electric Tariff); and noted that section 8 of the Electric Tariff T&C, which deals with distribution extension, would be discussed in a later workshop. Daren Sanders – discussed minimum reconnection charges and how the reconnection process and cost drivers of the reconnection process have undergone a fundamental change with the introduction of smart meters.

FEEDBACK RESPONSE

1. COPE 378 What type of customer/dwelling would have a bi-monthly bill less than $30?

BC Hydro does not apply late payment charge to accounts under $30 (section 6.2 of Electric Tariff). Should BCH maintain the $30 threshold or remove it? BCH has not done analysis to determine which customers have bills less than $30. BCH will address this issue in more detail in the planned January 2015 RIB workshop.

2. BCOAPO

Slide 6: In the last RDA FortisBC suggested that extension charges should vary depending on level of service (i.e. 100 vs. 200 amp)

BCH will be looking into varying extension charges on the basis of level of service taken. This will be discussed at the distribution extension workshop in the fall.

3. BCUC

Slide 8: People with summer residences who disconnect from system for majority of year. Is BC Hydro considering charging the minimum charge at time of reconnection?

If the reconnection is within one year of the disconnection, BCH charges the greater of the reconnection charge or the sum of the basic charge (which equals minimum charge), applied for all months during the period of disconnection (section 2.6 of Electric Tariff).

4. BCUC

Slide 9: Was the $60 million investment for remote disconnect/reconnect (RDR) functionality primarily a manufacturers cost or an internal BC Hydro cost?

The cost was primarily a manufacturers cost along with BCH Information Technology investment.

5. COPE 378

Slide 10: Costs for RDR should be recovered from all customers not just in reconnection charge. All customer meters have this functionality and benefit from RDR. Have not seen examples where metering costs have been deconstructed and assigned to different customers. Costs should not be shifted to the reconnection charge as it will impact primarily low-income customers.

BCH presented four scenarios on slide #10 and is requesting feed-back. The issue is whether there are significant system benefits to disconnecting such that costs should be spread across the customer base.

6. BCSEA

Would like to understand BCH’s principles for assigning costs to the reconnection charge.

The principles BCH will be using to evaluate reconnection charge (section 6.7 of Electric Tariff) options are the Bonbright criteria. At this time BC Hydro is seeking customer stakeholder input on how and why certain allocations could be made. BCH will develop a proposal with a description of the Bonbright criteria applied after taking into consideration stakeholder feedback.

7. BCOAPO At this time it’s predominately used for non-payment.

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Is RDR solely for disconnection and reconnection?

8. BCUC

Are there cost of service (COS) implications associated with the allocation of costs to the reconnection charge?

Costs assigned to the reconnection charge would be directly assigned. BCH will address this at the October 7, 2014 COS workshop.

9. BCUC

Current disconnection charge does not include any meter related charges – just labour and vehicles. The reconnection charge does not need to be punitive as the reconnection charge already allows BCH to bill the minimum charge for the period of disconnection.

BCH is concerned that if the reconnection charge is too low that there may not be an appropriate disincentive to not paying the bill. Additionally if BCH has to undertake a manual disconnection or reconnection, the charge may not recover the costs.

10. COPE 378

Disconnection of electric service is in itself a significant deterrent and carries a large burden to low income customers trying to reconnect.

Refer to BCH’s response to BCUC above.

11. BCSEA

What would be included in reconnection charge if BCH only looked at incremental costs?

Scenario 4 set out on slide 10 is the closest to an incremental approach.

12. CEC

Slide 11: To what degree are BCH overheads included in the miscellaneous charges? Are processing costs included in the returned cheque charge?

The bank charge is a flow-through. BCH will look at whether BCH’s processing costs should be included in the returned cheque charge (section 6.3 of Electric Tariff).

More generally, BCH acknowledges the distinction between incremental and fixed cost recovery in going forward discussions regarding charges.

13. BCOAPO

1.5% per month late payment charge is punitive in today’s low interest environment and should not increase further.

BCH will undertake jurisdictional review and consider BCOAPO’s comment (section 6.2 of Electric Tariff).

14. BCSEA

Principles for cost basis of miscellaneous charges should be understood (cost recovery vs. deterrent).

BCH is reviewing the cost basis of the miscellaneous charges. In most cases cost recovery is appropriate. However, for some charges there may be an element of the charge acting as a deterrent.

15. BCSEA

Slide 13/14: Why would a Non-Payment Report Charge be necessary? Customers would pay the reconnection charge each time they were reconnected to the system.

BCH is concerned that if the reconnection charge is too low there would be little deterrent to reporting payments that are not received; reconnection charge may not be sufficient if manual reconnect is required.

16. BCOAPO Typically BCH will see reported payment within 2-3 days of the customer making the payment. Occasionally there are

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What is the time between payment and it showing up in BCH’s system?

delays in the system (which BCH is made aware of) but non-receipt of a payment is typically attributable to customers not actually making the payment.

17. BCUC

Slide 15 – Is it typical for electric utilities to recover credit card fees from all ratepayers?

It is not common for electric utilities to recover fees from all ratepayers. However, BCH offers pre-authorized bank account debit.

18. COPE 378

If there is an Electric Tariff provision that provides for gross-up of credit card payments to account for BCH’s incremental costs, then it is authorized by law and would trump VISA-BCH agreement.

BCH to consider whether this is correct.

3 . P resentat ion: RIB and other potential residential rate issues - Overview

Rob Gorter provided responses to feedback received from the May 8th workshop (refer to slides 19 and 20), including the use of the eight Bonbright criteria set out in the 1961 text, purpose of the Residential Basic and Minimum Charge, and a voluntary Time-of-Use rate (TOU) for Residential customers. Paulus Mau walked through an overview of Residential customer characteristics and the Residential End Use Survey (REUS).

FEEDBACK RESPONSE

1. BCOAPO

Slide 19/29 – Is the Long-Run Marginal Cost (LRMC) value pf 11.01cents/kWh real?

Is the LRMC used for RIB Step 2 consistent with Large General Service, Medium General Service and Transmission Service Rate Schedule 1823?

The 11.01 cents/kWh is in $F2016, which is equivalent to the upper bound of the LRMC at 10 cents/kWh in $F2013 (real) prices. The inflation assumptions and equations used to arrive at $11.01 cents per kWh are set out on slide 29. The underlying principle is the same, which is to expose customers to marginal costs. The vintage of the resources used to set LRMC differ given the different implementation timing of these conservation rate structures. Refer to the 8 May 2014 Workshop No. 1 slide deck [Note –slide 13 of the 8 May Introductory workshop slide deck]

2. BCSEA

Slides 21-28 – For the REUS how are residences with multiple units behind a single meter captured?

Surveys are sent BCH customers. Therefore, in cases where the landlord is the customer paying the BCH electricity bill, the landlord would be sent a survey, not the individual tenants. If tenants pay the BCH electricity bills they are sent a survey.

3. BCOAPO

Slides 21-28 – Are participants self-selected or statistically chosen?

The REUS is sent to a random sample of residential customers. Participation (completing the survey) is voluntary.

4. COPE 378

Slide 26 – COPE 378 requests that BCH file the REUS methodology as part of the 2015 RDA.

Low income is less likely to respond to surveys such as the REUS, and there is also the stigma

BCH will post the REUS methodology on its 2015 RDA website, and if there is interest, BCH can hold a smaller meeting to walk through the REUS methodology.

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attaching to self-identifying as low income. Low income may form more than 10% of BCH’s residential customers.

5. BCOAPO

What was used to define low income?

For statistical analysis, BC Hydro uses Statistics Canada low income cut-off (LICO) criteria to flag customers in its REUS as to whether or not they are likely low income qualified. The LICO rate is defined as the percentage of families or households which fall below a low income threshold – that being, an income level whereby a family is spending a larger share of its total income on the necessities of food, shelter and clothing than does an average family in an appropriate comparison group (the lower a household’s income, a greater percentage of the total is tied to the necessities of living).

6. BCOAPO

Slide 21-28 – Very large consumers such as farms and common areas for condominiums tend to skew the results higher.

Farms and apartment ‘common use areas’ are excluded from the REUS. In any event, use of the median tends to avoid any bias.

4 . P resentat ion: Alternatives to the RIB

Rob Gorter and Paulus Mau walked through modelling results for alternative rate designs to the RIB:

• Three Step Rate • Seasonal Rate • Customer Specific Baseline Rate • Flat Rate.

Each of the alternatives was compared against the RIB with respect to Economic Efficiency, Fairness, Practicality and Stability.

FEEDBACK RESPONSE

3 Step Rate (Slides 32-36)

1. COPE 378

Would like to see a 3 Step rate where the 3rd step is a glutinous consumption rate priced very high, with the revenue collected from the 3rd step allocated to fund a lifeline Step 1 rate.

Elasticity diminishes as income rises and COPE 378 urges BCH to consider this in rate making.

BCH will model such a rate. BCH would like COPE 378 and other stakeholders’ comments on how such a rate aligns with Bonbright criteria such as fairness (cost causation) and efficiency. In particular, what is the basis upon which a very high rate for ‘large customers’ might be increased, and then ultimately determined?

It is not possible to model and/or apply changes in elasticity in relation to income levels as BCH does not collect income data on its customers when they open an account.

2. CEC

What problem would a 3 Step rate be trying to address? CEC emphasized fairness, which it tied to complaints about the RIB.

BCH modeled the 3 Step rate, as it was raised in the 2008 RIB proceeding. Refer to slide 32 for the various rationales put forward in the BCUC 2008 RIB proceeding for a 3 step rate.

BCH uses the term fairness as described by Bonbright in his 1961 text, referring to cost causation. Complaints are associated with customer acceptance, a separate Bonbright

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criterion; refer to slide 20.

3. COPE 378

Difficult to demonstrate impact of inclining block rate due to recent rate increases. If RIB is working properly there should be an impact on load.

The 2013 RIB Evaluation report demonstrates that the RIB has resulted in cumulative energy savings of between 195 GWh and 444 GWh for the period 2008-2012.

4. BCSEA

Is BCH assuming that the LRMC of $85-100 is constant?

Yes. The 2013 Integrated Resource Plan (IRP) identifies the energy LRMC as $85-100, and the primary resources used to fill the gap are Demand Side Management (DSM) and independent power producer electricity purchase agreement renewals. BCH will be doing an IRP update in fall of 2015.

5. BCOAPO

Do any utilities have an inclining block rate that includes a very low step 1 price (e.g., 5 cents/kWh) to cover essentials?

Yukon Energy is the only Canadian jurisdiction with a 3 step rate. BCH will examine if Yukon Energy’s step 3 rate is set at LRMC.

BCH is not aware of a Canadian utility that has a very low step 1 rate that is designed to cover essentials.

[Note: California sets aside a minimum electricity allowance for all residential customers, called a baseline allowance. Pursuant to California law, the baseline allowance represents the electricity necessary to supply a significant portion (50-60%) of the reasonable needs of the average residential customer]

6. COPE 378

Would like to see additional 3 step rate modeling that includes changes to the first step threshold; revenue gained under step 3 should go to low income.

Will suggest alternatives to the 10% bill impact to the single most adversely impacted customer.

COPE 378 also suggests including information on low income DSM programs.

See BCH’s response above that it is open to modelling additional variations of a 3 step rate.

BCH modelled the 3 step rate using the 2013 RIB proceeding measurement of limiting bill impacts to 10% for the single most adversely impacted customer.

BCH is interested in hearing from stakeholders on alternatives for the measure of bill impacts. BCSEA has suggested an alternative is to measure bill impact on the 95th percentile customer as opposed to the single most adversely impacted customer. BCH agrees that modelling bill impacts around the 95th to 98th percentile by consumption is reasonable.

BCH agrees that information on its low income DSM programs is in scope for context, and will provide this information as part of its next RIB workshop, expected for January 2015.

7. BCUC

Interested in knowing what the rate impacts would be if the top 5% of customers were excluded from the bill impact threshold; in other words, that the Step 3 rate be set based on a 10% bill impact to

BCH expects that the Step 2/Step 3 threshold would increase, and the Step 3 rate would increase, all other things being equal.

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the 95th percentile customer.

8. BCUC

Expressed a concern about incentives if the Step 1 rate is set very low.

9. COPE 378

Questioned BCH’s assessment that a 3 step rate would be less understandable than the current two step rate.

Experience in other jurisdictions demonstrates that there is increased complexity as the number of steps increases. Pacific Gas & Electric in California is seeking to reduce the number of steps in its tiered rates from 4 to 2.

10. BCSEA

Would the removal of the 10% bill impact constraint allow for a higher step 3 rate and greater conservation?

Yes. However, and as noted above, BCH would be interested in hearing what Bonbright criteria would support a very high step 3 rate above LRMC.

Seasonal Rates (slides 37-42)

11. BCSEA

Why did BCH relax the 10% bill impact constraint for modelling seasonal rates?

Even with the 10% bill impact constraint relaxed there is very little change to customer bills when comparing seasonal to the RIB.

Imposing the 10% constraint would make the modelling of the Seasonal rate very complicated. Agreed. This raises the question of why BCH would pursue a seasonal rate as an alternative to RIB.

12. CEC

There is a fairness issue. Rates should reflect cost causation.

The seasonal rate as modelled was proposed in the 2008 RIB proceeding and does not reflect cost causation.

5. P resentat ion: Alternative Means of Delivering the RIB; LRMC; Voluntary TOU for Residential; Lifeline Rate

Rob Gorter and Paulus Mau walked through modelling results for alternative means of delivering the RIB that were identified in prior BCUC proceedings:

• Step 2 Rate = LRMC • Step 1 / Step 2 Threshold alternatives • Basic Charge and Minimum Charge Alternatives.

Each of the alternatives was compared against the RIB with respect to Economic Efficiency, Fairness, Practicality and Stability. Rob Gorter also followed up on the issue of whether the energy LRMC should include a capacity value, which was raised at the 8 May 2014 Workshop No. 1; voluntary TOU for residential customers; and Lifeline rates.

FEEDBACK RESPONSE

1. BCUC

Slide 54 - Limiting the Step 2 rate to LRMC will reduce conservation, and with Revenue Requirement increases, will likely result in a flat

Setting the Step 2 rate at LRMC would satisfy the Bonbright efficiency criteria; however, bill impact and rate stability are also important considerations. BCH used F2016 as the year for modelling for this

Attachment 1



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rate regardless of intent. Thus pricing principles even under the status quo RIB are important elements of the rate design discussion.

There should be good reasons behind having a Step 2 rate that exceeds LRMC.

workshop. BCH will model future years for the next RIB workshop, which will likely be in January 2015. BCH agrees that pricing principles are and important element of rate design. BCH would like to hear from stakeholders what the good reasons are for intentionally setting the Step 2 rate above LRMC.

2. BCUC

What is the elasticity response of customers at Step 1 and Step 2?

Questioned whether if a customer sees a Step 2 rate, is their elasticity assumed to be -0.1?

This information is contained in the RIB evaluation report submitted as part of the 2013 RIB re-pricing application. BCH has 8 years of empirical data supporting a step 2 elasticity of -0.1. The step 1 elasticity is -0.05, but it is difficult to measure given that the Step 1 rate has remained essentially flat for the 8 year period that was evaluated. BCH will post a copy of its RIB evaluation report to its 2015 RDA website.

Generally, yes, as estimated on a monthly basis. Conservation modelling is done in aggregate, using calendarized monthly customer billing data. The consumption that is subjected to the elasticity of -0.1 for each month is computed by summing up the monthly consumption for customers who have been charged the step 2 rate for each respective month.

3. BCUC

Slide 59 - When looking at the different thresholds did BCH remove the outliers as was done in the 2008 RIB?

Yes.

4. BCUC

Slide 63 – The 758 kWh threshold appears to impact larger consuming customers but reduces the exposure to the Step 2 rate for the bulk of customers. What are the conservation impacts?

As seen on slide 60 there is an increase of 54 GWh in conservation as a result of the increased threshold. This is a result of the higher Step 2 rate that larger consumers are exposed to.

5.

6.

BCUC

Slide 67 - The introduction of a Minimum Charge has a high impact on low consuming customers. Customers may try to game it by cancelling service and reconnecting later. Minimum Charge should be looked at with Reconnection Charge.

The Basic Charge is the Minimum Charge for Residential service presently. If the reconnection is within one year of the disconnection, the Minimum Charge would be the greater of the Reconnection Charge or the sum of the Basic Charges, applied for all months during the period of disconnection.

7. BCOAPO

BCH should examine a Minimum Charge based on service size.

BCH will do this for the next RIB workshop, likely to be January 2015.

8. BCSEA

Slide 82 - Would like to see greater justification of adding a capacity value to the LRMC.

BCH committed to review this issue as it was raised in the 2013 RIB Re-pricing application by an intervener, but it is not seeking to justify the idea. Rather, BCH set out its understanding of this issue, and the reasons it proposes to not add a capacity value to the LRMC of energy for RIB

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ratemaking. BCH has yet to hear from the specific intervener that raised this issue, but is interested to hear from stakeholders as to whether, and why this this idea might be justified

9. COPE 378

Questioned whether the addition of a capacity value to the energy LRMC used for RIB step 2 would result in a customer response.

BCH does not believe that there would be a capacity related response by customers.

The effect of adding a capacity value to the LRMC would raise the energy LRMC from $100/MWh to about $112/MWh.

10. BCOAPO

LRMC for capacity should be based on capacity resources and not intermittent resources.

Agreed; The capacity reference is Revelstoke Unit 6 at $50/kW-year to $55/kW-year.

11. BCSEA

Slide 83 - Would like to see a voluntary TOU for Residential. BCSEA would also be interested in jurisdictional and other information on a mandatory TOU for Residential customers.

BCH would be interested as to what benefits a voluntary TOU program could bring. BCH set out in slide 83 that a voluntary TOU for Residential has substantial limitations with few expected benefits.

In the 8 May workshop, BCH set out that it would not examine a mandatory TOU for residential on the basis that such a rate is against BC Government policy. BCH believes it is possible to assess a voluntary TOU for residential without looking at a mandatory TOU for residential.

12. COPE 378

There was a voluntary TOU pilot that may have some findings, such as not much consumption impact. Could BCH make this available?

BC Hydro will consider posting the Voluntary TOU pilot report on the 2015 RDA website.

13.

COPE 378

Slide 84 - COPE 378 will pursue Lifeline rates in the 2015 RDA process.

6. Closing Comments

Anne Wilson thanked everyone for making the time to participate in the workshop, reviewed the ways that feedback can be submitted to BC Hydro, and reiterated that the 45 day written comment period starts with the posting of Workshop # 3 notes [Note – posted on 15July 2014].

BCH will be providing information on anticipated workshops at the beginning of September. A second COS workshop is set for 7 October 2014; BCH anticipates a Distribution and Transmission extension workshop(s) in October; and a Large General Service/Medium General Service rate structure workshop in November. BCH is continuing to meet with customer groups – BCH is meeting with AMPC on load curtailment/interruptible rates on 27 June 2014, for example. Meeting minutes from these meetings will be posted to BCH’s 2015 RDA website.

Meeting adjourned at 2:30 p.m.

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Attachment 2

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Bo

nb

righ

t p

rin

cip

les

som

ewh

at c

on

flic

t (e

.g.,

per

fect

co

st c

ausa

tio

n v

ersu

s ad

min

istr

ativ

e si

mp

licit

y), t

he

app

li cat

ion

sh

ou

ld t

ie it

s em

ph

asis

of

som

e B

on

bri

ght

pri

nci

ple

s o

ver

oth

ers

to t

he

circ

um

stan

ces

of

the

uti

lity

(co

st,

Attachment 2



Page 2 of 49

July

31,

20

14 C

om

men

ts f

rom

Co

mm

issi

on

Sta

ff

3

un

der

:

Effi

cien

cy

Fair

nes

s

Pra

ctic

alit

y , a

nd

Sta

bili

ty

po

li cy,

etc

.) a

nd

to

BC

Hyd

ro’s

ob

jec t

ives

.

Slid

es

21

to

2

8

Un

der

stan

din

g re

sid

enti

al

acco

un

ts:

Reg

ion

Dw

ell i

ng

typ

e

Elec

tric

sp

ace

hea

tin

g

Ho

use

ho

ld s

ize

Low

-in

com

e

W

ill B

C H

ydro

be

pro

vid

ing

a d

efin

itio

n o

f ‘e

lect

ric

spac

e h

eati

ng’

? E

.g.,

do

es it

hav

e to

be

100

% s

pac

e h

eate

d b

y el

ectr

ic o

r d

oes

it q

ual

ify

if it

mee

t s a

cer

tain

per

cen

tage

? W

ill

elec

tric

bas

ebo

ard

s in

so

me

roo

ms

in t

he

ho

use

co

nst

itu

te

elec

tric

sp

ace

hea

tin

g fo

r th

at c

ust

om

er a

cco

un

t ? D

oes

BC

H

y dro

hav

e th

e in

form

atio

n o

n h

ow

ho

use

ho

lds

use

ele

ctri

c sp

ace

hea

tin

g?

BC

Hyd

ro in

dic

ated

th

at it

will

po

st it

s R

EUS

met

ho

do

logy

on

it

s 2

01

5 R

DA

we

bsi

te, a

nd

if t

her

e is

inte

rest

, it

can

ho

ld a

sm

alle

r m

eeti

ng

to w

alk

thro

ugh

th

e R

EUS

met

ho

do

logy

. It

w

ou

ld b

e u

sefu

l fo

r H

ydro

to

info

rm w

ork

sho

p p

arti

cip

ants

w

hen

th

e R

EUS

met

ho

do

logy

has

be e

n p

ost

ed

, an

d a

fte

r p

arti

es h

ave

had

a c

han

ce t

o r

evie

w it

, po

ll th

em o

n in

tere

st

in a

wo

rksh

op

. If

th

ere

is t

he

po

ssib

ility

th

at is

sues

su

ch a

s th

e R

EUS

met

ho

do

logy

can

be

larg

ely

exp

lore

d b

efo

re t

he

app

li cat

ion

is f

iled

th

at c

ou

ld s

ave

sub

stan

tial

tim

e an

d e

ffo

rt

du

rin

g th

e p

roce

ed

ing.

A

lso

, BC

H in

dic

ated

th

at lo

w-i

nco

me

dat

a is

no

t b

roke

n o

ut

by

hea

tin

g ty

pe

(it

is b

y h

ou

sin

g ty

pe)

. C

an t

he

low

-in

com

e d

ata

be

dis

aggr

egat

ed b

y h

eati

ng

typ

e, a

nd

if s

o, w

ou

ld t

her

e b

e v a

lue

in d

oin

g so

? In

ord

er t

o a

sses

s w

het

her

th

e cu

rren

t St

ep

1/2

th

resh

old

is

corr

ectl

y d

esig

ned

, will

BC

Hyd

ro in

clu

de

any

com

men

tary

on

h

ow

to

mea

sure

eff

icie

ncy

ben

efit

s an

d f

airn

ess?

As

an

exam

ple

, w

hat

% o

f si

ngl

e fa

mily

ho

mes

in e

ach

of

the

fou

r re

gio

ns

co

nsu

me

tier

2 e

lect

rici

ty o

n 3

or

mo

re b

illin

g p

erio

ds

Attachment 2



Page 3 of 49

July

31,

20

14 C

om

men

ts f

rom

Co

mm

issi

on

Sta

ff

4

(i.e

. 6 m

on

ths)

?

Slid

es

29

to

3

0

Ke

y m

od

ellin

g as

sum

pti

on

s Th

e ke

y as

sum

pti

on

s in

th

e B

C H

y dro

mo

del

are

in

re

lati

on

to

:

Bill

ing

dat

a

Sam

plin

g

Bill

imp

act

con

stra

int

Rev

enu

e n

eutr

alit

y

LRM

C

B

C H

ydro

mo

del

s re

ven

ue

neu

tral

ity

to s

tatu

s q

uo

ta

rget

rev

enu

e o

n

fore

cast

ed

load

an

d a

re

ven

ue

req

uir

emen

t o

f 6

%.

A d

iscu

ssio

n o

n t

he

10

% c

ap a

ssu

mp

tio

n f

or

bill

imp

act

wo

uld

b

e u

sefu

l, e

.g.,

wh

eth

er t

he

1 0%

sh

ou

ld a

lso

incl

ud

e re

ven

ue

req

uir

emen

ts im

pac

t ? O

r w

het

her

10

% m

ay b

e ex

ceed

ed

wh

ere

the

abso

lute

do

llar

valu

e o

f th

e in

crea

se is

ver

y sm

all?

Slid

es

31

to

5

1

Alt

ern

ativ

e D

esig

ns

to t

he

RIB

3-s

tep

rat

e

Seas

on

al r

ate

Cu

sto

mer

sp

ecif

ic

bas

elin

e

Flat

rat

e

BC

Hyd

ro’s

pro

po

sed

ev

alu

ati o

n m

eth

od

s in

clu

de:

Juri

sdic

tio

nal

as

sess

men

t

Mo

del

ling

of

rate

s, b

ill im

pac

ts

and

co

nse

rvat

ion

Mea

sure

d a

g ain

st

Bo

nb

righ

t p

rin

cip

les

Un

der

th

e 3

-ste

p r

ate

des

ign

, a d

iscu

ssio

n o

n t

he

po

ten

tial

n

um

ber

of

cust

om

ers

wit

h b

ill d

ecre

ase

wo

uld

be

use

ful.

Is a

su

bst

anti

al d

eclin

e in

rat

es t

o a

par

ticu

lar

larg

e gr

ou

p w

ith

in a

cl

ass

con

sid

ered

to

be

an a

cce

pta

ble

rat

e d

esig

n?

Is t

he

3 s

t ep

rat

e a

reas

on

able

to

ol t

o e

nco

ura

ge e

ffic

ien

t en

ergy

co

nsu

mp

tio

n g

ive

n t

he

wid

e d

isp

arit

y o

f re

sid

enti

al

usa

ge (

dw

ell i

ng

size

, nu

mb

er o

f o

ccu

pan

ts) ?

Pro

v id

ing

info

rmat

ion

on

juri

sdic

tio

ns

wit

h 3

(o

r m

ore

) ti

er r

ates

an

d

thei

r si

mila

riti

es a

nd

dif

fere

nce

s w

ith

BC

Hyd

ro w

ill b

e u

sefu

l.

It w

ill b

e u

sefu

l to

dis

cuss

wh

eth

er B

C H

ydro

has

th

e p

eaki

ng

char

acte

rist

ics

that

req

uir

e se

aso

nal

rat

es?

Wo

uld

se

aso

nal

ra

tes

resu

lt in

dw

elli

ngs

wit

h a

lte

rnat

ive

spac

e h

eat

falli

ng

ou

t o

f St

ep 2

? W

ou

ld t

his

res

ult

in e

ner

gy s

wit

chin

g? D

oes

fu

el s

wit

chin

g al

ign

wit

h p

rovi

nci

al g

ove

rnm

ent

po

licy?

Attachment 2



Page 4 of 49

July

31,

20

14 C

om

men

ts f

rom

Co

mm

issi

on

Sta

ff

5

Slid

e 4

7: F

airn

ess

of

the

Cu

sto

mer

Sp

ecif

ic B

asel

ine

Rat

e

do

esn

’t m

enti

on

th

e im

pac

t o

f w

eath

er v

aria

bili

ty f

or

hea

tin

g cu

sto

mer

s. D

oes

BC

Hyd

ro c

on

sid

er t

his

to

be

a s

ign

ific

ant

fair

nes

s is

sue ?

Slid

es

52

to

6

5

Alt

ern

ativ

e M

ean

s o

f D

eliv

erin

g th

e R

IB

Step

2 r

ate

= L

RM

C

Step

1/St

ep 2

Th

resh

old

al

tern

ativ

es

Bas

ic C

har

ge &

M

inim

um

Ch

arge

al

tern

ativ

es

BC

Hyd

ro’s

pro

po

sed

ev

alu

ati o

n m

eth

od

s in

clu

de:

Juri

sdic

tio

nal

as

sess

men

t

Mo

del

ling

of

rate

s, b

ill im

pac

ts

and

co

nse

rvat

ion

Mea

sure

d a

g ain

st

Bo

nb

righ

t p

rin

cip

les

On

e o

f th

e m

ost

imp

ort

ant

chan

ges

sin

ce t

he

last

rat

e d

esig

n

on

th

e R

IB r

ate

is t

he

do

wn

war

d r

evis

ion

of

the

BC

Hyd

ro

esti

mat

e o

f LR

MC

. A

s a

resu

lt, t

he

curr

ent

Step

-2 r

ate

is

hig

her

th

an L

RM

C. I

t is

use

ful f

or

BC

Hyd

r o t

o d

iscu

ss if

th

e n

ew L

RM

C s

ho

uld

be

use

d a

s th

e b

ench

mar

k fo

r ra

te d

esig

n

in t

he

con

text

of

a w

ider

ran

ge o

f es

t im

a te

and

a lo

wer

co

nfi

den

ce le

vel t

han

pre

vio

us

LRM

C e

stim

ate

s.

Is B

C H

ydro

ab

le t

o d

eter

min

e th

e ex

ten

t th

a t c

ust

om

ers

wh

o

on

ly c

on

sum

e u

nd

er t

he

Ste

p 1

rat

e c

ou

ld b

e o

ver -

con

sum

ing

elec

tric

ity

as a

res

ult

? F

or

exam

ple

, wo

uld

a lo

wer

Ste

p I

rate

en

cou

rage

air

co

nd

itio

ner

sal

es?

K

eep

ing

Bas

ic C

har

ges

bel

ow

co

st a

llow

s m

ore

co

st r

eco

very

fr

om

co

nsu

mp

tio

n c

har

ges

bu

t d

isto

rts

the

fair

co

st r

eco

very

w

ith

in a

cla

ss.

Do

hig

her

fix

ed

ch

arge

s ad

vers

ely

affe

ct lo

w

inco

me

cust

om

ers?

BC

H s

ho

uld

pro

vid

e it

s ra

tio

nal

e fo

r t h

e b

asic

ch

arge

s it

pro

po

ses .

Slid

es

53

to

5

6

The

curr

ent

Ste

p 2

rat

e is

>

LRM

C

Sho

uld

a R

IB r

ate

pri

cin

g p

rin

cip

le c

on

stra

in t

he

Step

2 r

ate

to e

qu

al

LRM

C?

If s

o, t

her

e w

ill b

e a

larg

e in

crea

se t

o S

tep

1 r

ate

and

larg

e re

du

ctio

n in

co

nse

rvat

ion

. A

re t

her

e co

mp

ellin

g

The

issu

e is

wh

eth

er c

on

serv

atio

n in

du

cem

ent

sho

uld

occ

ur

up

to

BC

Hyd

ro’s

mar

gin

al c

ost

of

sup

ply

or

wh

eth

er

con

ser v

atio

n s

ho

uld

be

enco

ura

ged

at

even

hig

her

pri

ces.

Th

e R

DA

sh

ou

ld e

xplo

re t

he

logi

c b

etw

een

th

ese

op

tio

ns

in

the

con

text

of

gov e

rnm

ent

po

licy ,

dir

ect i

ves

to t

he

BC

UC

le

gisl

atio

n, c

ust

om

er b

ehav

iou

r st

ud

ies,

an

d r

ate

des

ign

p

rin

cip

les.

Th

e cu

rren

t St

ep 2

rat

e is

hig

her

th

an t

he

LRM

C e

stim

ate.

At

this

hig

her

rat

e, d

oes

BC

Hyd

ro h

ave

any

evid

enc e

th

at

resi

den

tial

cu

sto

mer

s a r

e d

isco

ura

ged

fro

m u

sin

g e

lect

rici

ty

Attachment 2



Page 5 of 49

July

31,

20

14 C

om

men

ts f

rom

Co

mm

issi

on

Sta

ff

6

reas

on

s to

dep

art

fro

m

pri

or

BC

UC

Dec

isio

ns

that

th

e LR

MC

is t

he

app

rop

riat

e r

efer

ent

to

Step

2 r

ate ?

W

hat

is t

he

alte

rna t

ive

to

LRM

C?

even

wh

en i t

is e

ffic

ien

t u

se?

Do

es B

C H

ydro

hav

e ev

iden

ce

that

re

sid

enti

al c

ust

om

ers

are

mak

ing

mo

re in

vest

men

t s in

ef

fici

ent

ener

g y c

on

sum

pti

on

?

Slid

e 8

2 d

iscu

sses

th

e ar

gum

ents

fo

r an

d a

gain

st a

dd

ing

a ca

pac

ity

valu

e to

LR

MC

an

d B

C H

ydro

ind

icat

es in

its

sum

mar

y th

at it

is n

ot

pro

po

sin

g to

ad

d a

cap

acit

y va

lue

(Sec

. 5

, #8

). E

ven

th

ou

gh B

CH

ind

icat

es t

hat

th

e LR

MC

, in

clu

din

g a

cap

acit

y v a

lue,

is lo

wer

th

an t

he

curr

ent

step

2 r

ate,

ho

w

mu

ch is

th

e in

clu

sio

n (

or

no

t) o

f a

cap

acit

y va

lue

in t

he

LRM

C

an is

sue

goin

g fo

rwar

d?

Slid

es

57

to

6

5

Is t

he

curr

ent

thre

sho

ld (

i.e.,

90

% o

f m

edia

n)

still

ap

pro

pri

ate?

B

C H

ydro

’s a

nal

y sis

:

Red

uct

ion

in t

he

curr

ent

thre

sho

ld

will

red

uce

Ste

p 2

ra

te

Hig

h t

hre

sho

ld,

e.g.

, >7

19

will

ex

ceed

th

e 1

0%

b

ill im

pac

t

BC

H m

a y w

ant

to a

nal

y ze

the

10

% b

ill t

hre

sho

ld in

th

e co

nte

xt o

f th

e va

st m

ajo

rity

of

cust

om

ers

(e.g

., 9

0-9

5%)

rath

er t

han

th

e m

ost

ext

rem

e cu

sto

mer

. Sl

ides

61

-64

sh

ow

bill

imp

act s

fo

r el

ectr

ic h

eat

cust

om

ers

at

vari

ou

s St

ep

2 t

hre

sho

lds.

Is

it p

oss

ible

to

sh

ow

th

e le

vel o

f co

nsu

mp

tio

n o

f h

eati

ng

and

no

n-h

eati

ng

cust

om

ers

rela

tive

to

th

e t h

resh

old

s , a

nd

th

e p

ote

nti

al c

on

s erv

atio

n im

pac

t ar

isin

g fr

om

th

e d

iffe

ren

t th

resh

old

s ?

Slid

es

66

to

8

0

Cu

rren

tly ,

BC

Hyd

ro m

inim

um

ch

arge

is t

he

bas

ic c

har

ge.

Sho

uld

bas

ic c

har

g e b

e in

crea

sed

to

war

d c

ost

-b

ased

? O

r d

ecre

ase

d?

Sho

uld

min

imu

m c

har

ge

be

dec

ou

ple

d f

rom

th

e b

asic

ch

arg e

Wh

at le

vel o

f m

inim

um

ch

arge

wo

uld

be

app

rop

riat

e?

Wh

at a

dd

itio

nal

an

alys

is d

o

stak

eho

lder

s re

com

men

d (

wit

h

BC

Hyd

ro m

od

els

fou

r sc

en

ario

s o

f b

asic

ch

arge

s:

(1)

No

bas

ic

(2)

SQ b

asic

(3

) 5

0% F

C r

eco

very

b

asic

ch

arg e

(4

) 1

00%

FC

Bas

ic

In

(2

) an

d (

3)

sen

siti

vity

an

alys

es a

re c

arri

ed o

ut

for

dif

fer e

nt

leve

ls o

f M

inim

um

Ch

arge

per

The

4 sc

enar

ios

will

be

info

rmat

ive

for

the

app

licat

ion

an

d

fut u

re h

eari

ng.

BC

Hyd

ro s

ho

uld

eva

luat

e e

ach

sce

nar

io’s

co

ntr

ibu

tio

n t

o c

on

serv

atio

n v

s . f

air

cost

rec

ove

ry.

Slid

es 7

9-8

0 in

dic

ate

for

the

Eco

no

mic

Eff

icie

ncy

cri

teri

on

, th

at t

he

Ste

p 2

rat

e is

un

chan

ged

. It

may

be

that

th

is is

in

ten

ded

to

imp

ly n

o im

pac

t o

n c

on

serv

atio

n, b

ut

it w

ou

ld b

e u

sefu

l to

exp

licit

ly a

dd

ress

th

e co

nse

rvat

ion

imp

act .

Attachment 2



Page 6 of 49

July

31,

20

14 C

om

men

ts f

rom

Co

mm

issi

on

Sta

ff

7

reas

on

s)?

mo

nth

.

Slid

es

81

to

8

2

LRM

C f

or

Rat

e M

akin

g B

C H

ydro

pro

po

ses

that

th

e LR

MC

fo

r R

IB r

ate

-m

akin

g n

ot

incl

ud

e a

cap

acit

y va

lue

to b

e ad

ded

to

th

e LR

MC

(e

ner

gy).

Slid

es

81

&

83

Vo

lun

tary

TO

U R

ates

B

C H

ydro

’s p

osi

tio

n is

th

at t

her

e w

ill b

e n

o

asso

ciat

ed

en

ergy

sav

ings

an

d lo

w t

o m

od

est

cap

acit

y sa

vin

gs; t

her

e w

ill b

e co

st-s

hif

tin

g;

par

tici

pat

ion

will

be

limit

ed t

o n

atu

ral w

inn

ers

and

se

lf-s

elec

tin

g cu

sto

mer

s; a

nd

can

res

ult

in

a r

even

ue

sho

rtfa

ll.

Pro

v id

ing

evid

ence

on

th

e ta

ke u

p r

ates

an

d b

enef

its

wh

ere

TOU

has

bee

n im

ple

men

ted

, an

d w

hic

h, i

f an

y, o

f th

e u

tilit

ies

that

imp

lem

ent

TOU

hav

e h

ydro

-bas

ed s

y ste

ms,

wo

ul d

be

info

rmat

ive

to w

het

her

it m

akes

sen

se a

t B

C H

ydro

. Is

th

ere

net

wo

rk c

on

stra

int

at B

C H

ydro

so

th

at it

is n

eces

sary

to

en

cou

rage

cu

sto

mer

s to

sh

ift

to o

ff-p

eak

usa

ge?

Slid

e 8

1

Life

line

Rat

es

BC

Hyd

ro v

i ew

s th

at it

is

ou

tsid

e B

CU

C’s

ju

risd

icti

on

an

d t

he

lifel

ine

rate

s ar

e lik

ely

to

be

un

du

ly d

iscr

imin

ato

ry.

BC

Hyd

ro r

ef e

ren

ces

the

200

8 R

IB A

rgu

men

t an

d

Rep

ly.

A d

iscu

ssio

n o

f th

e co

nse

rvat

ion

po

ten

tial

of

low

inco

me

cust

om

ers

un

der

RIB

rat

e an

d u

nd

er t

arge

ted

DSM

pro

gram

s w

ou

ld b

e h

elp

ful.

Attachment 2



Page 7 of 49

1

2015

RD

A –

Jun

e 25

th, 2

014

RIB

and

Ter

ms

& C

ondi

tions

W

orks

hop

Feed

back

For

m

Nam

e/O

rgan

izat

ion:

B

C P

ublic

Inte

rest

Adv

ocac

y C

entre

on

beha

lf of

BC

OA

PO

et.

al.

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in

your

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Pres

enta

tion

1: E

lect

ric T

ariff

– T

erm

s an

d C

ondi

tions

Upd

ates

and

Cle

an-U

p La

te P

aym

ent C

harg

e –

shou

ld th

e la

te p

aym

ent c

harg

e ap

ply

to a

ll ou

tsta

ndin

g ba

lanc

es o

win

g, n

ot ju

st o

utst

andi

ng

bala

nces

ove

r $30

(i.e

., no

$30

thre

shol

d)?

Ther

e sh

ould

be

sepa

rate

term

s an

d co

nditi

ons

in B

C H

ydro

’s ta

riff

for t

hose

who

can

est

ablis

h w

ith B

C H

ydro

thei

r low

-inco

me

stat

us.

The

term

s an

d co

nditi

ons

shou

ld in

clud

e (in

ter a

lia) s

ecur

ity

depo

sits

; und

er-b

illing

adj

ustm

ents

; equ

al b

illing

and

pay

men

t pl

ans;

dis

conn

ectio

n po

licie

s; a

rrea

rs p

aym

ent a

gree

men

ts; l

ifelin

e ra

tes;

low

er la

te p

aym

ent c

harg

es a

nd in

tere

st ra

tes

on o

verd

ue

acco

unts

; fin

anci

al a

ssis

tanc

e po

licie

s; d

eman

d si

de m

anag

emen

t pr

ogra

ms;

and

low

er re

conn

ectio

n ch

arge

s.

Stan

dard

Cha

rges

- R

econ

nect

ion

Cha

rges

Shou

ld a

gent

cos

ts (o

r a p

ortio

n of

) to

initi

ate

disc

onne

ctio

n pr

oces

s be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an e

xpla

natio

n fo

r the

am

ount

.

Shou

ld th

e re

mot

e di

scon

nect

/reco

nnec

t (R

DR

) sw

itch

and

rela

ted

Info

rmat

ion

Tech

nolo

gy (I

T) c

osts

(or a

por

tion

of) f

or

the

disc

onne

ctio

n be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Pl

ease

pro

vide

an

expl

anat

ion

for t

he a

mou

nt.

Attachment 2



Page 8 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

2

Shou

ld th

e m

anua

l dis

conn

ectio

n co

sts

(or a

por

tion

of) b

e in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

.

BC H

ydro

sho

uld

not i

nclu

de in

the

reco

nnec

tion

char

ge th

e co

sts

of d

isco

nnec

ting

the

cust

omer

in th

e fir

st p

lace

.

Shou

ld a

gent

cos

ts (o

r a p

ortio

n of

) to

initi

ate

the

reco

nnec

tion

proc

ess

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

exp

lana

tion

for t

he a

mou

nt.

As B

C H

ydro

’s a

gent

s ar

e lik

ely

expe

cted

to p

erfo

rm a

cer

tain

nu

mbe

r of t

rans

actio

ns e

ach

hour

, the

bas

ic c

ost t

o BC

Hyd

ro o

f ea

ch a

gent

-per

form

ed p

roce

ss c

an b

e as

certa

ined

and

cou

ld th

en

form

the

basi

s of

a c

ost-b

ased

reco

nnec

tion

char

ge.

Shou

ld IT

cos

ts (o

r a p

ortio

n of

) for

sel

f-ser

vice

reco

nnec

tion

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

.

Thes

e co

sts

shou

ld n

ot b

e fa

ctor

ed in

to th

e re

conn

ectio

n ch

arge

. Th

ese

cost

s ar

e pa

rt of

the

basi

c fu

nctio

nalit

y of

the

smar

t met

er

prog

ram

and

ben

efit

all u

sers

of t

he s

yste

m a

nd n

ot ju

st th

ose

who

ge

t dis

conn

ecte

d an

d re

conn

ecte

d

Shou

ld th

e R

DR

sw

itch

and

rela

ted

IT c

osts

(or a

por

tion

of) f

or

the

reco

nnec

tion

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e?

Plea

se p

rovi

de a

n ex

plan

atio

n fo

r the

am

ount

.

Thes

e co

sts

shou

ld n

ot b

e fa

ctor

ed in

to th

e re

conn

ectio

n ch

arge

. Th

ese

cost

s ar

e pa

rt of

the

basi

c fu

nctio

nalit

y of

the

smar

t met

er

prog

ram

and

ben

efit

all u

sers

of t

he s

yste

m a

nd n

ot ju

st th

ose

who

ge

t dis

conn

ecte

d an

d re

conn

ecte

d.

Shou

ld th

e m

anua

l rec

onne

ctio

n co

sts

(or a

por

tion

of) b

e in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

.

The

cost

s of

man

ual d

isco

nnec

tion

for t

he s

mal

l num

ber o

f cu

stom

ers

who

(for

no

faul

t of t

heir

own)

can

not h

ave

thei

r met

ers

disc

onne

cted

rem

otel

y sh

ould

be

built

into

the

stan

dard

re

conn

ectio

n ch

arge

.

The

full

cost

of t

he re

conn

ectio

n fe

e ca

n st

ill be

col

lect

ed fr

om

cust

omer

s w

ho o

pt o

ut o

f sm

art m

eter

s.

Shou

ld a

n av

erag

e re

conn

ectio

n ch

arge

for r

emot

e an

d m

anua

l di

scon

nect

ions

be

used

? Th

e ch

arge

to re

conn

ect s

houl

d in

corp

orat

e th

e co

sts

of re

mot

e re

conn

ects

and

the

cost

s of

reco

nnec

ting

man

ually

all

thos

e cu

stom

ers

who

(for

no

faul

t of t

heir

own)

can

not h

ave

thei

r met

ers

disc

onne

cted

rem

otel

y.

Attachment 2



Page 9 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

3

Shou

ld th

ere

be a

diff

eren

t rec

onne

ctio

n ch

arge

for c

usto

mer

s m

ovin

g in

to d

isco

nnec

ted

unsi

gned

pre

mis

es?

Stan

dard

Cha

rges

- N

ew M

isce

llane

ous

Cha

rges

Acco

unt C

harg

e –

shou

ld a

diff

eren

t fee

be

char

ged

for t

he s

et-

up o

f new

cus

tom

ers?

G

iven

that

low

-inco

me

rate

paye

rs p

roba

bly

mov

e m

ore

ofte

n th

an

thos

e w

ith h

ighe

r inc

omes

, BC

Hyd

ro s

houl

d no

t cha

rge

as m

uch

for c

usto

mer

s w

ho m

ove

as fo

r set

ting

up n

ew a

ccou

nts.

Acco

unt C

harg

e –

shou

ld a

dis

coun

t be

offe

red

for c

usto

mer

s pr

oces

sing

the

acco

unt m

ove

thro

ugh

the

on-li

ne c

hann

el?

Giv

en th

at lo

w-in

com

e ra

tepa

yers

hav

e le

ss a

cces

s to

the

inte

rnet

, w

e do

not

sup

port

this

dis

coun

t. Fu

rther

, BC

Hyd

ro is

not

pr

opos

ing

to g

ive

thos

e w

ho p

ay th

eir b

ills u

sing

inte

rnet

ban

king

an

y fo

rm o

f dis

coun

t.

Non

-Pay

men

t Rep

ort C

harg

e –

if th

e re

conn

ectio

n ch

arge

is

sign

ifica

ntly

redu

ced,

sho

uld

ther

e be

a c

harg

e fo

r rep

orte

d pa

ymen

ts n

ot re

ceiv

ed a

s a

mea

ns o

f det

errin

g be

havi

our?

In th

e ev

ent t

hat B

C H

ydro

sig

nific

antly

redu

ces

the

reco

nnec

tion

char

ge (f

rom

$12

5 to

at m

ost $

30) t

hen

intro

duci

ng s

uch

a ch

arge

m

ay d

eter

suc

h be

havi

our.

Cus

tom

ers

who

def

ault

on th

eir p

aym

ent o

blig

atio

ns a

re a

lread

y be

ing

pena

lized

by

bein

g de

nied

ser

vice

and

hav

ing

to p

ay in

tere

st

on o

verd

ue a

ccou

nts.

The

refo

re, t

he im

pact

of f

urth

er p

enal

ties

shou

ld b

e ca

refu

lly c

onsi

dere

d.

Cre

dit C

ard

Cha

rges

– s

houl

d cr

edit

card

pay

men

ts b

e ac

cept

ed a

nd in

clud

e fe

es in

gen

eral

rate

s?

No,

as

high

er in

com

e pe

ople

are

mor

e lik

ely

to p

ay th

eir b

ills w

ith

cred

it ca

rds,

all

rate

paye

rs s

houl

d no

t hav

e to

pay

thei

r cre

dit c

ard

fees

.

Cre

dit C

ard

Cha

rges

– s

houl

d cr

edit

card

pay

men

ts b

e ac

cept

ed b

ut o

nly

if ab

le to

pas

s on

fees

to c

usto

mer

s us

ing

paym

ent c

hann

el?

Yes,

cre

dit c

ards

sho

uld

only

be

acce

pted

if B

C H

ydro

can

pas

s on

th

e ad

ditio

nal f

ees

asso

ciat

ed w

ith c

redi

t car

d pa

ymen

ts to

the

cust

oem

rs w

ho c

hoos

e to

pay

with

cre

dit c

ards

.

Attachment 2



Page 10 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

4

Pres

enta

tion

2 - R

esid

entia

l inc

linin

g B

lock

(RIB

) and

ot

her p

oten

tial r

esid

entia

l rat

e is

sues

A.

Shou

ld B

C H

ydro

con

tinue

to c

onsi

der a

Thr

ee S

tep

Rat

e an

d if

so, w

hat a

dditi

onal

ana

lysi

s do

sta

keho

lder

s re

com

men

d (w

ith re

ason

s)?

BC H

ydro

sho

uld

cons

ider

mod

elin

g a

3 st

ep ra

te w

here

i) th

e fir

st

tier g

ives

eve

ry re

side

ntia

l cus

tom

er e

noug

h po

wer

eac

h m

onth

(e

.g. 2

50 k

Wh)

to m

eet t

he b

asic

nec

essi

ties

at a

ver

y lo

w

“her

itage

” rat

e of

, for

exa

mpl

e, 5

cen

ts/k

Wh,

and

ii) w

here

the

third

tie

r wou

ld b

e se

t at a

n ap

prox

imat

ely

10%

pre

miu

m o

ver L

RM

C to

fu

nd i)

life

line

rate

s fo

r low

-inco

me

rate

paye

rs ii

)low

-inco

me

DSM

pr

ogra

ms,

and

iii)

finan

cial

ass

ista

nce

prog

ram

s.

B.

Shou

ld B

C H

ydro

con

tinue

to c

onsi

der a

Sea

sona

l Rat

e st

ruct

ure

and

if so

, wha

t add

ition

al a

naly

sis

do

stak

ehol

ders

reco

mm

end

(with

reas

ons)

?

A se

ason

al ra

te s

truct

ure

mig

ht c

onve

y a

bene

fit o

n th

ose

cust

omer

s w

ho u

se e

lect

ricity

to h

eat t

heir

spac

e an

d w

ater

. Thi

s w

ould

see

m li

ke lo

okin

g be

yond

the

met

er, w

hich

is s

omet

hing

BC

H

ydro

see

ks to

avo

id.

C.

BC H

ydro

con

clud

es th

at a

Cus

tom

er S

peci

fic B

asel

ine

Rat

e is

not

a v

iabl

e op

tion.

Agre

ed in

gen

eral

term

s, b

ut B

CO

APO

not

es th

at s

ome

US

juris

dict

ions

giv

e th

eir l

ow-in

com

e cu

stom

ers

and

thos

e w

ith

certa

in m

edic

al c

ondi

tions

an

addi

tiona

l am

ount

of e

nerg

y ea

ch

day

in th

eir b

ase

line

amou

nts.

D.

BC H

ydro

con

side

rs th

at a

Fla

t Rat

e is

inco

nsis

tent

with

go

vern

men

t pol

icy

and

perfo

rms

wor

se re

lativ

e to

the

SQ in

term

s of

effi

cien

cy a

nd fa

irnes

s co

nsid

erat

ions

. BC

Hyd

ro th

eref

ore

prop

oses

that

no

furth

er m

odel

ing

is

requ

ired,

and

ask

s fo

r sta

keho

lder

com

men

t.

Agre

ed. A

flat

rate

wou

ld b

e in

cons

iste

nt w

ith p

rovi

ncia

l pol

icy

as

pres

ently

enu

ncia

ted.

E.

BC H

ydro

see

ks in

put o

n w

heth

er a

RIB

rate

pric

ing

prin

cipl

e sh

ould

con

stra

in th

e St

ep-2

rate

to e

qual

LR

MC

.

Attachment 2



Page 11 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

5

F.

Are

ther

e co

mpe

lling

reas

ons

to d

epar

t fro

m p

rior

BCU

C D

ecis

ions

that

the

LRM

C is

the

appr

opria

te

refe

rent

to a

Ste

p 2

rate

, and

if s

o w

hat i

s th

e al

tern

ativ

e?

In m

any

juris

dict

ions

, LR

MC

may

be

a m

eani

ngfu

l con

cept

, but

in

BC, t

he p

rovi

ncia

l ene

rgy

polic

y th

at m

anda

tes

“sel

f-suf

ficie

ncy”

an

d re

quire

s BC

Hyd

ro to

pur

chas

e fa

r mor

e in

term

itten

t pow

er

than

it n

eeds

at p

rem

ium

pric

es m

akes

the

calc

ulat

ion

of L

RM

C

alm

ost m

eani

ngle

ss.

G.

BC H

ydro

see

ks in

put o

n w

heth

er th

ere

are

com

pellin

g re

ason

s to

cha

nge

the

SQ R

IB th

resh

old

and

if so

, wha

t ad

ditio

nal a

naly

sis

do s

take

hold

ers

reco

mm

end

(with

re

ason

s)?

The

unde

rlyin

g pr

inci

ple

shou

ld b

e su

bjec

t to

ongo

ing

revi

ew.

Low

erin

g th

e SQ

RIB

thre

shol

d to

600

kWh/

mo.

may

enc

oura

ge

mor

e co

nser

vatio

n by

sho

win

g m

ore

peop

le th

e Ti

er 2

pric

e du

ring

the

win

ter m

onth

s.

BC H

ydro

mig

ht a

lso

cons

ider

mon

thly

billi

ng a

s op

pose

d to

bi-

mon

thly

, as

this

wou

ld s

end

pric

e si

gnal

s tw

ice

as o

ften

to it

s cu

stom

ers.

H.

BC H

ydro

see

ks in

put o

n w

hy B

C H

ydro

wou

ld m

odel

ve

ry lo

w th

resh

olds

(500

, 400

, oth

er k

Wh/

mo.

) as

they

do

not

refle

ct ty

pica

l Res

iden

tial u

se.

Wha

t is

the

obje

ctiv

e ba

sis

for a

ver

y lo

w th

resh

old?

See

the

resp

onse

to A

. abo

ve.

I. BC

Hyd

ro s

eeks

inpu

t on

incr

easi

ng o

r dec

reas

ing

the

Basi

c C

harg

e, a

nd w

hat a

dditi

onal

ana

lysi

s, if

any

, st

akeh

olde

rs re

com

men

d (w

ith re

ason

s).

It w

ould

hel

p if

BC H

ydro

, its

regu

lato

r, an

d its

cus

tom

ers

all

shar

ed a

com

mon

und

erst

andi

ng o

f the

pur

pose

of t

he B

asic

C

harg

e.

BC H

ydro

’s B

asic

Cha

rge

is in

here

ntly

regr

essi

ve a

nd a

s a

cons

eque

nce,

BC

OAP

O e

t al.

plan

s to

opp

ose

any

prop

osal

to

incr

ease

it.

We

have

sug

gest

ed th

at B

C H

ydro

con

side

r est

ablis

hing

a c

harg

e th

at re

flect

s th

e am

pera

ge a

t whi

ch c

usto

mer

s ta

ke s

ervi

ce (i

.e.

som

eone

taki

ng s

ervi

ce a

t 200

am

ps w

ould

pay

a lo

wer

cha

rge

than

a c

usto

mer

taki

ng s

ervi

ce a

t 400

am

ps).

Attachment 2



Page 12 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

6

J.

BC H

ydro

see

ks in

put o

n de

coup

ling

the

Min

imum

C

harg

e fro

m th

e Ba

sic

Cha

rge,

incl

udin

g in

rela

tion

to

whe

ther

the

Basi

c C

harg

e sh

ould

be

chan

ged.

W

e ag

ree

with

the

conc

ept o

f dec

oupl

ing.

K.

BC H

ydro

pro

pose

s no

furth

er m

odel

ing

is re

quire

d in

re

spec

t of 1

00%

fixe

d co

st re

cove

ry th

roug

h a

Basi

c C

harg

e or

in re

spec

t of e

limin

atin

g al

l for

ms

of fi

xed

char

ges.

L.

Wha

t add

ition

al a

naly

sis,

if a

ny, d

o st

akeh

olde

rs

reco

mm

end

(with

reas

ons)

? W

e ha

ve s

ugge

sted

that

BC

Hyd

ro c

onsi

der e

stab

lishi

ng a

cha

rge

that

refle

cts

the

ampe

rage

at w

hich

cus

tom

ers

take

ser

vice

(i.e

. so

meo

ne ta

king

ser

vice

at 2

00 a

mps

wou

ld p

ay a

low

er c

harg

e th

an a

cus

tom

er ta

king

ser

vice

at 4

00 a

mps

).

M.

BC H

ydro

pro

pose

s th

at th

e LR

MC

for R

IB ra

te-m

akin

g no

t inc

lude

a c

apac

ity v

alue

to b

e ad

ded

to th

e LR

MC

(e

nerg

y). W

hat a

re s

take

hold

ers’

vie

ws

on th

e co

ncep

t?

BC H

ydro

sho

uld

reco

gniz

e th

at a

ll en

ergy

requ

ires

capa

city

and

th

at u

nder

cur

rent

gov

ernm

ent p

olic

y, th

e in

term

itten

t pow

er th

at

BC H

ydro

is o

blig

ed to

con

tract

for a

t pre

miu

m p

rices

del

iver

s ve

ry

limite

d am

ount

s of

dep

enda

ble

capa

city

. Acc

ordi

ngly

any

est

imat

e of

LR

MC

sho

uld

incl

ude

reco

gniti

on o

f the

UC

C o

f Rev

elst

oke

6 an

d th

e ne

cess

ary

trans

mis

sion

and

sub

stat

ion

infra

stru

ctur

e,

incr

ease

d by

a li

ne lo

ss fa

ctor

.

N.

BC H

ydro

see

ks s

take

hold

er fe

edba

ck o

n th

e re

ason

s w

hy B

C H

ydro

wou

ld p

ursu

e Vo

lunt

ary

TOU

for

Res

iden

tial c

usto

mer

s.

We

oppo

se v

olun

tary

TO

U fo

r res

iden

tial c

usto

mer

s. T

OU

rate

s ar

e un

likel

y to

ben

efit

low

-inco

me

rate

paye

rs.

Attachment 2



Page 13 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

7

Add

ition

al C

omm

ents

, Ite

ms

you

thin

k sh

ould

be

in-s

cope

, not

cur

rent

ly id

entif

ied:

Attachment 2



Page 14 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

8

CO

NSE

NT

TO U

SE P

ERSO

NAL

INFO

RM

ATIO

N

I con

sent

to th

e us

e of

my

pers

onal

info

rmat

ion

by B

C H

ydro

for t

he p

urpo

ses

of k

eepi

ng m

e up

date

d ab

out t

he 2

015

RD

A. F

or

purp

oses

of t

he a

bove

, my

pers

onal

info

rmat

ion

incl

udes

opi

nion

s, n

ame,

mai

ling

addr

ess,

pho

ne n

umbe

r and

em

ail a

ddre

ss a

s pe

r th

e in

form

atio

n I p

rovi

de.

Sign

atur

e:__

____

____

____

____

____

____

____

____

____

____

____

___

Dat

e: _

____

____

____

____

____

____

___

Than

k yo

u fo

r you

r com

men

ts.

Com

men

ts s

ubm

itted

will

be u

sed

to in

form

the

RD

A Sc

ope

and

Enga

gem

ent p

roce

ss, i

nclu

ding

dis

cuss

ions

with

Gov

ernm

ent,

and

will

form

par

t of t

he o

ffici

al re

cord

of t

he R

DA.

You

can

retu

rn c

ompl

eted

feed

back

form

s by

:

Mai

l: BC

Hyd

ro, B

C H

ydro

Reg

ulat

ory

Gro

up –

“Atte

ntio

n 20

15 R

DA”

, 16th

Flo

or, 3

33 D

unsm

uir S

t. Va

n. B

.C. V

6B-5

R3

Fax

num

ber:

604-

623-

4407

– “A

ttent

ion

2015

RD

A”

Emai

l: bc

hydr

oreg

ulat

oryg

roup

@bc

hydr

o.co

m

Form

ava

ilabl

e on

Web

: http

://w

ww

.bch

ydro

.com

/abo

ut/p

lann

ing_

regu

lato

ry/re

gula

tory

.htm

l

Any

pers

onal

info

rmat

ion

you

prov

ide

to B

C H

ydro

on

this

form

is c

olle

cted

and

pro

tect

ed in

acc

orda

nce

with

the

Free

dom

of I

nfor

mat

ion

and

Prot

ectio

n of

Priv

acy

Act

. BC

Hyd

ro is

col

lect

ing

info

rmat

ion

with

this

for t

he p

urpo

se o

f the

201

5 R

DA

in a

ccor

danc

e w

ith B

C H

ydro

’s m

anda

te

unde

r the

Hyd

ro a

nd P

ower

Aut

horit

y A

ct, t

he B

C H

ydro

Tar

iff, t

he U

tiliti

es C

omm

issi

on A

ct a

nd re

late

d R

egul

atio

ns a

nd D

irect

ions

. If y

ou

have

any

que

stio

ns a

bout

the

colle

ctio

n or

use

of t

he p

erso

nal i

nfor

mat

ion

colle

cted

on

this

form

ple

ase

cont

act t

he B

C H

ydro

Reg

ulat

ory

Gro

up

via

emai

l at:

bchy

dror

egul

ator

ygro

up@

bchy

dro.

com

Attachment 2



Page 15 of 49

1

2015

RD

A –

Jun

e 25

th, 2

014

RIB

and

Ter

ms

& C

ondi

tions

W

orks

hop

Feed

back

For

m

Nam

e/O

rgan

izat

ion:

B.C

. Sus

tain

able

Ene

rgy

Ass

ocia

tion

and

Sier

ra C

lub

of B

.C.

29 A

ugus

t 201

4

Attachment 2



Page 16 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

2

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Pres

enta

tion

1: E

lect

ric T

ariff

– T

erm

s an

d C

ondi

tions

Attachment 2



Page 17 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

3

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Upd

ates

and

Cle

an-U

p La

te P

aym

ent C

harg

e –

shou

ld th

e la

te p

aym

ent c

harg

e ap

ply

to a

ll ou

tsta

ndin

g ba

lanc

es o

win

g, n

ot ju

st o

utst

andi

ng

bala

nces

ove

r $30

(i.e

., no

$30

thre

shol

d)?

BC

SE

A-S

CB

C u

nder

stan

d th

at th

e cu

rren

t Lat

e P

aym

ent C

harg

e is

1.5

% p

er m

onth

(equ

ival

ent t

o 19

.6%

per

ann

um c

ompo

unde

d m

onth

ly).

[p.1

1] W

e do

n’t h

ave

info

rmat

ion

abou

t a $

30 th

resh

old.

Th

ere

are

two

parts

to th

e qu

estio

n: 1

. Sho

uld

ther

e be

a $

30

thre

shol

d? 2

. If t

here

is a

$30

thre

shol

d, s

houl

d th

e ch

arge

app

ly

only

to a

mou

nts

abov

e $3

0 or

sho

uld

the

char

ge a

pply

to th

e en

tire

outs

tand

ing

amou

nt.

Sev

eral

fact

ors

shou

ld b

e ta

ken

into

con

side

ratio

n:

1. Im

pact

on

low

inco

me

cust

omer

s. W

here

a p

aym

ent i

s la

te

beca

use

the

cust

omer

lack

s th

e ab

ility

to p

ay, i

t is

impo

rtant

that

th

e la

te p

aym

ent c

harg

e no

t unn

eces

saril

y ex

acer

bate

the

situ

atio

n. F

or e

xam

ple,

it w

ould

pro

babl

y be

des

irabl

e fo

r the

cu

stom

er to

kno

w e

xact

ly h

ow m

uch

mus

t pai

d, a

s op

pose

d to

a

mov

ing

targ

et th

at g

oes

up b

y a

few

cen

ts e

very

per

iod

of ti

me.

O

ne w

ould

n’t w

ant a

situ

atio

n w

here

the

cust

omer

pay

s th

e ou

tsta

ndin

g am

ount

, onl

y to

dis

cove

r tha

t the

bill

is n

ot fu

lly p

aid

beca

use

of th

e la

te p

aym

ent c

harg

e.

2. D

isco

urag

ing

finan

cial

ly m

otiv

ated

late

pay

men

t. C

lear

ly, i

t w

ould

not

be

desi

rabl

e to

hav

e su

ch a

low

fina

nica

l con

sequ

ence

of

late

pay

men

t tha

t a s

hrew

d cu

stom

er c

ould

act

ually

sav

e m

oney

by

pay

ing

late

. 3.

Sim

plic

ity. F

or b

oth

BC

Hyd

ro a

nd th

e cu

stom

er th

ere

is v

alue

in

sim

plic

ity. F

or e

xam

ple,

if th

e th

resh

old

was

abo

lishe

d en

tirel

y,

then

ther

e co

uld

be la

te p

aym

ent c

harg

es th

at w

ork

out t

o le

ss

than

a d

olla

r. Th

at w

ould

be

mor

e tro

uble

than

it’s

wor

th. A

lso,

so

me

cust

omer

s m

ay ro

und

off t

heir

paym

ent:

a lit

tle o

ver o

n on

e in

voic

e, a

littl

e un

der o

n th

e ne

xt. I

t wou

ldn’

t be

help

ful t

o ge

t int

o di

sput

es a

bout

triv

ially

sm

all l

ate

paym

ents

.

Attachment 2



Page 18 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

4

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

4.

Leg

ality

of t

he e

ffect

ive

inte

rest

. We

don’

t kno

w w

hat t

he

max

imum

lega

l rat

e of

effe

ctiv

e in

tere

st is

, or w

heth

er it

tech

nica

lly

appl

ies

to a

util

ity ra

te. B

ut 1

9.6%

per

ann

um s

eem

s lik

e a

very

hi

gh p

enal

ty fo

r lat

e pa

ymen

t. St

anda

rd C

harg

es -

Rec

onne

ctio

n C

harg

es

Sho

uld

agen

t cos

ts (o

r a p

ortio

n of

) to

initi

ate

disc

onne

ctio

n pr

oces

s be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an e

xpla

natio

n fo

r the

am

ount

.

For a

ll of

thes

e R

econ

nect

ion

Cha

rges

que

stio

ns, B

CS

EA

-SC

BC

mak

e tw

o po

ints

at t

his

time.

1.

We

supp

ort m

akin

g it

less

diff

icul

t for

peo

ple

with

fina

nica

l diff

icul

ties

to

rees

tabl

ish

serv

ice

afte

r a d

isco

nnec

tion

due

to th

eir i

nabi

lity

to p

ay.

2. W

e do

n’t f

eel w

e ha

ve e

noug

h in

form

atio

n on

the

pote

ntia

l for

a

redu

ctio

n in

the

Rec

onne

ctio

n C

harg

e to

influ

ence

the

beha

viou

r of

cust

omer

s w

hose

occ

upan

cy is

sea

sona

l or i

nter

mitt

ent.

To w

hat e

xten

t w

ould

redu

cing

the

Rec

onne

ctio

n C

harg

e in

duce

peo

ple

to te

rmin

ate

and

reco

nnec

t rat

her t

han

reta

inin

g se

rvic

e du

ring

perio

ds o

f non

-occ

upan

cy?

Wha

t are

the

pros

and

con

s of

indu

cing

peo

ple

to te

rmin

ate

and

reco

nnec

t ele

ctric

al s

ervi

ce fo

r per

iods

of n

on-o

ccup

ancy

? Is

ther

e a

sign

fican

t net

reve

nue

cost

to B

C H

ydro

? A

re th

ere

safe

ty is

sues

(wire

d sm

oke

alar

ms

bein

g in

oper

ativ

e, fo

r exa

mpl

e)?

Sho

uld

the

rem

ote

disc

onne

ct/re

conn

ect (

RD

R) s

witc

h an

d re

late

d In

form

atio

n Te

chno

logy

(IT)

cos

ts (o

r a p

ortio

n of

) for

th

e di

scon

nect

ion

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e?

Ple

ase

prov

ide

an e

xpla

natio

n fo

r the

am

ount

.

Sho

uld

the

man

ual d

isco

nnec

tion

cost

s (o

r a p

ortio

n of

) be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an

expl

anat

ion

for t

he a

mou

nt.

Sho

uld

agen

t cos

ts (o

r a p

ortio

n of

) to

initi

ate

the

reco

nnec

tion

proc

ess

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

exp

lana

tion

for t

he a

mou

nt.

Attachment 2



Page 19 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

5

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Sho

uld

IT c

osts

(or a

por

tion

of) f

or s

elf-s

ervi

ce re

conn

ectio

n be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an

expl

anat

ion

for t

he a

mou

nt.

Sho

uld

the

RD

R s

witc

h an

d re

late

d IT

cos

ts (o

r a p

ortio

n of

) for

th

e re

conn

ectio

n be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

P

leas

e pr

ovid

e an

exp

lana

tion

for t

he a

mou

nt.

Sho

uld

the

man

ual r

econ

nect

ion

cost

s (o

r a p

ortio

n of

) be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an

expl

anat

ion

for t

he a

mou

nt.

Sho

uld

an a

vera

ge re

conn

ectio

n ch

arge

for r

emot

e an

d m

anua

l di

scon

nect

ions

be

used

?

Sho

uld

ther

e be

a d

iffer

ent r

econ

nect

ion

char

ge fo

r cus

tom

ers

mov

ing

into

dis

conn

ecte

d un

sign

ed p

rem

ises

?

Stan

dard

Cha

rges

- N

ew M

isce

llane

ous

Cha

rges

Attachment 2



Page 20 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

6

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Acc

ount

Cha

rge

– sh

ould

a d

iffer

ent f

ee b

e ch

arge

d fo

r the

set

-up

of n

ew c

usto

mer

s?

BC

SE

A-S

CB

C u

nder

stan

d th

at th

e qu

estio

n is

whe

ther

ther

e sh

ould

be

a di

ffere

nt c

harg

e fo

r set

ting

up a

new

acc

ount

for a

new

cu

stom

er c

ompa

red

to s

ettin

g up

a n

ew a

ccou

nt fo

r an

exis

ting

cust

omer

(i.e

., a

cust

omer

who

is m

ovin

g fro

m o

ne p

rem

ises

to

anot

her)

. [p.

12] “

Val

idat

ion

of id

entit

y is

an

addi

tiona

l ste

p pe

rform

ed o

nly

for n

ew c

usto

mer

s.” W

e do

n’t h

ave

enou

gh

info

rmat

ion

at th

is p

oint

to b

e co

nvin

ced

that

ther

e is

a s

uffic

ient

ly

clea

r cut

line

bet

wee

n a

new

and

and

exi

stin

g cu

stom

er fo

r tha

t di

stin

ctio

n to

be

the

basi

s fo

r a d

iffer

ent c

harg

e. T

he d

ecis

ion

whe

ther

to d

o a

valid

atio

n of

iden

tity

can

be m

ade

with

inte

rnal

po

licie

s an

d gu

idel

ines

that

allo

w m

ore

exer

cise

of j

udge

men

t and

di

scre

tion

than

wou

ld b

e po

ssib

le if

ther

e th

ere

finan

cial

co

nseq

uenc

es to

the

cust

omer

. For

exa

mpl

e, w

hat l

engt

h of

tim

e be

twee

n th

e te

rmin

atio

n of

the

old

acco

unt a

nd th

e se

t-up

of th

e ne

w a

ccou

nt w

ould

dis

qual

ify a

per

son

from

the

exis

ting-

cust

omer

ch

arge

? W

hat a

bout

a c

hang

e fro

m a

n ac

coun

t in

two

nam

es to

an

acco

unt i

n on

e na

me?

Wha

t abo

ut a

cha

nge

in th

e cu

stom

er’s

na

me

– ho

w m

uch

of a

diff

eren

ce d

oes

ther

e ha

ve to

be

betw

een

the

old

and

the

new

nam

e?

Acc

ount

Cha

rge

– sh

ould

a d

isco

unt b

e of

fere

d fo

r cus

tom

ers

proc

essi

ng th

e ac

coun

t mov

e th

roug

h th

e on

-line

cha

nnel

? Y

es. B

CS

EA

-SC

BC

stro

ngly

favo

ur re

war

ding

cus

tom

ers

for u

sing

m

ore

effic

ient

mea

ns o

f int

erac

ting

with

the

com

pany

.

Attachment 2



Page 21 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

7

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Non

-Pay

men

t Rep

ort C

harg

e –

if th

e re

conn

ectio

n ch

arge

is

sign

ifica

ntly

redu

ced,

sho

uld

ther

e be

a c

harg

e fo

r rep

orte

d pa

ymen

ts n

ot re

ceiv

ed a

s a

mea

ns o

f det

errin

g be

havi

our?

BC

SE

A-S

CB

C n

eed

mor

e in

form

atio

n on

the

ratio

nale

for l

inki

ng a

fa

lse

paym

ent r

epor

t cha

rge

to th

e re

conn

ectio

n ch

arge

bei

ng

sign

ifica

ntly

redu

ced.

Th

ere

prob

ably

sho

uld

be a

cha

rge

for a

fals

e pa

ymen

t-mad

e re

port.

Con

side

ratio

n co

uld

be g

iven

to a

slid

ing

scal

e fo

r rep

eat

occu

rren

ces

by th

e sa

me

cust

omer

/acc

ount

. On

the

one

hand

, pe

ople

who

are

hav

ing

diffi

culti

es g

ettin

g th

eir s

ervi

ce re

conn

ecte

d ar

e vu

lner

able

and

it w

ould

be

coun

ter-

prod

uctiv

e to

add

to th

eir

woe

s un

nece

ssar

ily. O

n th

e ot

her,

it w

ould

not

be

func

tiona

l to

crea

te a

loop

hole

by

whi

ch a

per

son

coul

d ge

t ele

ctric

al s

ervi

ce

with

out p

ayin

g fo

r it,

sim

ply

by m

akin

g re

peat

ed fa

lse

paym

ent-

mad

e re

ports

. C

redi

t Car

d C

harg

es –

sho

uld

cred

it ca

rd p

aym

ents

be

acce

pted

and

incl

ude

fees

in g

ener

al ra

tes?

B

CS

EA

-SC

BC

don

’t ha

ve a

fina

l pos

ition

on

this

que

stio

n. W

e un

ders

tand

that

BC

Hyd

ro c

urre

ntly

allo

ws

auto

deb

it fro

m fi

nanc

ial

acco

unts

. Is

ther

e an

impo

rtant

reas

on w

hy o

fferin

g a

cred

it ca

rd

paym

ent o

ptio

n w

ould

mee

t cus

tom

ers’

nee

ds, b

eyon

d re

war

ds

poin

ts?

Attachment 2



Page 22 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

8

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Cre

dit C

ard

Cha

rges

– s

houl

d cr

edit

card

pay

men

ts b

e ac

cept

ed b

ut o

nly

if ab

le to

pas

s on

fees

to c

usto

mer

s us

ing

paym

ent c

hann

el?

On

p.15

, the

mat

eria

ls s

tate

, “C

onsi

dera

tion

of B

C H

ydro

acc

eptin

g cr

edit

card

pay

men

ts d

irect

ly a

nd p

assi

ng fe

es o

nto

cust

omer

s th

at

use

this

pay

men

t cha

nnel

.” N

otin

g th

at c

redi

t car

d co

mpa

ny

trans

actio

n ch

arge

s ca

n de

duct

sev

eral

per

cent

from

the

mer

chan

t’s n

et re

ceip

t, it

wou

ld b

e hi

ghly

des

irabl

e to

ass

ign

cred

it ca

rd c

harg

es to

the

parti

cula

r cus

tom

ers

caus

ing

them

, if t

hat w

ere

poss

ible

. How

ever

, we

unde

rsta

nd th

at th

e cr

edit

card

com

pani

es

don’

t nor

mal

ly a

llow

a m

erch

ant t

o im

pose

a s

urch

arge

on

a tra

nsac

tion

paid

by

cred

it ca

rd. A

lso,

not

e th

at th

e si

ze o

f the

cre

dit

card

fee

varie

s by

the

type

of c

ard.

Car

ds w

ith h

igh

cust

omer

re

war

ds a

ttrac

t hig

h tra

nsac

tion

fees

(nor

mal

ly p

aid

by th

e m

erch

ant).

If it

wer

e no

t pos

sibl

e fo

r BC

Hyd

ro to

pas

s th

e cr

edit

card

tran

sact

ion

fee

on to

cus

tom

ers

payi

ng b

y cr

edit

card

, the

n ot

her r

atep

ayer

s w

ould

be

subs

idiz

ing

the

conv

enie

nce

and

cred

it ca

rd re

war

ds re

ceiv

ed b

y cu

stom

ers

who

pay

by

cred

it ca

rd. T

his

wou

ld n

ot b

e fa

ir, u

nles

s th

ere

is a

n im

porta

nt ra

tiona

le fo

r mak

ing

cred

it ca

rd p

aym

ent s

ervi

ce a

vaila

ble

that

we

are

unaw

are

of.

Pres

enta

tion

2 - R

esid

entia

l inc

linin

g B

lock

(RIB

) and

ot

her p

oten

tial r

esid

entia

l rat

e is

sues

Attachment 2



Page 23 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

9

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

A.

Sho

uld

BC

Hyd

ro c

ontin

ue to

con

side

r a T

hree

-ste

p R

ate

and

if so

, wha

t add

ition

al a

naly

sis

do s

take

hold

ers

reco

mm

end

(with

reas

ons)

?

No.

On

the

unde

rsta

ndin

g th

at B

C H

ydro

has

reje

cted

mod

elin

g a

life-

line

rate

, BC

SE

A-S

CB

C th

ink

that

the

thre

e-st

ep ra

te o

ffers

in

suffi

cien

t ben

efits

to ju

stify

cha

ngin

g fro

m th

e ex

istin

g, k

now

n tw

o-st

ep ra

te d

esig

n. O

ther

thin

gs b

eing

equ

al, r

etai

ning

the

stat

us

quo

two-

step

rate

has

the

adva

ntag

e of

sim

plic

ity, c

usto

mer

ac

cept

ance

and

cus

tom

er u

nder

stan

ding

. Mov

ing

to a

thre

e-st

ep

desi

gn w

ould

not

indu

ce s

igni

fican

tly m

ore

cons

erva

tion

and

effic

ienc

y. B

CS

EA

-SC

BC

wou

ld b

e sy

mpa

thet

ic to

life

-line

rate

co

ncep

t for

low

inco

me

cust

omer

s. H

owev

er, s

impl

y ad

ding

a lo

w-

cons

umpt

ion/

low

-rat

e st

ep w

ould

not

effi

cien

tly a

ssis

t low

inco

me

cust

omer

s be

caus

e m

any

low

inco

me

cust

omer

s w

ould

not

ben

efit

(bec

ause

they

hav

e av

erag

e or

abo

ve c

onsu

mpt

ion)

, and

man

y no

n-lo

w-in

com

e cu

stom

ers

wou

ld b

enef

it (b

ecau

se th

ey h

appe

n to

ha

ve v

ery

low

con

sum

ptio

n fo

r any

of a

var

iety

of r

easo

ns, s

uch

as

seas

onal

occ

upan

cy, w

ell i

nsul

ated

pre

mis

es, n

on-e

lect

ric h

eat,

etc.

) W

e no

te a

n ap

pare

nt in

cons

iste

ncy

betw

een

BC

Hyd

ro’s

sta

ted

prin

cipl

e th

at th

e S

tep

2 pr

ice

ough

t not

to e

xcee

d th

e LR

MC

and

th

e m

odel

led

Ste

p 3

pric

e in

this

inst

ance

(pp.

35-3

6). G

iven

that

B

C H

ydro

has

mod

eled

a th

ree-

step

rate

whe

re th

e hi

ghes

t rat

e ex

ceed

s th

e LR

MC

, it w

ould

be

usef

ul to

mod

el a

two-

step

rate

w

here

the

seco

nd s

tep

exce

eds

the

LRM

C.

Attachment 2



Page 24 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

10

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

B.

Sho

uld

BC

Hyd

ro c

ontin

ue to

con

side

r a S

easo

nal R

ate

stru

ctur

e an

d if

so, w

hat a

dditi

onal

ana

lysi

s do

st

akeh

olde

rs re

com

men

d (w

ith re

ason

s)?

BC

SE

A-S

CB

C s

ee n

o m

erit

in B

C H

ydro

’s e

xplo

ring

the

Sea

sona

l R

ate

furth

er. W

e un

ders

tand

that

the

ques

tion

is w

heth

er B

C

Hyd

ro s

houl

d co

ntin

ue to

con

side

r a S

easo

nal R

ate

stru

ctur

e th

at

is s

omeh

ow d

esig

ned

to m

oder

ate

bill

impa

cts

(of a

two-

step

rate

) fo

r ele

ctric

spa

ce h

eatin

g cu

stom

ers.

Giv

en th

at B

C H

ydro

ap

pare

ntly

is n

ot a

ble

to d

efin

e an

d de

term

ine

(for t

he 1

.7 m

illio

n ac

coun

ts) t

he c

ateg

ory

of e

lect

ric s

pace

hea

ting

cust

omer

, the

re

are

few

if a

ny v

iabl

e w

ays

to li

mit

the

bill

impa

cts

for s

pace

hea

ting

cust

omer

s du

ring

the

win

ter u

sing

the

rate

des

ign

itsel

f. W

e no

te

that

the

“ele

ctric

hea

t cus

tom

er” (

e.g.

, p.4

0) is

a p

rofil

e ba

sed

on

the

RE

US

, and

doe

s no

t ind

icat

e th

at B

C H

ydro

has

relia

ble

data

on

whi

ch a

ccou

nts

are

and

are

not “

elec

tric

heat

ing.

” In

addi

tion,

as

wou

ld b

e ex

pect

ed, w

ith a

reve

nue

neut

ral r

ate

desi

gn, a

ny

twea

k (s

uch

as lo

wer

ing

the

thre

shol

d du

ring

win

ter m

onth

s) is

m

ore

expe

nsiv

e fo

r som

e cu

stom

ers

and

less

exp

ensi

ve fo

r oth

er

cust

omer

s. T

he b

alan

cing

poi

nt b

etw

een

win

ners

and

lose

rs is

ba

sed

prim

arily

on

the

quan

tity

of c

onsu

mpt

ion,

and

to a

less

er

exte

nt th

e de

gree

of s

easo

nal v

aria

bilit

y of

the

cust

omer

’s

cons

umpt

ion.

Bot

h of

thes

e fa

ctor

s ar

e on

ly lo

osel

y re

late

d to

el

ectri

c he

at v

ersu

s no

n-el

ectri

c he

at s

tatu

s.

Ano

ther

pro

blem

with

tryi

ng to

use

the

resi

dent

ial r

ate

stru

ctur

e to

re

duce

the

bill

impa

cts

of a

two-

step

rate

on

elec

tric

spac

e he

atin

g cu

stom

ers

is th

at, i

n pr

inci

ple,

it is

dur

ing

the

win

ter m

onth

s th

at

BC

Hyd

ro’s

resi

dent

ial p

eaks

, and

ther

efor

e it

is d

urin

g th

e w

inte

r th

at th

e pr

ice

sign

al fo

r con

serv

atio

n an

d ef

ficie

ncy

shou

ld b

e th

e hi

gher

, not

low

er, t

han

the

pric

e si

gnal

in th

e no

n-pe

ak m

onth

s.

This

is c

ontra

ry to

the

cons

erva

tion

supp

ortin

g fu

nctio

n of

the

RIB

ra

te, w

hich

BC

SE

A-S

CB

C s

uppo

rt.

C.

BC

Hyd

ro c

oncl

udes

that

a C

usto

mer

Spe

cific

Bas

elin

e R

ate

is n

ot a

via

ble

optio

n.

A

gree

d.

Attachment 2



Page 25 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

11

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

D.

BC

Hyd

ro c

onsi

ders

that

a F

lat R

ate

is in

cons

iste

nt w

ith

gove

rnm

ent p

olic

y an

d pe

rform

s w

orse

rela

tive

to th

e S

Q in

term

s of

effi

cien

cy a

nd fa

irnes

s co

nsid

erat

ions

. B

C H

ydro

ther

efor

e pr

opos

es th

at n

o fu

rther

mod

elin

g is

re

quire

d, a

nd a

sks

for s

take

hold

er c

omm

ent.

BC

SE

A-S

CB

C a

gree

that

BC

Hyd

ro s

houl

d no

t dev

ote

furth

er

reso

urce

s to

war

d m

odel

ing

a re

side

ntia

l fla

t rat

e (a

s co

mpa

red

to

the

exis

ting

two-

step

rate

). Th

e tw

o-st

ep ra

te is

a c

onse

rvat

ion

rate

. Cus

tom

ers

unde

rsta

nd a

nd a

ccep

t the

two-

step

rate

.

E.

BC

Hyd

ro s

eeks

inpu

t on

whe

ther

a R

IB ra

te p

ricin

g pr

inci

ple

shou

ld c

onst

rain

the

Ste

p-2

rate

to e

qual

LR

MC

.

BC

SE

A-S

CB

C th

ink

BC

Hyd

ro’s

exa

min

atio

n of

resi

dent

ial r

ate

stru

ctur

es s

houl

d tre

at th

e co

ncep

t of t

he to

p-tie

r rat

e be

ing

cons

train

ed b

y th

e LR

MC

as

a fa

ctor

, but

not

as

a pr

inci

ple

or a

ha

rd-a

nd-fa

st ru

le, f

or th

ree

reas

ons:

1.

The

LR

MC

cha

nges

from

tim

e to

tim

e, a

nd s

omet

imes

eve

n go

es d

ownw

ard.

Rig

ht n

ow, f

or e

xam

ple,

the

Ste

p 2

rate

exc

eeds

th

e re

cent

ly re

duce

d LR

MC

, yet

ther

e is

app

aren

tly n

o ur

gent

pr

oble

m. I

t cou

ld b

e co

nfus

ing

and

coun

terp

rodu

ctiv

e su

dden

ly to

re

duce

the

Ste

p 2

rate

just

bec

ause

of a

dec

line

in th

e of

ficia

l LM

RC

. 2.

The

BC

Hyd

ro L

RM

C, a

s a

sing

le n

umbe

r (or

rang

e) “a

ppro

ved”

by

cab

inet

acc

epta

nce

of B

C H

ydro

’s IR

P, d

oes

not n

eces

saril

y jib

e w

ith th

e th

eore

tical

bas

is fo

r the

pro

per p

rice

sign

al fo

r co

nser

vatio

n an

d ef

ficie

ncy

purp

oses

. For

exa

mpl

e, a

n “L

RM

C”

that

is d

efin

ed fo

r use

in a

naly

zing

sup

ply-

side

pro

ject

s w

ith

deca

des-

long

tim

e sc

ales

is n

ot n

eces

saril

y su

itabl

e fo

r res

iden

tial

cons

umpt

ion

deci

sion

s th

at a

re a

naly

zed

on th

e ba

sis

of a

pric

e el

astic

ity a

ssum

ptio

n. A

noth

er w

ay to

put

it is

that

ther

e is

no

sing

le

defin

ition

of a

nd m

etho

dolo

gy fo

r det

erm

ing

“LR

MC

.” Th

is is

ill

ustra

ted

by th

e fa

ct th

at th

e LR

MC

in th

e IR

P is

exp

ress

ed a

s a

rang

e, n

ot a

sin

gle

num

ber.

3.

As

long

as

the

aver

age

cost

to th

e cu

stom

er is

low

er th

an th

e av

oide

d co

st o

f ene

rgy

and

capa

city

, the

re c

an b

e ec

onom

ic

inef

ficie

ncie

s th

at a

re n

ot e

limin

ated

mer

ely

by h

avin

g a

two-

step

ra

te w

ith th

e hi

ghes

t ste

p eq

ual t

o th

e av

oide

d co

st.

Attachment 2



Page 26 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

12

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

F.

Are

ther

e co

mpe

lling

reas

ons

to d

epar

t fro

m p

rior

BC

UC

Dec

isio

ns th

at th

e LR

MC

is th

e ap

prop

riate

re

fere

nt to

a S

tep

2 ra

te, a

nd if

so

wha

t is

the

alte

rnat

ive?

The

resp

onse

of B

CS

EA

-SC

BC

dep

ends

on

wha

t is

mea

nt b

y “a

ppro

pria

te re

fere

nt.”

We

cons

ider

the

com

mis

sion

’s p

revi

ous

deci

sion

s to

hav

e be

en b

ased

on

the

conc

ept t

hat t

he S

tep

2 ra

te

shou

ld s

end

the

econ

omic

ally

app

ropr

iate

pric

e si

gnal

, whi

ch a

t the

tim

e of

thos

e de

cisi

ons

the

com

mis

sion

sai

d w

as B

C H

ydro

’s

LRM

C, b

eing

in th

e co

mm

issi

on’s

vie

w B

C H

ydro

’s c

ost o

f ac

quiri

ng c

lean

or r

enew

able

ene

rgy.

We

agre

e th

at th

e te

rm

LRM

C is

a u

sefu

l sho

rthan

d w

ay to

des

crib

e th

e ap

prop

riate

pric

e si

gnal

for t

he R

IB in

the

pres

ent c

onte

xt. I

n th

at s

ense

, the

LR

MC

is

the

“app

ropr

iate

refe

rent

” to

the

Ste

p 2

rate

. H

owev

er, f

or e

xam

ple,

we

don’

t thi

nk th

e co

mm

issi

on’s

pre

viou

s de

cisi

ons

on th

e ap

prop

riate

siz

e of

the

Ste

p 2

rate

sho

uld

be u

sed

with

out f

urth

er c

onsi

dera

tion

to ju

stify

a n

omin

al re

duct

ion

in th

e S

tep

2 ra

te.

Als

o, in

our

vie

w, t

he c

omm

issi

on’s

pre

viou

s S

tep

2 ra

te d

ecis

ions

w

ere

not i

nten

ded

to c

ause

a s

ituat

ion

in w

hich

cap

ping

Ste

p 2

at

LRM

C w

ould

mak

e S

tep

2 lo

wer

than

Ste

p 1.

A

lso,

the

use

of th

e LR

MC

as

an “a

ppro

pria

te re

fere

nt” s

houl

d be

ba

lanc

ed a

gain

st o

ther

prio

ritie

s fo

r the

RIB

rate

, par

ticul

arly

the

goal

of m

axim

izin

g co

st-e

ffect

ive

DS

M.

G.

BC

Hyd

ro s

eeks

inpu

t on

whe

ther

ther

e ar

e co

mpe

lling

re

ason

s to

cha

nge

the

SQ

RIB

thre

shol

d an

d if

so, w

hat

addi

tiona

l ana

lysi

s do

sta

keho

lder

s re

com

men

d (w

ith

reas

ons)

?

The

view

of B

CS

EA

-SC

BC

is th

at th

ere

are

not c

ompe

lling

reas

ons

to c

hang

e th

e st

atus

quo

RIB

thre

shol

d. T

he c

urre

nt th

resh

old

is

unde

rsto

od a

nd a

ccep

ted

by c

usto

mer

s. T

here

is n

o ap

pare

nt

prob

lem

with

the

curr

ent t

hres

hold

. Cha

ngin

g th

e th

resh

old

to

fost

er o

ne le

gitim

ate

purp

ose

wou

ld in

evita

bly

dim

inis

h ac

heiv

emen

t of a

noth

er le

gitim

ate

purp

ose,

and

wou

ld c

ause

cos

ts

asso

ciat

ed w

ith th

e tra

nsiti

on a

nd w

ith re

gain

ing

cust

omer

ac

cept

ance

for t

he n

ew s

tatu

s qu

o.

Attachment 2



Page 27 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

13

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

H.

BC

Hyd

ro s

eeks

inpu

t on

why

BC

Hyd

ro w

ould

mod

el

very

low

thre

shol

ds (5

00, 4

00, o

ther

kW

h/m

o.) a

s th

ey

do n

ot re

flect

typi

cal R

esid

entia

l use

. W

hat i

s th

e ob

ject

ive

basi

s fo

r a v

ery

low

thre

shol

d?

BC

SE

A-S

CB

C d

o no

t pro

pose

that

BC

Hyd

ro m

odel

ver

y lo

w

thre

shol

ds fo

r a tw

o-st

ep R

IB ra

te. T

o be

cle

ar, w

e un

ders

tand

that

th

is is

a d

iffer

ent q

uest

ion

than

whe

ther

the

stat

us q

uo th

resh

old

shou

ld b

e ad

just

ed m

odes

tly u

pwar

d or

dow

nwar

d.

On

the

latte

r top

ic, B

CS

EA

-SC

BC

sug

gest

that

BC

Hyd

ro d

o fu

rther

mod

ellin

g on

mod

est c

hang

es to

the

Ste

p 1/

Ste

p 2

thre

shol

d. F

or e

xam

ple,

it a

ppea

rs th

at th

e po

sitiv

e co

nser

vatio

n co

nseq

uenc

e of

a h

ighe

r thr

esho

ld (p

.60)

may

be

due

at le

ast

partl

y (m

ainl

y?) t

o th

e as

sum

ptio

n of

a S

tep

2 ra

te h

ighe

r tha

n LR

MC

. B

CS

EA

-SC

BC

gen

eral

ly s

uppo

rt th

e id

ea o

f exp

osin

g m

ore,

rath

er

than

few

er, c

usto

mer

s at

leas

t som

e of

the

time

to th

e S

tep

2 ra

te.

To th

e ex

tent

that

a v

ery

low

thre

shol

d m

ight

be

cons

ider

ed in

the

cont

ext o

f a li

fe-li

ne ra

te c

once

pt, w

e ar

e op

en to

hea

ring

from

ot

her s

take

hold

ers

on th

is to

pic

(and

all

othe

r top

ics,

for t

hat

mat

ter)

.

Attachment 2



Page 28 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

14

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

I. B

C H

ydro

see

ks in

put o

n in

crea

sing

or d

ecre

asin

g th

e B

asic

Cha

rge,

and

wha

t add

ition

al a

naly

sis,

if a

ny,

stak

ehol

ders

reco

mm

end

(with

reas

ons)

.

BC

SE

A-S

CB

C o

ppos

e ch

angi

ng th

e ba

sic

char

ge a

t a h

ighe

r rat

e th

an th

e ra

te o

f inf

latio

n. T

he c

urre

nt b

asic

cha

rge

is a

ccep

ted

by

cust

omer

s. T

he m

odel

ed c

hang

es, e

ither

up

or d

own,

pro

duce

littl

e or

no

addi

tiona

l con

serv

atio

n. W

e pa

rticu

larly

opp

ose

rais

ing

the

basi

c ch

arge

, as

it w

ould

redu

ce c

usto

mer

s’ e

xpos

ure

to th

e tw

o-st

ep ra

te th

at is

des

igne

d to

enc

oura

ge c

onse

rvat

ion.

A

lso,

any

cha

nge

to th

e ba

sic/

min

imum

cha

rge

carr

ies

a co

st in

te

rms

of c

usto

mer

edu

catio

n, u

nder

stan

ding

and

acc

epta

nce.

U

nles

s th

e pu

rpos

e of

mak

ing

a ch

ange

is v

ery

clea

r and

su

bsta

ntia

l, a

chan

ge w

ould

not

be

just

ified

. W

e ac

know

ledg

e th

at a

t the

ext

rem

e lo

w e

nd –

i.e.

, zer

o ba

sic/

min

imum

cha

rge

– th

ere

may

be

issu

es c

once

rnin

g th

e sm

all

subs

et o

f cus

tom

ers

who

do

pay

only

the

basi

c/m

inim

um. F

or

exam

ple,

a z

ero

basi

c/m

inim

um c

harg

e m

ay in

duce

cus

tom

ers

to

fail

to te

rmin

ate

thei

r ser

vice

whe

n th

ey o

ther

wis

e w

ould

term

inat

e se

rvic

e, w

hich

mig

ht b

e an

adm

inis

trativ

e pr

oble

m.

Als

o, th

e ba

sic/

min

imum

cha

rge

affe

cts

cust

omer

s w

ith s

easo

nal

occu

panc

y pa

ttern

s co

nsid

erab

ly m

ore

than

it a

ffect

s ot

her

cust

omer

s.

J.

BC

Hyd

ro s

eeks

inpu

t on

deco

uplin

g th

e M

inim

um

Cha

rge

from

the

Bas

ic C

harg

e, in

clud

ing

in re

latio

n to

w

heth

er th

e B

asic

Cha

rge

shou

ld b

e ch

ange

d.

BC

SE

A-S

CB

C s

ee n

o re

ason

to d

ecou

ple

the

min

imum

cha

rge

from

the

basi

c ch

arge

. The

cur

rent

bas

ic/m

inim

um c

harg

e is

ac

cept

ed b

y cu

stom

ers.

Impl

emen

ting

a de

-cou

pled

min

imum

ch

arge

wou

ld in

trodu

ce a

pric

e si

gnal

that

wou

ld c

onfli

ct w

ith th

e R

IB c

onse

rvat

ion

sign

al, w

ith p

ossi

ble

adve

rse

effe

cts

for

cons

erva

tion.

K.

BC

Hyd

ro p

ropo

ses

no fu

rther

mod

elin

g is

requ

ired

in

resp

ect o

f 100

% fi

xed

cost

reco

very

thro

ugh

a B

asic

C

harg

e or

in re

spec

t of e

limin

atin

g al

l for

ms

of fi

xed

char

ges.

Agr

eed.

Attachment 2



Page 29 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

15

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

L.

Wha

t add

ition

al a

naly

sis,

if a

ny, d

o st

akeh

olde

rs

reco

mm

end

(with

reas

ons)

?

It w

ould

be

usef

ul to

hav

e in

form

atio

n on

the

char

acte

ristic

s of

the

cust

omer

s w

ho p

ay o

nly

the

basi

c/m

inim

um c

harg

e. H

ow m

any

are

ther

e? F

or h

ow m

any

mon

ths

in a

row

do

they

pay

onl

y th

e ba

sic/

min

imum

cha

rge?

Wha

t are

the

seas

onal

pat

tern

s? A

re th

ere

any

parti

cula

r cos

ts to

BC

Hyd

ro a

ssoc

iate

d w

ith th

ese

cust

omer

s?

M.

BC

Hyd

ro p

ropo

ses

that

the

LRM

C fo

r RIB

rate

-mak

ing

not i

nclu

de a

cap

acity

val

ue to

be

adde

d to

the

LRM

C

(ene

rgy)

. Wha

t are

sta

keho

lder

s’ v

iew

s on

the

conc

ept?

BC

SE

A-S

CB

C th

ink

that

the

Ste

p 2

rate

sho

uld,

bar

ring

exce

ptio

nal c

ircum

stan

ces,

be

base

d on

the

avoi

ded

cost

of

elec

trici

ty s

avin

gs d

ue to

the

two-

step

rate

, whi

ch s

houl

d in

gen

eral

re

flect

the

avoi

ded

cost

of b

oth

ener

gy a

nd c

apac

ity. T

o th

e ex

tent

th

at “t

he L

RM

C” i

s de

fined

as

stric

tly a

n en

ergy

cos

t the

n th

is

wou

ld m

ean

addi

ng a

void

ed c

apac

ity c

osts

to th

e av

oide

d en

ergy

co

sts.

N

. B

C H

ydro

see

ks s

take

hold

er fe

edba

ck o

n th

e re

ason

s w

hy B

C H

ydro

wou

ld p

ursu

e V

olun

tary

TO

U fo

r R

esid

entia

l cus

tom

ers.

Our

vie

w is

that

man

dato

ry ti

me

of u

se ra

tes

shou

ld b

e co

nsid

ered

. V

olun

tary

resi

dent

ial T

OU

rate

s w

ould

hav

e m

inim

al b

enef

its.

Attachment 2



Page 30 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

16

Add

ition

al C

omm

ents

, Ite

ms

you

thin

k sh

ould

be

in-s

cope

, not

cur

rent

ly id

entif

ied:

BC

Hyd

ro d

efer

red

(p.1

9) B

CS

EA

-SC

BC

’s s

ugge

stio

n th

at ra

te d

esig

n fo

r cha

rgin

g fo

r ele

ctric

veh

icle

s be

con

side

red

in th

is ra

te

desi

gn p

roje

ct. B

C H

ydro

sai

d it

is p

repa

red

to m

eet w

ith B

CS

EA

, and

suc

h a

mee

ting

is in

the

wor

ks. B

C H

ydro

“not

es th

at E

V lo

ad

is n

ot m

ater

ial i

n th

e fir

st 1

0 ye

ars

of th

e 20

13 lo

ad fo

reca

st...

” Tha

t may

be

true,

but

our

vie

w is

that

it is

ver

y im

porta

nt th

at B

C

Hyd

ro p

ut in

pla

ce ra

te m

echa

nism

s de

sign

ed to

mee

t the

uni

que

need

s of

EV

cha

rgin

g lo

ng b

efor

e E

V lo

ad b

ecom

es a

mat

eria

l po

rtion

of t

he to

tal l

oad.

BC

Hyd

ro c

ould

pla

y a

valu

able

role

in h

elpi

ng to

redu

ce G

HG

em

issi

ons

in B

C b

y fa

cilit

atin

g th

e ad

optio

n of

E

Vs

thro

ugh

impl

emen

ting

prac

tical

EV

cha

rgin

g ra

tes

mec

hani

sms.

B

CS

EA

-SC

BC

sup

port

a lif

e-lin

e ra

te o

r som

e ot

her m

echa

nism

to le

ssen

the

impa

ct o

f ris

ing

resi

dent

ial e

lect

ricity

rate

s on

low

-in

com

e cu

stom

ers.

If th

e B

CU

C is

pre

vent

ed b

y st

atut

e fro

m a

ppro

ving

suc

h a

rate

, the

n B

C H

ydro

cou

ld d

evel

op o

ptio

ns a

nd

iden

tify

the

legi

slat

ive

chan

ges

that

wou

ld b

e re

quire

d to

impl

emen

t the

m.

BC

SE

A-S

CB

C s

uppo

rt ta

king

a c

autio

us a

ppro

ach

to a

ny c

hang

es to

the

stat

us q

uo R

IB d

esig

n. W

e be

lieve

it is

impo

rtant

at t

his

time

to re

info

rce

the

cons

iste

ncy

of th

e R

IB ra

te fr

om th

e cu

stom

er’s

per

spec

tive.

The

re s

houl

d be

a h

igh

thre

shol

d of

just

ifica

tion

for

chan

ges

to th

e R

IB.

In B

CS

EA

-SC

BC

’s v

iew

, it w

ould

be

help

ful f

or B

C H

ydro

to a

rticu

late

mor

e cl

early

the

ener

gy c

onse

rvat

ion

goal

s of

the

RIB

rate

. (It

is a

ssum

ed th

at e

nerg

y co

nser

vatio

n is

the

mai

n ra

tiona

le fo

r the

incl

inin

g bl

ock

rate

stru

ctur

e.) B

C H

ydro

sho

uld

expl

ain

the

ener

gy

cons

erva

tion

role

of t

he R

IB ra

te in

rela

tion

to o

ther

ene

rgy

cons

erva

tion

activ

ities

, par

ticul

arly

DS

M p

rogr

ams

and

code

s an

d st

anda

rds.

Thi

s w

ould

giv

e us

eful

con

text

in d

eter

min

ing

the

utili

ty a

nd im

porta

nce

of v

ario

us a

spec

ts o

f the

RIB

. Th

e sc

atte

r dia

gram

on

slid

e 61

see

ms

to s

how

that

all

cust

omer

s w

ould

pay

mor

e if

the

thre

shol

d w

ere

chan

ged

to 6

35 k

Wh

per

mon

th. T

his

need

s ex

plan

atio

n, a

s it

seem

s to

vio

late

reve

nue

neut

ralit

y.

As

an a

side

from

the

RIB

des

ign

itsel

f, B

C H

ydro

sho

uld

cons

ider

rede

sign

ing

the

disp

lay

of in

form

atio

n on

the

bills

it p

rovi

des

to it

s cu

stom

ers.

Thi

s m

ay h

elp

to e

nhan

ce th

e ef

fect

of t

he R

IB ra

te, a

s it

coul

d en

hanc

e cu

stom

er u

nder

stan

ding

of t

he ra

tes

they

are

pa

ying

. Sim

ilarly

for t

he w

eb p

ages

for r

esid

entia

l cus

tom

ers.

The

bill

ing

data

and

ene

rgy

use

data

sec

tions

in p

artic

ular

cou

ld b

e im

prov

ed in

term

s of

the

cust

omer

’s a

bilit

y to

und

erst

and

thei

r ele

ctric

ity u

se o

ver v

aryi

ng ti

me

perio

ds.

Attachment 2



Page 31 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

17

CO

NSE

NT

TO U

SE P

ERSO

NA

L IN

FOR

MA

TIO

N

I con

sent

to th

e us

e of

my

pers

onal

info

rmat

ion

by B

C H

ydro

for t

he p

urpo

ses

of k

eepi

ng m

e up

date

d ab

out t

he 2

015

RD

A. F

or

purp

oses

of t

he a

bove

, my

pers

onal

info

rmat

ion

incl

udes

opi

nion

s, n

ame,

mai

ling

addr

ess,

pho

ne n

umbe

r and

em

ail a

ddre

ss a

s pe

r th

e in

form

atio

n I p

rovi

de.

Sig

natu

re:_

____

___

____

____

___

Dat

e: _

____

__ 2

9 A

ugus

t 201

4 __

____

__

Than

k yo

u fo

r you

r com

men

ts.

Com

men

ts s

ubm

itted

will

be

used

to in

form

the

RD

A S

cope

and

Eng

agem

ent p

roce

ss, i

nclu

ding

dis

cuss

ions

with

Gov

ernm

ent,

and

will

form

par

t of t

he o

ffici

al re

cord

of t

he R

DA

.

You

can

retu

rn c

ompl

eted

feed

back

form

s by

:

Mai

l: B

C H

ydro

, BC

Hyd

ro R

egul

ator

y G

roup

– “A

ttent

ion

2015

RD

A”,

16th F

loor

, 333

Dun

smui

r St.

Van

. B.C

. V6B

-5R

3

Fax

num

ber:

604-

623-

4407

– “A

ttent

ion

2015

RD

A”

Em

ail:

bchy

dror

egul

ator

ygro

up@

bchy

dro.

com

Form

ava

ilabl

e on

Web

: http

://w

ww

.bch

ydro

.com

/abo

ut/p

lann

ing_

regu

lato

ry/re

gula

tory

.htm

l

Any

per

sona

l inf

orm

atio

n yo

u pr

ovid

e to

BC

Hyd

ro o

n th

is fo

rm is

col

lect

ed a

nd p

rote

cted

in a

ccor

danc

e w

ith th

e Fr

eedo

m o

f Inf

orm

atio

n an

d Pr

otec

tion

of P

rivac

y A

ct. B

C H

ydro

is c

olle

ctin

g in

form

atio

n w

ith th

is fo

r the

pur

pose

of t

he 2

015

RD

A in

acc

orda

nce

with

BC

Hyd

ro’s

man

date

un

der t

he H

ydro

and

Pow

er A

utho

rity

Act

, the

BC

Hyd

ro T

ariff

, the

Util

ities

Com

mis

sion

Act

and

rela

ted

Reg

ulat

ions

and

Dire

ctio

ns. I

f you

ha

ve a

ny q

uest

ions

abo

ut th

e co

llect

ion

or u

se o

f the

per

sona

l inf

orm

atio

n co

llect

ed o

n th

is fo

rm p

leas

e co

ntac

t the

BC

Hyd

ro R

egul

ator

y G

roup

vi

a em

ail a

t: bc

hydr

oreg

ulat

oryg

roup

@bc

hydr

o.co

m

Attachment 2



Page 32 of 49

1

2015

RD

A –

Jun

e 25

th, 2

014

RIB

and

Ter

ms

& C

ondi

tions

W

orks

hop

Feed

back

For

m

Nam

e/O

rgan

izat

ion:

Com

men

ts (P

leas

e do

not

iden

tify

third

-par

ty in

divi

dual

s in

you

r co

mm

ents

. C

omm

ents

bea

ring

refe

renc

es to

iden

tifia

ble

indi

vidu

als

will

be

disc

arde

d du

e to

priv

acy

conc

erns

).

Pres

enta

tion

1: E

lect

ric T

ariff

– T

erm

s an

d C

ondi

tions

Upd

ates

and

Cle

an-U

p La

te P

aym

ent C

harg

e –

shou

ld th

e la

te p

aym

ent c

harg

e ap

ply

to a

ll ou

tsta

ndin

g ba

lanc

es o

win

g, n

ot ju

st o

utst

andi

ng

bala

nces

ove

r $30

(i.e

., no

$30

thre

shol

d)?

Yes

and

the

late

pay

men

t cha

rge

shou

ld re

flect

pro

cess

ing

cost

s (i.

e. N

ot n

eces

saril

y lin

ear)

Stan

dard

Cha

rges

- R

econ

nect

ion

Cha

rges

Shou

ld a

gent

cos

ts (o

r a p

ortio

n of

) to

initi

ate

disc

onne

ctio

n pr

oces

s be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Ple

ase

prov

ide

an e

xpla

natio

n fo

r the

am

ount

. Ye

s, in

clud

e ag

ent c

osts

at e

stim

ated

ave

rage

requ

ired

Shou

ld th

e re

mot

e di

scon

nect

/reco

nnec

t (R

DR

) sw

itch

and

rela

ted

Info

rmat

ion

Tech

nolo

gy (I

T) c

osts

(or a

por

tion

of) f

or

the

disc

onne

ctio

n be

incl

uded

? If

a po

rtion

, wha

t per

cent

age?

Pl

ease

pro

vide

an

expl

anat

ion

for t

he a

mou

nt.

Yes,

incl

ude

switc

h an

d IT

cos

ts p

ropo

rtion

al to

est

imat

ed fu

nctio

n us

e of

sw

itch

and

IT c

apab

ilitie

s

Shou

ld th

e m

anua

l dis

conn

ectio

n co

sts

(or a

por

tion

of) b

e in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

. Ye

s, m

anua

l dis

conn

ect c

ost s

houl

d be

incl

uded

Attachment 2



Page 33 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

2

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Shou

ld a

gent

cos

ts (o

r a p

ortio

n of

) to

initi

ate

the

reco

nnec

tion

proc

ess

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

exp

lana

tion

for t

he a

mou

nt.

Yes,

incl

ude

agen

t cos

t to

initi

ate

reco

nnec

tion

at e

stim

ated

av

erag

e re

quire

d

Shou

ld IT

cos

ts (o

r a p

ortio

n of

) for

sel

f-ser

vice

reco

nnec

tion

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

.

Yes,

IT c

ost s

houl

d be

incl

uded

at p

ropo

rtion

est

imat

ed b

ased

on

use

of IT

cap

abilit

ies

Shou

ld th

e R

DR

sw

itch

and

rela

ted

IT c

osts

(or a

por

tion

of) f

or

the

reco

nnec

tion

be in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e?

Plea

se p

rovi

de a

n ex

plan

atio

n fo

r the

am

ount

.

Yes,

RD

R s

witc

h an

d IT

cos

t sho

uld

be in

clud

ed a

t pro

porti

on

estim

ated

bas

ed o

n us

e of

sw

itch

and

IT c

apab

ilitie

s

Shou

ld th

e m

anua

l rec

onne

ctio

n co

sts

(or a

por

tion

of) b

e in

clud

ed?

If a

porti

on, w

hat p

erce

ntag

e? P

leas

e pr

ovid

e an

ex

plan

atio

n fo

r the

am

ount

. Ye

s, m

anua

l rec

onne

ctio

n co

st s

houl

d be

incl

uded

Shou

ld a

n av

erag

e re

conn

ectio

n ch

arge

for r

emot

e an

d m

anua

l di

scon

nect

ions

be

used

? Ye

s, s

peci

fic c

ostin

g w

ould

be

adm

inis

trativ

ely

cost

ly

Shou

ld th

ere

be a

diff

eren

t rec

onne

ctio

n ch

arge

for c

usto

mer

s m

ovin

g in

to d

isco

nnec

ted

unsi

gned

pre

mis

es?

N

o, c

harg

es s

houl

d be

sta

ndar

dize

d

Stan

dard

Cha

rges

- N

ew M

isce

llane

ous

Cha

rges

Acco

unt C

harg

e –

shou

ld a

diff

eren

t fee

be

char

ged

for t

he s

et-

up o

f new

cus

tom

ers?

Ye

s, if

cos

ts s

igni

fican

tly d

iffer

ent,

othe

rwis

e bl

end

into

sin

gle

Acco

unt C

harg

e

Acco

unt C

harg

e –

shou

ld a

dis

coun

t be

offe

red

for c

usto

mer

s pr

oces

sing

the

acco

unt m

ove

thro

ugh

the

on-li

ne c

hann

el?

Yes,

if s

avin

gs o

f cus

tom

er s

elf-s

ervi

ce p

roce

sses

are

mea

ning

ful

Attachment 2



Page 34 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

3

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

Non

-Pay

men

t Rep

ort C

harg

e –

if th

e re

conn

ectio

n ch

arge

is

sign

ifica

ntly

redu

ced,

sho

uld

ther

e be

a c

harg

e fo

r rep

orte

d pa

ymen

ts n

ot re

ceiv

ed a

s a

mea

ns o

f det

errin

g be

havi

our?

Ye

s

Cre

dit C

ard

Cha

rges

– s

houl

d cr

edit

card

pay

men

ts b

e ac

cept

ed a

nd in

clud

e fe

es in

gen

eral

rate

s?

Yes

Cre

dit C

ard

Cha

rges

– s

houl

d cr

edit

card

pay

men

ts b

e ac

cept

ed b

ut o

nly

if ab

le to

pas

s on

fees

to c

usto

mer

s us

ing

paym

ent c

hann

el?

No,

faci

litat

ing

paym

ent m

etho

ds a

nd c

hann

els

is h

elpf

ul to

cas

h flo

w a

nd to

all

cust

omer

s

Pres

enta

tion

2 - R

esid

entia

l inc

linin

g B

lock

(RIB

) and

ot

her p

oten

tial r

esid

entia

l rat

e is

sues

A.

Shou

ld B

C H

ydro

con

tinue

to c

onsi

der a

Thr

ee S

tep

Rat

e an

d if

so, w

hat a

dditi

onal

ana

lysi

s do

sta

keho

lder

s re

com

men

d (w

ith re

ason

s)?

BC H

ydro

sho

uld

cons

ider

a s

moo

th tr

ansi

tion

form

ula

rate

to

avoi

d th

resh

old

disc

ontin

uity

B.

Shou

ld B

C H

ydro

con

tinue

to c

onsi

der a

Sea

sona

l Rat

e st

ruct

ure

and

if so

, wha

t add

ition

al a

naly

sis

do

stak

ehol

ders

reco

mm

end

(with

reas

ons)

?

Yes

C.

BC H

ydro

con

clud

es th

at a

Cus

tom

er S

peci

fic B

asel

ine

Rat

e is

not

a v

iabl

e op

tion.

BC H

ydro

sho

uld

have

a fu

ll di

scus

sion

of c

usto

mer

con

cern

s ab

out u

nfai

rnes

s an

d po

tent

ial s

olut

ions

Attachment 2



Page 35 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

4

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

D.

BC H

ydro

con

side

rs th

at a

Fla

t Rat

e is

inco

nsis

tent

with

go

vern

men

t pol

icy

and

perfo

rms

wor

se re

lativ

e to

the

SQ in

term

s of

effi

cien

cy a

nd fa

irnes

s co

nsid

erat

ions

. BC

Hyd

ro th

eref

ore

prop

oses

that

no

furth

er m

odel

ing

is

requ

ired,

and

ask

s fo

r sta

keho

lder

com

men

t.

BC H

ydro

sho

uld

cons

ider

effi

cien

cy ra

ted

flat r

ate,

as

an

alte

rnat

ive

(like

ly a

s a

pilo

t ini

tially

)

E.

BC H

ydro

see

ks in

put o

n w

heth

er a

RIB

rate

pric

ing

prin

cipl

e sh

ould

con

stra

in th

e St

ep-2

rate

to e

qual

LR

MC

.

No.

Alte

rnat

ive

with

hig

her p

rice

sign

als

may

be

valid

opt

ions

to

cons

ider

F.

Are

ther

e co

mpe

lling

reas

ons

to d

epar

t fro

m p

rior

BCU

C D

ecis

ions

that

the

LRM

C is

the

appr

opria

te

refe

rent

to a

Ste

p 2

rate

, and

if s

o w

hat i

s th

e al

tern

ativ

e?

Yes,

whe

re e

ffici

ency

rate

d ra

tes

may

be

deve

lope

d it

may

be

usef

ul to

incr

ease

ince

ntiv

es to

ado

pt e

ffici

ency

G.

BC H

ydro

see

ks in

put o

n w

heth

er th

ere

are

com

pellin

g re

ason

s to

cha

nge

the

SQ R

IB th

resh

old

and

if so

, wha

t ad

ditio

nal a

naly

sis

do s

take

hold

ers

reco

mm

end

(with

re

ason

s)?

Yes.

Thr

esho

lds

that

impr

ove

cons

erva

tion

and

effic

ienc

y sh

ould

be

exa

min

ed a

s al

tern

ativ

es.

H.

BC H

ydro

see

ks in

put o

n w

hy B

C H

ydro

wou

ld m

odel

ve

ry lo

w th

resh

olds

(500

, 400

, oth

er k

Wh/

mo.

) as

they

do

not

refle

ct ty

pica

l Res

iden

tial u

se.

Wha

t is

the

obje

ctiv

e ba

sis

for a

ver

y lo

w th

resh

old?

If th

ey re

flect

effi

cien

t use

livi

ng a

nd n

ot ty

pica

l use

then

pro

vidi

ng

pric

e si

gnal

sup

port

may

be

usef

ul

I. BC

Hyd

ro s

eeks

inpu

t on

incr

easi

ng o

r dec

reas

ing

the

Basi

c C

harg

e, a

nd w

hat a

dditi

onal

ana

lysi

s, if

any

, st

akeh

olde

rs re

com

men

d (w

ith re

ason

s).

BC H

ydro

sho

uld

cons

ider

a s

ubst

antia

l bas

is c

harg

e re

flect

ing

acce

ss to

ele

ctric

ity c

osts

, the

n ex

cept

nor

mal

use

rs th

ereb

y in

clud

ing

it al

l in

ener

gy c

harg

e bu

t lea

ving

cha

rge

in fo

r per

iodi

c us

e or

no

use

conn

ectio

n

Attachment 2



Page 36 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

5

C

omm

ents

(Ple

ase

do n

ot id

entif

y th

ird-p

arty

indi

vidu

als

in y

our

com

men

ts.

Com

men

ts b

earin

g re

fere

nces

to id

entif

iabl

e in

divi

dual

s w

ill b

e di

scar

ded

due

to p

rivac

y co

ncer

ns).

J.

BC H

ydro

see

ks in

put o

n de

coup

ling

the

Min

imum

C

harg

e fro

m th

e Ba

sic

Cha

rge,

incl

udin

g in

rela

tion

to

whe

ther

the

Basi

c C

harg

e sh

ould

be

chan

ged.

BC

Hyd

ro s

houl

d lo

ok a

t com

bini

ng a

ll th

ese

conc

epts

into

Acc

ess

Cha

rge

K.

BC H

ydro

pro

pose

s no

furth

er m

odel

ing

is re

quire

d in

re

spec

t of 1

00%

fixe

d co

st re

cove

ry th

roug

h a

Basi

c C

harg

e or

in re

spec

t of e

limin

atin

g al

l for

ms

of fi

xed

char

ges.

BC H

ydro

sho

uld

not n

eed

to lo

ok a

t elim

inat

ing

all f

orm

s of

fixe

d ch

arge

L.

Wha

t add

ition

al a

naly

sis,

if a

ny, d

o st

akeh

olde

rs

reco

mm

end

(with

reas

ons)

?

BC H

ydro

sho

uld

look

at c

usto

mer

opt

ions

to p

artic

ipat

e in

futu

re

cons

erva

tion

and

effic

ienc

y pi

lot p

rogr

ams.

M.

BC H

ydro

pro

pose

s th

at th

e LR

MC

for R

IB ra

te-m

akin

g no

t inc

lude

a c

apac

ity v

alue

to b

e ad

ded

to th

e LR

MC

(e

nerg

y). W

hat a

re s

take

hold

ers’

vie

ws

on th

e co

ncep

t?

LRM

C fo

r RIB

sho

uld

incl

ude

capa

city

cos

ts.

RIB

acc

ount

s ar

e th

e fu

ndam

enta

l driv

er o

f pea

k ca

paci

ty re

quire

men

ts in

the

syst

em

N.

BC H

ydro

see

ks s

take

hold

er fe

edba

ck o

n th

e re

ason

s w

hy B

C H

ydro

wou

ld p

ursu

e Vo

lunt

ary

TOU

for

Res

iden

tial c

usto

mer

s.

BC H

ydro

sho

uld

look

to v

olun

tary

TO

U a

s a

mea

ns o

f pilo

ting

into

co

ntro

ls te

chno

logy

whi

ch c

ould

mak

e th

is a

via

ble

sour

ce o

f pea

k ca

paci

ty in

the

futu

re

Attachment 2



Page 37 of 49

June

25th

2014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

6

Add

ition

al C

omm

ents

, Ite

ms

you

thin

k sh

ould

be

in-s

cope

, not

cur

rent

ly id

entif

ied:

Attachment 2



Page 38 of 49

Ju

ne 2

5th 2

014

RIB

and

Ter

ms

& C

ondi

tions

Wor

ksho

p Fe

edba

ck F

orm

7

CO

NSE

NT

TO U

SE P

ERSO

NAL

INFO

RM

ATIO

N

I con

sent

to th

e us

e of

my

pers

onal

info

rmat

ion

by B

C H

ydro

for t

he p

urpo

ses

of k

eepi

ng m

e up

date

d ab

out t

he 2

015

RD

A. F

or

purp

oses

of t

he a

bove

, my

pers

onal

info

rmat

ion

incl

udes

opi

nion

s, n

ame,

mai

ling

addr

ess,

pho

ne n

umbe

r and

em

ail a

ddre

ss a

s pe

r th

e in

form

atio

n I p

rovi

de.

Sign

atur

e:__

____

____

____

____

____

____

____

____

____

____

____

___

Dat

e: _

____

____

____

____

____

____

___

Than

k yo

u fo

r you

r com

men

ts.

Com

men

ts s

ubm

itted

will

be u

sed

to in

form

the

RD

A Sc

ope

and

Enga

gem

ent p

roce

ss, i

nclu

ding

dis

cuss

ions

with

Gov

ernm

ent,

and

will

form

par

t of t

he o

ffici

al re

cord

of t

he R

DA.

You

can

retu

rn c

ompl

eted

feed

back

form

s by

:

Mai

l: BC

Hyd

ro, B

C H

ydro

Reg

ulat

ory

Gro

up –

“Atte

ntio

n 20

15 R

DA”

, 16th

Flo

or, 3

33 D

unsm

uir S

t. Va

n. B

.C. V

6B-5

R3

Fax

num

ber:

604-

623-

4407

– “A

ttent

ion

2015

RD

A”

Emai

l: bc

hydr

oreg

ulat

oryg

roup

@bc

hydr

o.co

m

Form

ava

ilabl

e on

Web

: http

://w

ww

.bch

ydro

.com

/abo

ut/p

lann

ing_

regu

lato

ry/re

gula

tory

.htm

l

Any

pers

onal

info

rmat

ion

you

prov

ide

to B

C H

ydro

on

this

form

is c

olle

cted

and

pro

tect

ed in

acc

orda

nce

with

the

Free

dom

of I

nfor

mat

ion

and

Prot

ectio

n of

Priv

acy

Act

. BC

Hyd

ro is

col

lect

ing

info

rmat

ion

with

this

for t

he p

urpo

se o

f the

201

5 R

DA

in a

ccor

danc

e w

ith B

C H

ydro

’s m

anda

te

unde

r the

Hyd

ro a

nd P

ower

Aut

horit

y A

ct, t

he B

C H

ydro

Tar

iff, t

he U

tiliti

es C

omm

issi

on A

ct a

nd re

late

d R

egul

atio

ns a

nd D

irect

ions

. If y

ou

have

any

que

stio

ns a

bout

the

colle

ctio

n or

use

of t

he p

erso

nal i

nfor

mat

ion

colle

cted

on

this

form

ple

ase

cont

act t

he B

C H

ydro

Reg

ulat

ory

Gro

up

via

emai

l at:

bchy

dror

egul

ator

ygro

up@

bchy

dro.

com

Attachment 2



Page 39 of 49

Attachment 2



Page 40 of 49

Attachment 2



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Page 42 of 49

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Attachment 2



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Attachment 2



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Page 48 of 49

Attachment 2



Page 49 of 49





Attachment 3

Allocation of BC Hydro’s Heritage Resources

Attachment 3



Page 1 of 2

COPE 378 in its written comments submits that the key underlying issue for the

2015 RDA is how to allocate the benefit of BC Hydro’s low cost Heritage resources in

an efficient and equitable manner among BC Hydro’s customer classes. COPE 378

goes on to describe its proposal for allocation, which as BC Hydro understands it, would

consist of a “customer credit” to be allocated based on specific criteria such as location,

dwelling type, household size and income.

BC Hydro takes the opportunity to summarize the position it has taken to date on the

allocation of the Heritage resources, as reflected in 2007 RDA-related submissions and

other filings.

Policy Action No. 1 of the 2002 Energy Plan recognizes that BC Hydro’s Heritage

resources represent a valuable asset. As the Commission noted in its 2007 RDA

Decision, the Government acted through the BC Hydro Public Power Legacy And

Heritage Contract Act to ensure that electricity generated by the Heritage resources

continues to be available to BC Hydro’s customers based on cost of service, not market

prices.1 The resulting Heritage Contract is found at Appendix A to Direction No. 7 to the

Commission. The Heritage Contract has been in place since 2003 and is legislated in

perpetuity.2

There are a number of important elements to the Heritage Contract scheme for

purposes of the 2015 RDA:

• The first and most important is that BC Hydro’s rates are established on a cost of

service basis (section 5(d) of Direction No. 7), which means BC Hydro’s

customers get the full benefit of the Heritage resources

• An important corollary element is the principle that new customers should be able

to benefit from the Heritage resources, as shown in Schedule B to the Terms of

1 2007 RDA Decision, page 8.

2 Order in Council 849/2008 (8 November 2008).

Attachment 3



Page 2 of 2

Reference attached to the Commission’s October 17, 2003 Report and

Recommendations.3

In BC Hydro’s view, the Commission is left with considerable discretion to design rates

for BC Hydro’s customers that balance the competing interests of different customer

groups, and to allocate the benefits of the Heritage resources between customer

classes subject to the elements identified above.

In BC Hydro’s embedded COS study, the costs of both Heritage resource energy and

non-Heritage resource energy are allocated to the customer classes based on the

energy consumption and peak demand of each customer class. As a result, each class

receives a share of the benefits of the Heritage resources based on the class’ share of

total consumption and peak demand.

It is not clear to BC Hydro how COPE 378’s proposal would re-distribute the benefits of

the Heritage resources. BC Hydro is unable to provide any further substantive comment

in regard to the proposal in the absence of an explanation of what the proposal is

specifically trying to achieve and how it would work.

3 In the Matter of British Columbia Hydro and Power Authority: An Inquiry into a Heritage Contract for British Columbia Hydro and Power Authority’s Existing Generation

Resources and Regarding Stepped Rates and Transmission Access, Report and Recommendations, 17 October 2003; available at

http://www.bcuc.com/Documents/Decisions/2003Dec/Heritage%20LGIC%20Rpt-Recommend.pdf.

http://www.bcuc.com/Documents/Decisions/2003Dec/Heritage%20LGIC%20Rpt-Recommend.pdf