BCUC Issues Decision for FortisBC Energy Inc.’s 2022 Delivery Rates
December 13, 2021
VANCOUVER – On December 10, 2021, the British Columbia Utilities Commission (BCUC) issued its decision on FortisBC Energy Inc.’s (FEI) Annual Review for 2022 Delivery Rates application. The BCUC approved an increase of 8.07 percent for delivery rates, effective January 1, 2022, subject to final adjustments.
Delivery rates cover the cost of maintaining FEI’s natural gas system and delivering natural gas service to its customers across British Columbia (BC). These costs are separate from the commodity charge for natural gas on customer bills.
The BCUC conducted an open and transparent public review process to review FEI’s application. After reviewing the evidence and arguments filed in the proceeding and during a virtual workshop, the BCUC determined that FEI’s proposed delivery rates were just and reasonable.
According to FEI’s application, approximately half of the increase to 2022 rates is due to the elimination of an accumulated revenue surplus from previous years. In 2021, FEI applied all of the remaining surplus to reduce the increase to 2021 delivery rates. The remaining increase to 2022 rates is due to higher amortization of FEI’s deferral accounts, financing costs, return on equity, and capital asset depreciation due to increased investments for necessary updates and additions to FEI’s natural gas system.
By Order G-366-21, the BCUC also approved FEI’s deferral account and rate rider requests, and Core Market Administration Expense budget. The BCUC did not approve FEI’s request to establish a deferral account for its Regional Gas Supply Diversity Project Development, as the account was determined not to be in the public interest at this time. FEI is expected to provide more information about the project in a separate application to the BCUC in early 2022.
For more information about FEI’s application or the BCUC’s decision, please visit the proceeding page.
On June 22, 2020, the BCUC approved a multi-year rate plan (MRP) for FEI covering a five-year period from 2020 to 2024. The MRP uses a performance or incentive-based regulatory rate setting framework which links utility rates to performance, rather than to the recovery of the operating and capital costs of service. As outlined in the BCUC’s decision, an annual review process is required to set FEI’s delivery rates for each year of the MRP.
About the BCUC
The BCUC is an independent regulatory body, responsible for regulating BC’s energy utilities, as well as its compulsory automobile insurance rates, and intra-provincial pipelines rates. The BCUC is also responsible for administering BC’s Fuel Price Transparency Act. It is the BCUC’s role to balance the interests of customers with the interests of the businesses it regulates. The BCUC carries out fair and transparent reviews of matters within its jurisdiction and considers public input where public interest is impacted.
Krissy Van Loon