1.0 electric tariff 1.1 covid relief fund for residential ... … · 1.0 electric tariff 1.1 covid...

BC Hydro COVID-19 Customer Relief Program Application BCUC Questions to BC Hydro

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1.0 Electric Tariff

1.1 COVID Relief Fund for Residential Customers

Under section 1.2, the “COVID Relief Fund for Residential Customers Grant” is defined as “(a) credit issued by BC Hydro, in its discretion, to a qualifying Residential Service Customer to that Customer’s BC Hydro Residential Service account.” On page 3 of the Application, BC Hydro states:

For information, as there is no upper limit on energy consumption for accounts served under Residential Service, there are some large consumption accounts that take Residential Service for electricity end uses that fall outside typical residential household use. Therefore, BC Hydro intends to restrict eligibility of the COVID Relief Fund for Residential Customers to Residential Service Customers with consumption no greater than approximately three times the average monthly Residential Service account consumption. Based on this, Residential Service Customers with average monthly consumption above 2,500 kWh/month will not be eligible to participate in this new program. Otherwise, all Residential Service Customers taking service under BC Hydro Rate Schedules 1101, 1105, 1107, 1121, 1127, 1148, 1151 and 1161 that have consumption under the maximum monthly threshold will be eligible to apply. [Emphasis added]

In the Government of BC’s News Release, it states:1

Residential customers who have lost their jobs, or are unable to work as a result of COVID-19, will receive a bill credit of three times their average monthly bill. The credit does not need to be repaid.

BC Hydro will implement a streamlined application process, requiring customers to provide only proof of job loss or inability to work due to COVID-19.

Questions:

• How will BC Hydro determine that the residential customer lost his/her job or can’t work due to COVID? Will there be an audit process similar to what is currently done for the Customer Crisis Fund Program?

• Please clarify where is it specified in the Electric Tariff that Residential Service Customers with average monthly consumption above 2,500 kWh/month will not be eligible to participate in this new program?

• Please discuss how BC Hydro will make a distinction for customers who have had previous bills in arrears and/or who have been disconnected prior to April 1 for reasons other than Covid-19 related impacts.

1.2 Consent to waive charges to small commercial customers

In section 3 of the Application, on pages 4-5, BC Hydro in reference to the BC Government’s news release states that small businesses that have been forced to close due to COVID-19 will have their power bills forgiven for up to three months.

1 Application, Appendix B, p. 3.

A-2

Yvonne.Lapierre

COVID-19-Customer Relief Program

BC Hydro COVID-19 Customer Relief Program Application BCUC Questions for BC Hydro

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BC Hydro also states that it will exclude certain Small General Service accounts that do not fall within the commonly understood definition of small business, for example government agencies, public and private schools (including post-secondary), large retail and national companies, strata corporations, and unmetered services. Questions:

• Please clarify how BC Hydro will determine whether a small business has been “forced to close due to COVID-19”. Is there a definition or eligibility criteria of such in the Electric Tariff?

• Please specify where in the Electric Tariff the definition or criteria is provided to exclude certain Small General Service accounts from the COVID-19 relief.

• Please clarify whether the BC Government’s news release or OIC 159/20 provides that certain Small General Service accounts such as the customers as BC Hydro described above will be excluded from the COVID-19 relief.

• If the eligibility criteria for the affected rate classes (e.g. residential and commercial accounts) are not specified in OIC 159/20 or in BC Hydro’s application at this time, is BC Hydro planning to file an addendum to the Application for BCUC review and determination after April 8, 2020?

2.0 Tariff Supplement No. 90 – Mining Customer Payment Plan

2.1 Balance transfers to TS 90

Section 1.1(a) defines “Account Balance” as “= (TSA + I + T) – (TAA + A)”; where “’T’ means, if applicable, any Mining Customer’s balance of payments owing transferred in accordance with Tariff Supplement No. 99;” Question: Please explain why only customer balances from TS 99 can be transferred to TS 90? Why not customer balances from TS 97 and TS 98? Section 3(3)(c) requires BC Hydro to seek approval to defer to the Mining Customer Payment Plan Regulatory Account “any other amounts that are payable to BC Hydro by those eligible industrial customers, if those amounts are impaired.” Questions:

• What are the balances of these impairment amounts as of March 31, 2020?

• Please discuss whether there could be balances impaired and payable to BC Hydro that are not related to the Covic-19 pandemic.


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3.0 Tariff Supplement No. 97 – RS 1823 and RS 1823 Customer Payment Plan

3.1 Enrollment deadline

In section 1.1 (f), the “Closing Date” means June 21, 2020. In section 1.1 (d), the “Application Period” ends on the Closing Date or such earlier date on which the Payment Plan Agreement for the Participating Customer is terminated. Questions:

• When does a customer have to enter into the “Payment Plan Agreement” by, is it June 21, 2020, the Closing Date?

• Does the TS No. 97 automatically become in effect if the customer does not pay their bill in full?

3.2 Interest rates

Floating interest rate 1 = i = prime + 2.5% (applied until June 21, 2020) Floating interest rate 2 = i = prime + 5.0% (June 21, 2020 onwards until account balance reaches zero)

Questions:

• How are the premiums determined? Are they consistent with other provisions in BC Hydro’s tariffs? Are

they reflective of certain risks?

3.3 Deferred bill estimates

Eligible customer may only defer up to 50% of their bill to pay at a future date. The customer may also make additional payment to pay back early if they wish, without any interest penalties. (Sections 2.2 to 2.4, p. 7) Questions:

• What is BC Hydro’s estimate of the minimum, median, average, and maximum amounts to be deferred?

• Does BC Hydro have any cash flow concerns? Will be BC Hydro make additional financial arrangements

to match the cashflow of these customers?

3.4 Section 3.2 – Termination

Section 3.2 (ii) states that if the Participating Customer sells, transfers or assigns all or substantially all of its interest in the Customer’s Plant, then the unpaid amounts will become due and payable. Questions:

• Is any unpaid amount due immediately for the new buyer? If so, why is this provision made?

• What is “substantially all” mean? Does BC Hydro have a threshold? [Note that 50% control is already

discussed in section 3.2 (iv)]


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4.0 Tariff Supplement No. 98 – Coal Mining Customer Payment Plan


Section 2.1 (a) (i) says that the customer must request BC Hydro to enter into the payment plan agreement by April 30, 2020 or by a later date as agreed to by BC Hydro. Question:

• Why is RS 1611 different than the treatment of RS 1823/1828, which the timeline appears to be June 21, 2020?

4.2 Interest rates

Floating interest rate 1 = i = prime + 2.5% (applied until June 21, 2020) Floating interest rate 2 = i = prime + 5.0% (June 21, 2020 onwards until account balance reaches zero)

Questions:

• How are the premiums determined? Are they consistent with other provisions in BC Hydro’s tariffs? Are they reflective of certain risks?

4.3 Rationale for Adjusted Amount formula

Section 2.3 sets out a formula for an Adjusted Amount, where Adjusted Amount = SA + (SA x AP). BC Hydro provides definitions for SA and AP in section 2.3. Questions:

• What do SA and AP stand for?

• AP means [(settlement price – 134) x 5]/100. What is the rationale behind this formula? What is the rationale behind the +/- 0.75 threshold for the AP?


Eligible customer may only defer up to 50% of their bill to pay at a future date, or the Adjusted Amount calculations as noted above. The customer may also make additional payment to pay back early if they wish, without any interest penalties. (Sections 2.2 to 2.5, pp. 8-9)

Questions:


• Does BC Hydro have any cash flow concerns? Will BC Hydro make additional financial arrangements to match the cashflow of these customers? (Note there are only 2 mine sites in RS 1611, however, the magnitude of these RS 1611 bills is unknown)


Section 3.2 (ii) states that if the Participating Customer sells, transfers or assigns all or substantially all of its interest in the Applicable Mine, then the unpaid amounts will become due and payable.


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Questions:


• What is “substantially all” mean? Does BC Hydro have a threshold? [Note that 50% control is already covered off in section 3.2 (iv)]

5.0 Tariff Supplement No. 99 – Copper Mining Customer Payment Plan

5.1 Reference for Payment Plan Agreement

In section 1.1 (r) of OIC 159/20 and BC Hydro’s Application, it states:

“Payment Plan Agreement” means a Payment Plan Agreement attached as Appendix 1 to Tariff Supplement No. 97

Question:

• Please confirm the reference to TS No. 97 should instead be “Appendix 1 to Tariff Supplement No. 99”. If not confirmed, please explain otherwise.


Section 2.1 (a) (i) says that the customer must request BC Hydro to enter into the payment plan agreement by April 30, 2020 or by a later date as agreed to by BC Hydro. Question:

• Why is a Copper Mining RS 1823 customer differently treated than all other RS 1823 or RS1828 customers, for which the timeline appears to be June 21, 2020?

5.3 Interest rates

Floating interest rate 1 = i = prime + 2.5% (applied until June 21, 2020) Floating interest rate 2 = i = prime + 5.0% (June 21, 2020 onwards until account balance reaches zero) Question:

• How are the premiums determined? Are they consistent with other provisions in BC Hydro’s tariffs? Are they reflective of certain risks?

5.4 Rationale for Adjusted Amount Formula

Section 2.2 sets out a formula for an Adjusted Amount, where Adjusted Amount is the lower of:

(a) 50 per cent of SA; and

(b) SA + (SA x AP)

BC Hydro provides definitions for SA and AP in section 2.3.


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Questions:

• What do SA and AP stand for?

• AP means [(settlement price – 3.40) x 208]/100. What is the rationale behind this formula?

• What is the rationale behind the +/- 0.75 threshold for the AP?


Based on section 2.2, it appears that eligible customer may only defer up to 50% of their bill to pay at a future date, or the Adjusted Amount calculations as noted above, whichever provides the highest financial deferral possible. The customer may also make additional payment to pay back early if they wish, without any interest penalties. (Sections 2.2 to 2.5, pp. 8-9) Questions:


• Does BC Hydro have any cash flow concerns? Will be BC Hydro make additional financial arrangements to match the cashflow of these customers?


Section 3.2 (ii) states that if the Participating Customer sells, transfers or assigns all or substantially all of its interest in the Applicable Mine, then the unpaid amounts will become due and payable. Questions:


• What is “substantially all” mean? Does BC Hydro have a threshold? [Note that 50% control is already covered off in section 3.2 (iv)]

6.0 Other

6.1 Application – Tariff pages effective date

In Application, BC Hydro’s draft order in directives 1 through 5 seeks approval of the tariff pages to take effect on April 8, 2020. Question: Why does BC Hydro request an effective date of April 8, 2020 for the tariff amendments? Should this date be consistent with the effective date of the rate, for example, the April 2, 2020 date of the OIC 159/20 or April 3, 2020 date of the Application?

6.2 Demand charge relief

In the BC Government’s news release, it states:

BC Hydro has committed to reducing the demand charge that makes up a portion of an industrial customer’s electricity bill…

https://news.gov.bc.ca/releases/2020PREM0018-000611


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• The demand charge is based on an industrial customer’s single highest use of energy during a specified period of time and reflects the cost for BC Hydro to have the resources and capacity to serve a customer’s highest demand.

• For the March 2020 to May 2020 billing period, the demand charge will be based on a customer’s average electricity use, rather than its highest use. Reducing the demand charge is expected to provide significant savings for each customer.

Question: Are tariff amendments required to enable this change? If so, where is this relief in the tariff amendments in the Application?

6.3 Industrial Customer Relief

In the BC Government’s news release, it states: 2

Eligible industrial customers with accounts in BC Hydro’s Transmission Service rate category (rate schedules 1823 and 1828) will have the opportunity to defer 50% of their electricity bill payments for the March 2020 to May 2020 billing period.

The “Application Period” and “Closing Period” is respectively stated in the tariff supplements as follows:

• TS 97: March 22, 2020 and June 21, 2020

• TS 98: April 2, 2020 and June 30, 2020 (“Closing Date 1”) and March 14, 2021 (“Closing Date 2”)

• TS 99: March 22, 2020 and June 21, 2020

Question: Please explain why the March 2020 to May 2020 dates stated in the BC Government’s news release do not match the "Application Period” and “Closing Period” in the tariff supplements?

6.4 COVID-19 Customer Assistance Program

On page 1 of the Government of BC’s News Release, it states:

On March 13, 2020, BC Hydro introduced its COVID-19 Customer Assistance Program to provide residential and commercial customers with the option to defer payments or arrange a flexible payment plan to help pay their BC Hydro bills.

Page 4 of the Government of BC’s News Release states:

Businesses with accounts in BC Hydro’s Medium and Large General Service rate categories will still be able to defer their electricity bills without incurring late payment fees under BC Hydro’s existing COVID-19 Customer Assistance Program.

2 Application, Appendix B, p. 4.


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Question: Are tariff amendments required to enable the changes noted above for the “COVID-19 Customer Assistance Program”? If so, where is this relief in the tariff amendments in the Application?

6.5 Application – Tariff pages for BCUC endorsement

On pages 2 and 3 of the Application, it states that for TS 90, TS 97, TS 98, and TS 99, “the source document is attached to the electronic version of this submission for stamping by the Commission and return to BC Hydro.” Staff notes that only a Word version of the draft order is attached to the Application. Question: Please confirm that the tariff pages for TS 90, TS 97, TS 98, and TS 99 have been included for BCUC endorsement. If not, please submit.

1.0 electric tariff 1.1 covid relief fund for residential ... … · 1.0 electric tariff 1.1 covid...

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