British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

www.bchydro.com

Joanna Sofield Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 bchydroregulatorygroup@bchydro.com March 17, 2011 Ms. Erica M. Hamilton Commission Secretary British Columbia Utilities Commission Sixth Floor – 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Hamilton: RE: Project No. 3698622 British Columbia Utilities Commission (BCUC)

British Columbia Hydro and Power Authority (BC Hydro) F2012 to F2014 Revenue Requirements Application (F12-F14 RRA) Workshop Presentation

BC Hydro encloses as Exhibit B-2 its presentation from the Workshop held on March 16, 2011. For further information, please contact Janet Fraser at 604-623-4176 or by e-mail at bchydroregulatorygroup@bchydro.com. Yours sincerely,

(for) Joanna Sofield Chief Regulatory Officer ab/ma Enclosure (1) Copy to: BCUC Project No. 3698622 (F12-F14 RRA) Registered Intervener Distribution List.

B-2

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Pre

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atio

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(sec

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Org

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atio

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licat

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(sec

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1.6)

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(sec

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1.7)

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(sec

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17)

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ctio

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7)

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ithse

para

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star

ting

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ly(s

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clud

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smoo

thin

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the

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sent

atio

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ure

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16

to 1

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ths

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324.

0

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ratin

g C

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946.

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2.3

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2

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Req

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(s.1

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dule

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F201

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fere

nce

NS

A-1

2Pl

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lan

F201

2F2

013

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23

45

= 2

- 1

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3 -

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1,49

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342.

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Rev

enue

1.0

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8In

ter-

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men

t Rev

enue

1.0

L8(5

5.6)

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(28.

5)29

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()

()

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()

()

9D

efer

ral A

ccou

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rans

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1.0

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(160

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208.

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10O

ther

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ulat

ory

Acc

ount

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nsfe

rs1.

0 L1

6(4

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)(7

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)(3

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76.8

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6.4

226.

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ubsi

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et In

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ities

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enue

1.0

L20

(17.

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3.3

(0.4

)(0

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13D

efer

ral R

ider

Rev

enue

1.0

L21

(113

.9)

(90.

2)(9

8.4)

(108

.4)

23.6

(8.2

)(1

0.0)

14Le

ss R

even

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t F20

11 R

ates

1.0

L26

(3,1

83.6

)(3

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(3,2

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)(3

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(105

.6)

19.7

(13.

7)

10

15R

even

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hort

fall

1.0

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(0.0

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231

9.9

347.

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ease

1.0

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9.73

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9.73

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l Acc

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e R

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1.0

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2.50

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Incr

ease

1.0

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10.1

3%9.

73%

9.73

%

Tabl

e 1-

2 F2

012

to F

2014

Rev

enue

Req

uire

men

ts –

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rent

Vie

w (s

.1.3

.2)

Sche

dule

F201

1F2

012

F201

3F2

014

($ m

illio

n )Re

fere

nce

NS

A-1

2Pl

anPl

anP

lan

F201

2F2

013

F201

41

23

45

= 2

- 16

= 3

- 2

7 =

4 - 3

Incr

ease

Fro

m P

rior

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r

1C

ost o

f Ene

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3.0

L53

1,13

8.5

1,17

7.2

1,19

5.9

1,28

6.7

38.6

18.7

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pera

ting

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ts3.

0 L5

476

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895

8.3

1,10

8.8

(11.

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3.4

150.

5

3Ta

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3.0

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183.

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7.8

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1.7

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3.0

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532.

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30

L59

(81

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(29)

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Rev

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3.0

L59

(81.

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3.0)

(70.

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2.8)

8.7

3.0

(2.9

)

8In

ter-

Seg

men

t Rev

enue

3.0

L60

(55.

6)(2

6.1)

(27.

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8.5)

29.5

(1.3

)(1

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ubsi

diar

y N

et In

com

e3.

0 L6

1(1

29.3

)(4

9.0)

(54.

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80.3

(5.1

)(7

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10O

ther

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ities

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enue

3.0

L62

(17.

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(14.

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10O

te

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3.0

L63

(113

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(90.

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(108

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23.6

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1.0

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(3,1

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(105

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9.73

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1.0

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1.0

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(s.1

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8%9%

10%

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urn

on E

quity

Rat

e M

anag

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t (C

hapt

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Rat

e In

crea

ses

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Rat

e In

crea

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cast

(%)

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F201

3 F2

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F201

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Rat

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6.11

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9.73

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3.

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2.50

2.

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2.50

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9.73

9.73

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7.29

18

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29.6

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sect

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3)

14

Rat

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anag

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hapt

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egul

ator

y A

ccou

nt B

alan

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(s.2

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le 2

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hedu

leF2

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F201

2F2

013

F201

4

End

of Y

ear

Bal

ance

Sche

dule

F201

1F2

012

F201

3F2

014

($ m

illio

n)R

efer

ence

Fore

cast

Plan

Pla

nP

lan

12

34

Def

erra

l Acc

ount

s1

Her

itage

Def

erra

l Acc

ount

2.1

L26

268.

929

9.2

279.

925

6.8

2N

on-H

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ge D

efer

ral A

ccou

nt2.

1 L2

740

1.4

378.

735

4.4

325.

03

Trad

e In

com

e D

efer

ral A

ccou

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1 L2

820

8.7

196.

918

4.2

169.

04

Tota

l87

9.0

874.

981

8.5

750.

8

Cap

ital-L

ike

Acc

ount

s5

Dem

and-

Side

Man

agem

ent

2.2

L135

526.

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d to

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her v

olum

es o

f IP

P c

ontra

ct d

eliv

erie

s an

d hi

gher

vol

umes

of

mar

ket e

lect

ricity

pur

chas

es d

ue to

the

wel

l bel

ow n

orm

al s

yste

m in

flow

.

23

Ope

ratin

g C

osts

Cos

t cla

ssifi

catio

n an

d B

CTC

Inte

grat

ion

Pla

nnin

g P

roce

ssO

pera

ting

Cos

ts b

y B

usin

ess

Gro

up

Ret

urn

on E

quity

, 14%

Cos

t of E

nerg

y, 2

9%

FiC

h14

%

qy,

%

Fina

nce

Cha

rges

, 14%

Ope

ratin

g C

osts

, 22%

Taxe

s , 5

%

Amor

tizat

ion,

16%

24

,

Ope

ratin

g C

osts

by

Bus

ines

sG

roup

Tabl

e 5-

1 R

econ

cilia

tion

of F

11 R

RA

NSA

Ope

ratin

g C

osts

to F

11 R

RA

NSA

-12

($

mill

ion)

Sc

hedu

le 5

.0 R

efer

ence

Ope

ratin

g co

sts

per t

he F

11 R

RA

NS

A

653.

7 C

olum

n 16

, Row

9

It2

d3

fBC

TCI

tti

(ti

13

31)

625

Cl

18R

9Ite

ms

2 an

d 3

of B

CTC

Inte

grat

ion

(sec

tion

1.3.

3.1)

62.5

C

olum

n 18

, Row

9

Nat

ure

View

recl

assi

ficat

ions

of c

osts

(s

ectio

n 1.

3.3.

2)

38.3

C

olum

n 17

, Row

9

SO

CC

F11

RR

A N

SA-1

2 O

pera

ting

Cos

ts75

4.5

Col

umn

19, R

ow 9

Ta

ble

5-3

($

mill

ion)

Sc

hedu

le 5

.0 R

efer

ence

F11

RR

AN

SA12

Ope

ratin

gC

osts

754

5C

olum

n8

Row

9F1

1 R

RA

NSA

-12

Ope

ratin

g C

osts

754.

5 C

olum

n 8,

Row

9

Add

back

$35

milli

on N

SA

adju

stm

ent

35.0

C

olum

n 8,

Row

8

Ded

uct n

on-c

urre

nt P

EB c

osts

(pen

sion

and

ot

her)

(5

1.2)

C

olum

n 8,

Row

s 18

and

19

25

F11

Pla

n/ca

rry

forw

ard

befo

re n

on-c

urre

nt P

EB

738.

3

Ope

ratin

g C

osts

by

Bus

ines

s G

roup

Tabl

e5-

4Ta

ble

54

F201

2 to

F20

14O

pera

ting

Cos

ts

($ m

illion)

F201

2F201

3F201

4

1F11 Plan

 / carryforw

ard plan

 before Non

‐Current PEB

 costs (from Table5‐3)

738.3

         

773.3

       

778.2

      

2Standard Labou

r Ra

te (SLR) ‐ current pen

sion

 expen

se increase

10.5

            

1.7

            

1.7

           

3Accou

nting reclassifications (see

 below

)24

.5            

(3.0)

           

(0.3)

         

477

3.3

         

771.9

       

779.7

      

5Savings/Efficiency:

6BC

TC Integration Savings

(25.8)

          

‐            

‐          

7Savings from

 efficiency projects

(4.6)

             

(19.1)

        

(19.2)

       

8Prod

uctiv

ity/Efficiencies

(16.9)

          

(5.7)

           

(4.1)

         

9A

(47.3)

          

(24.8)

        

(23.3)

       

Requ

ired

 cost increases:

10Re

venu

e Driven

1.3

             

0.6

            

0.5

           

11Mainten

ance/Ageing Assets

18.4

            

10.5

          

6.0

           

12Safety/Sup

ervision

1.5

             

‐            

‐          

13New

 Work

7.3

             

5.4

            

8.2

           

14Co

st Increases

1.6

             

0.1

            

0.2

           

15Growth Driven

9.7

             

6.2

            

5.0

           

16SLR increase  (no

n‐pe

nsion piece)

10.9

            

9.8

            

8.8

           

17CapitalO

verhead&Other

(35)

(16)

(17)

17Capital O

verhead& Other

(3.5)

             

(1.6)

           

(1.7)

         

18B

47.3

            

31.0

          

27.0

        

19Net increase

B ‐ A

0.0

             

6.3

            

3.7

           

20To

tal  before Non

‐Current PEB

 costs

773.3

         

778.2

         

783.3

        

21Non

‐Current PEB

 Costs 

56.8

            

59.3

          

53.6

        

22To

talbeforeIFRS

adjustmen

ts(Schedule5.0,Line

9)83

0.1

837.5

836.9

22To

tal before IFRS

 adjustm

ents (S

chedule 5.0, Line 9)

830.1

         

837.5

       

836.9

      

23IFRS

 adjustm

ents

‐             

(24.0)

        

4.9

           

24Net Ope

ratin

g Co

sts (Sched

ule 5.0, Line 22

)83

0.1

         

813.5

       

841.8

      

Accou

nting Re

classifications:

25Water Licen

se Req

uirements

3.2

             

(3.4)

           

(0.7)

         

26IPP Capital Lease

6.1

             

0.4

            

0.4

           

27Capital Investig

ation costs capitalized

 in prior years

8.0

             

‐            

‐          

26

28Procurem

ent d

epts deferred in prior years

3.0

             

‐            

‐          

29Intercon

nection billable stud

ies recovery (cost increase incl abo

ve)

4.2

             

‐            

‐          

3024

.5            

(3.0)

           

(0.3)

         

Ope

ratin

g C

osts

by

Bus

ines

s G

roup

Tabl

e5-

7an

d5-

8Ta

ble

5-7

and

5-8

Cur

rent

Ope

ratin

g C

osts

by

Bus

ines

s G

roup

F2

011

F201

2F2

013

F201

4($

mill

ion)

NSA-

12Pl

anPl

anPl

an$

mill

ion

Per C

ent

F201

2 In

crea

se

12

34

5 =

2 - 1

6 =

5 / 1

Curr

ent O

pera

ting

Cost

s1

Gen

erat

ion

166.

818

2.0

185.

318

9.1

15.2

9.1%

2Tr

ansm

issi

on &

Dis

tribu

tion

364.

238

0.0

390.

440

2.8

15.8

4.4%

3D

eput

y C

EO B

usin

ess

Gro

up12

4.4

134.

613

5.8

137.

710

.28.

2%4

Cor

pora

te G

roup

s (e

xcl P

EB)

82.9

76.7

66.7

53.6

(6.2

)-7

.5%

()

()

5N

on-C

urre

nt P

EB -

Pens

ion

21.2

27.3

38.3

31.9

6.1

28.8

%6

Non

-Cur

rent

PEB

- O

ther

30.0

29.5

21.0

21.7

(0.5

)-1

.7%

7F0

9/F1

0 R

RA

Adju

stm

ents

0.0

0.0

0.0

0.0

0.0

N/A

8F1

1 R

RA

NSA

Adj

ustm

ent

(35.

0)0.

00.

00.

035

.0-1

00.0

%9

Subt

otal

(Sch

edul

e 5.

0, li

ne 9

)75

4.5

830.

183

7.5

836.

875

.610

.0%

10R

egul

ator

y Ac

coun

t Tra

nsfe

rs (5

.0 L

34)

(23.

6)34

.884

.887

.958

.3-2

47.6

%11

IFR

S Im

pact

(5.0

L37

)0.

00.

0(2

4.0)

4.9

0.0

N/A

12To

tal C

urre

nt O

pera

ting

(5.0

L38

)73

0.9

864.

989

8.3

929.

613

3.9

18.3

%

FTE

bB

iG

FTEs

by

Bus

ines

s G

roup F2

011

F201

2F2

013

F201

4N

SA-1

2Pl

anPl

anPl

anFT

EPe

r Cen

t

12

34

5 =

2 - 1

6 =

5 / 1

FTEs

by

Bus

ines

s G

roup

1G

ener

atio

n1,

433

1,41

31,

413

1,41

3(1

9)-1

.3%

F201

2 In

crea

se

27

,,

,,

()

2Tr

ansm

issi

on &

Dis

tribu

tion

4,01

03,

865

3,86

53,

865

(144

)-3

.6%

3D

eput

y C

EO B

usin

ess

Gro

up60

165

666

158

655

9.2%

4C

orpo

rate

Gro

ups

852

821

719

619

(31)

-3.7

%5

Tota

l (Sc

hedu

le 1

6.0,

line

40)

6,89

56,

756

6,65

96,

484

(140

)-2

.0%

BR

EA

K

Cap

ital E

xpen

ditu

res

Tabl

e 6-

1

F201

1F2

012

F201

3F2

014

($ m

illio

n)N

SA-1

2Pl

anPl

anPl

an1

23

41

23

4C

apita

l Exp

endi

ture

s1

Hyd

roel

ectri

c G

ener

atio

n37

6.2

372.

446

5.2

544.

32

Die

sel G

ener

atio

n8.

812

.714

.812

.33

Ther

mal

Gen

erat

ion

63.5

57.8

14.0

4.0

4Tr

ansm

issi

on L

ines

177.

931

2.2

456.

359

1.3

5Tr

ansm

issi

on S

ubst

atio

ns24

4.3

402.

535

4.5

313.

76

SDA

Subs

tatio

ns12

9.1

0.0

0.0

0.0

7D

istri

butio

n42

3.8

414.

042

3.4

449.

9I

fti

Th

l80

275

574

173

48

Info

rmat

ion

Tech

nolo

gy80

.275

.574

.173

.49

Vehi

cles

21.0

35.0

26.0

21.0

10Pr

oper

ties

and

Oth

er C

apita

l92

.413

8.4

99.4

105.

511

Smar

t Met

erin

g &

Infra

stru

ctur

e54

.30.

00.

00.

012

HPO

PPr

oper

ties

forR

esal

e(2

09)

(20

9)(1

8)0

012

HPO

P Pr

oper

ties

for R

esal

e(2

0.9)

(20.

9)(1

.8)

0.0

13D

eman

d Si

de M

anag

emen

t18

4.4

189.

022

5.3

263.

014

Tota

l (Sc

hedu

le 1

3.0,

Lin

e 14

)1,

835.

01,

988.

62,

151.

22,

378.

4

29

Cap

ital A

dditi

ons

Tabl

e 6-

2

F2

011

F201

2F2

013

F201

4($

illi

)N

SA12

PlPl

Pl($

mill

ion)

NSA

-12

Plan

Plan

Plan

12

34

Cap

ital A

dditi

ons

1H

ydro

elec

tric

Gen

erat

ion

497.

632

5.4

358.

626

6.9

2D

iese

lGen

erat

ion

105

115

158

156

2D

iese

l Gen

erat

ion

10.5

11.5

15.8

15.6

3Th

erm

al G

ener

atio

n10

.115

1.9

11.6

3.1

4Tr

ansm

issi

on L

ines

77.7

252.

551

8.9

695.

55

Tran

smis

sion

Sub

stat

ions

228.

329

0.0

191.

615

9.6

6SD

A Su

bsta

tions

100.

90.

00.

00.

07

Dis

tribu

tion

436.

624

3.7

321.

638

6.4

8In

form

atio

n Te

chno

logy

105.

352

.252

.646

.19

Vehi

cles

26.4

46.3

28.3

22.3

10Pr

oper

ties

and

Oth

er C

apita

l11

5.3

165.

580

.912

4.6

StM

ti

&I

ft

t54

30

00

00

011

Smar

t Met

erin

g &

Infra

stru

ctur

e54

.30.

00.

00.

012

HPO

P Pr

oper

ties

for R

esal

e(2

0.9)

(20.

9)(1

.8)

0.0

13D

eman

d Si

de M

anag

emen

t18

4.4

189.

022

5.3

263.

014

Tota

l (Sc

hedu

le 1

3.0,

Lin

e 36

)1,

826.

51,

707.

11,

803.

31,

983.

0

30

Cap

ital E

xpen

ditu

res

Rev

iew

ed b

y B

CU

CTa

ble

6-3

Tabl

e 6

3 P

artic

ular

s ($

mill

ion)

B

CU

C

Ord

er N

o.

Tota

l Cos

t A

ccep

ted

by

Tota

l Cos

t of

Proj

ect p

er

the

BC

UC

A

ppen

dix

I

Hyd

roel

ectr

ic G

ener

atio

n

1 R

evel

stok

e U

nit 5

C

-8-0

7 28

0.0

250.

0 2

G.M

. Shr

um U

nits

1-5

Tur

bine

Rep

lace

men

t G

-1-1

0 26

2.0

246.

9–31

3.9

3 M

ica

5/6

(Def

initi

on P

hase

Fun

ding

) G

-69-

09

30.0

70

0.0–

800.

0 4

Sta

ve F

alls

Spi

llway

Gat

es R

epla

cem

ent

G-8

1-10

61

.5

66.9

–71.

8

5 H

ugh

Kee

nley

side

Spi

llway

Gat

es P

roje

ct

G-1

77-1

0 90

.2

90.7

–102

.5

Th

erm

al G

ener

atio

n

6 Fo

rt N

elso

n R

esou

rce

Smar

t Upg

rade

G

-75-

09

140.

1 13

9.8–

154.

6

Tran

smis

sion

7 V

anco

uver

City

Cen

tral T

rans

mis

sion

C

-3-1

0 20

0.9

177.

0–19

5.0

8 C

olum

bia

Val

ley

Tran

smis

sion

Pro

ject

C

-5-1

0 15

4.1

132.

0–20

9.0

D

eman

d Si

de M

anag

emen

t

9 D

eman

d S

ide

Man

agem

ent (

F200

9-F2

011)

G

-91-

09

418.

0 38

2.1

31

Def

erra

l and

Reg

ulat

ory

Acc

ount

s C

hapt

er 7

Fra

mew

ork

for R

egul

ator

y A

ccou

nts

Def

erra

lAcc

ount

sD

efer

ral A

ccou

nts

Exi

stin

g R

egul

ator

y A

ccou

nts

Pla

nned

Reg

ulat

ory

Acc

ount

sP

oten

tialR

egul

ator

yA

ccou

nts

Pot

entia

l Reg

ulat

ory

Acc

ount

s

32

Oth

er R

even

ue R

equi

rem

ent I

tem

s C

hapt

er 8

Am

ortiz

atio

n E

xpen

seC

apita

lStru

ctur

eC

apita

l Stru

ctur

eF

inan

ce C

harg

esR

etur

n on

Equ

ityT

axes

Taxe

sN

on-T

ariff

Rev

enue

sI

nter

-Seg

men

t Rev

enue

sS

ubsi

diar

yN

etIn

com

eS

ubsi

diar

y N

et In

com

eE

xpen

ditu

res

for E

xpor

t A

lloca

tion

of C

orpo

rate

Cos

tsP

rovi

sion

san

dO

ther

Pro

visi

ons

and

Oth

erA

ccou

ntin

g P

olic

y Is

sues

Int

erna

tiona

l Fin

anci

al R

epor

ting

Sta

ndar

ds (I

FRS

)

33

Ope

n A

cces

s Tr

ansm

issi

on T

ariff

Tr

ansm

issi

on R

even

ue R

equi

rem

ent –

cost

s at

tribu

ted

to tr

ansm

issi

on

busi

ness

mak

e up

TR

R –

no c

hang

e to

pre

-est

ablis

hed

met

hodo

logy

pg

pgy

O

ATT

Rat

es –

Sch

edul

e 3.

4

With

the

inte

grat

ion

of B

CH

ydro

and

BC

TC, B

CH

ydro

is n

ow re

spon

sibl

e fo

r see

king

app

rova

l of O

ATT

rate

s.

Th

e TR

R is

col

lect

ed u

nder

the

OA

TT th

roug

h:

Net

wor

k In

tegr

ated

Tra

nsm

issi

on S

ervi

ce (N

ITS

) cha

rges

.

Long

-term

and

sho

rt-te

rm P

TP c

harg

es.

Anc

illar

Ser

ices

char

ges

A

ncilla

ry S

ervi

ces

char

ges.

34

Stat

us o

f Dire

ctiv

es a

nd N

SP P

rovi

sion

s (C

hapt

er 1

0)

App

endi

ces

App

endi

ces

Cha

pter

10,

Con

cord

ance

Tab

les

O

utst

andi

ng B

C H

ydro

Dire

ctiv

es a

nd N

SA

Pro

visi

ons

O

utst

andi

ng B

CTC

Dire

ctiv

es

Req

uest

s fro

m N

ov. 3

0 m

eetin

g

App

endi

ces

App

endi

ces

35