Volume 30 Number 28 Orders in Council and Ministerial Orders 2003

PROVINCE OF BRITISH COLUMBIA

ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL

OrrJ<1r In Coonc/1 No. - 112 3 , Approved soo 0t'dMJd. NOV ~ 7 2003

.cd! ..::b. ~

·..Q

Eucodve Cow:IdJ ~ Vldbrla

On the recommendation of the undersigned, the Lieutenant Governor, by and with !he advice and content ofthe F...1ocutiveCouncil, ord&s tiur., effective Aprill, 2004, the wacbed Specisl Direction No. Hells made.

(1)11;.::.n tJp~JJt1:adw ~6/Ir1;TAut!x:rlrr eu<kr wbktl Qrd.c(- J. CUod.e.:

Act rld 1O:tlCll~· Be lIydro Publit: p(]il,lt!r l.Lga.cy aJld Heritage Ccruraa Acr.. ~oos 3 and 4

O<hct {sp:e(y):-

November 20, 2003 I 'fO)} n.OO3jD

A2-2

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Volume 30 Number 28 Orders in Council and Ministt..'Tie.lOrders

HERITAGE SPECIAL DIRECTION NO. BC2 TO TIlEBRITISH COLUMBIAUTILITIES CO~DSS]ON

2003

DoffnltJool

'f")

1 1.0 this Special Dired:iQn:HAd" me4llIi tbc DC Ilydro Pllblic Power ugacy and li~ritJ:1.81Contract Aa;

"deb'" mans. In relatiOll to a fiscal year of the authority. dle amount 00mi0ed by(a) adding the OOb'taDding smoonis of the following B1 the end 0( !be fiscal

year.(I) borrowings;

(H) botIId&;

(ill) Dotes;

(iy) debel1tUrU,.&Dd(b) deducting (rom dlC amClUllC dctemtincd uflda ~ (II) the mIn of the

of the following mnouotJ at the end of the fisul year.

(i) sinking funds;

[li) telIlpOC'm)' jnvectmel1U~

(ill) ~mdJUod debt;'"'eqcdtt' 'meltD' the 10m of the foDowing I.IDOUt)tJ at the end of the fuc.al year.

(a) retaioed earning$:

(b) dderred rew.nue;(c) coouibutioll6 arising from tlleColumblA River TrulY;

(d) cootnDution1 in aid of comtn:lCtion;'):overatnMt polley d.lr-ed1ve" rneMl3 a directive in writing to tho ILUthotity (rom

t!le minls.tef charged with the admiDist.Tation of tbe Hydro and Pawu AlllJwrityAcr.

''heritage coatnct" meIU1S the document a1tached u Appendix A to rhis SpecialDirecdoo;

"heritage dde.rral accoaaf" rnems lW account established under uaion 7 (a) ofthis Specia.J DUection;

'11erlta&'c ~ has the mm,mWlint 4$ in dlC heritage COl.\traa:"heritage paymrnt obUgat1oo" lw the WIle meanIng as in the heritage contract;"hcrltaec ~, hal the urne meaniDi llJ in the baitage cootra.ct;

"'trade income" means the wdited cet income of Powerex Corp., ac:corrling togenerallyacapted acroundng prlnclples, adj'nsted by,(a) if the audited Dd income is I.ess than z.ero., adding tho amount Decel!Ul)' (0

make it 2el'O. and

Volwne 30 Number 28 Orders in Couucil and Ministerial Orders

(b) where audited net income Ii greara tlun $200 million, subtmcting lUIYamounts in excess of $200 miJUoo;

"'traIl'lmmJon rate cusfumen" means i.odustri!l Of oommm:ial CUstDmers of dleaathority who are eligible for £ef\'ice under ~ designed by the commiuioDunder section 3_ .

2003

Appllc.uoo

2 This Speci~ DirediOll is issued to tOO oommissioo uJKicr sections 3 aod 4 of !he Act.

Cona(doratJon In doelgnlng ~ for tranamJ ... 1on rWt ouetcmwa

3 (1) In designing raIea for the authority'. tmumiuJoo rate c:u~ thecommission most enswe tlW thooc mel are ooosistent with cecommendanooi f8to '15 Incltulve iD the commlu.ioo', rqx)rt and recommcodarloas 10 theLieutcn.ent Governor in CoonclJ d.a:cd <ktoba' 17, 2003.

(2) Without limiting subs.ection (1), dlC comriliuioo mU$1auure the following:(a) the rate! for the anl.hority·l ttulsm1uioo rate CllStomen are Il.lbjoct to

(i) tJ>e tc:rmll azd ooodiUOOl found in SupplemcotJ 5 ud 6 to theWltbority" tariff, and

(ii) any <Jther termS!md eooditions the commi5lcion considcn; approp~for tho&emtel:

(b) Cll$tOJnCJ'li who own multiple plAnu t1l:ldcreommon OW'Det'shlp may engage

.in ~ aggrcgatioo for energy, if each plAnt(1) i, in operation, and

(ii) mc:eu the rcqUU-..nleDU to be a Ir'aaSmiuion T8teewton:.erthlu are setout ill the eutbority's tariff, or is otherwise authorized by theoomn:US&ionto be t.res1ed .Ill .. transmhsioo rate cu,tomer.

(c) the authodty publl51~ the. "Flott 2 nUe in the mlUlllCr lind with the frequencyn:qulnld by the oom.m1uian..

BASI, for M1abllahlng luthOt1ty _noe r8qUl~

4 Subject to &t:ctioo 7, in rcgulOOng and setting rates for the tllltbority, tho commig;iO(l

most eorote lhU tbok rates allow the .uthcrity 10 coIrcr rofficieDt revenue in eJldifi$Ccl yu: to en.abl~ the authaity to

(ll) provide re1!Ableelectricity.avl.ce.(b) meet:11 of iu debt wvke. tax and other finaoci:l cbligalionJ,(c) comply with govunmeot policy om:cth-es., including, without limitAtioo.

govemment policy dirtd:l~ requiring the Autbority to construct, opetlUc orexUlnd a plMt or~m, and

(d) ltclUC''l: lUl MUluAl me of n:tW11OO CGUlt)' equ.r.110 the pre-income tIUananal ro.t.z: of return allowed by the comml.Jldon to the most comparableInvestor-owned energy utility regulated under the UriliJlts Commiulon Act,

Oc:!ennlnlng the coat of en«gy

S In 6ctting the AUthority', tales. the commiuioo20UI

Volume 30 Number 28 Orders in Council and Ministerial Orders

(a) mmt tIullhe heritllge contract lUi if it were 4 legally biDding ~mentbetween 2 llf'IJU-leng1b parties,

(b) m~ detenuine IDe ~efKY required by dle authority to moet its damesticservice obligatiOU3 and mWI <ktennioe the COil to t.~ nuthocity of theportion of that required energy tlw is in exce$&of the eDCrg)' ropplicd underthe heritage coolnct.

(c) mny employ eny meclusni.s.l1l.fannulA or method refel'lbd to in StCtioo 60(1) (b.l) of!he Utiliru$ Ccm:mb3i.or1 Ad, !too

(d) unless IS different mecllllnism, fOllUUta 0( method is employed underpm.grnph (c), musteoSllte th.at electricity used by tlle ambority to med itsdocneWc ~ce obligatiocs u provided to c;ustomm on a cost-or;ervlcebub.

2003

~)

Return on equ)ty

6 In setting the authority's l11tes,lhe commission lTIUU allow the authority an aanual mteof return 00 equity aUcuhltd., using forecast coosoUdAfcd operMing income. wlichforecast consolidAted operating income is ca1cuhted OD the bub of (on:cut trlIdeincome.

Dclenal eecountt

7 v,'hen regulallng and cetting ~ for the.authorlty. the commi"ioo:(a) must tllow the 4uthority to esublish cae Of mote accounts to reflect wd

record vniar.ccs becwccn(i) tho heritage p4yment obligation and tho authocity'i foreast of the

hcritase payrilent obliguioo. and(U) the U"ade iDoome and the llulbority'li foreCAStof trode iorol1le,

(b) may allow the lIuthorit)' to est4blish one or mon: oc.ba defertl'l ~ts Corother plltpOlCC, and

(c) tn1Ist set or regulate the authority's rates in web a w(J.Yu to Allow thedeferral aa:oonti to be cleared from time to time .md withln It rc.uoaabJeperiod of time.

Annual diabibutable awpWMS allowed

8 When regubtiJ'8 and ~ning ra1cs fa- the authority, the commis:iion must ensure thatlhose l'3te! allow the lI.Ulhority to allOQlte ll1'.nUA! distributable snrplu&eS ill the m:umerspecified by the Lieutenant Govcrncr in Council cnder &eCtKm 4 of the Ad or section35 of the Hydra a.n.d Po'tl,'tr A.U1lwriry A.ct,

3c16

30 Number 28 Orden!

ApPENDIX ATO DDtEcnoN No. BC2

Wfl.1!RE..-.5 00 N0gembcr 1S,fun lor B.C. (tlie "'Enc::» Pb:n..."

AND WHEREAS the EnetrY Aim In· ellmrl.\Brilisb Cclumtwubavecolllinued~ to~l'~ Io~

AND WHEREAS the ~ ~ It tbaL • }es,m.1IIUd~e tootrw::t wiU becrellled be£woenBC Hydro'l wJ Ie Hydro'll didri~ lme..ol-bluines.lfot III initirJ l.t:.rm of 10 )'ec1.

I. lnthis~"Ad:'" rna.ns COIfm.!l:1 At:t;

"A~ ~tMS Flai. Olmnct ~~ ~ll A:."AJIclIlAf1 Senk.e~ •.~.~ ntlCaDr)' to~~

"BC lljdm" mWtS d1e Britisb"nCB ~Soll"'~"BCH Gmcntfua" meL"lol 8e a,dro'.'~:ll mm..or-~;"Collm'Hoc" ~ I.!lo Bridsh CDlm:sti. UWti:$ Cmmmuioo;

ad Al'ldlluy ~ that 801~ this A~t.nt;

~mod in ~~~(1: with lbeot

the ~oo Iltldet udoll: a of thil

"bcrl~ dectrldtt" .~ theVeuen.tioa "te.qWn:d

~~~(I) ~ 10 pa.m~ (b)•.49 000 6W Ja p«. ~ ~ !he etJt:;CfJ ~td fIX

deQy", I.llld« tbe SbglC Viillcy~. <1l

(h; the ~ M ~ delttm.~ bY tbe ~km ~ x.ction g of this~tobe~eN!:(D;

"'htrl~ ~C oIlIipM'1 m.eIl'U

(t.) subje.:( .1.0. 6.: Ml:I«W

~setO\llt·

(b) Ifw::~.

'1Hri~ ftlIOm:ca'" .~ tbe .~ Fd~ wJ ~ facllltie$ tlcKrlbcd· inSehl:dul.c A to tbe "fI::rmI·oJRe.f~.~· Mth(.) I:he rdAkd civil(b) ~ ~ ·dm ~ the or IJ:lXiliJry ~

~lty Q( men m.i 6 -at Mia a.mipalCntilll futlm: WliISS

"'Onkr'" IDCUS m «de( of !be."r<:tUUl of R~" ~.~ TttW of Rcil:tt~ to ~·ln~l No.

025.112003;

' ..Volume 30 Number 28 Orders in Council and Ministerial Orders

'''Tr1uuftt PrldDl: Ag:lft1&t1lt' mw:.s lhe 'I'rw1a .PriclI1g ~ for E1oc:tricify a.odG8s da1ed Apill, 2003 bc(w~ BC Hydso lI.TXJ Powcrex Corp. IS ammdod from timeto time;

2003

c

")'tal'" meam f1SCal yu:.

EJoc:tr1dtv Suwly

2. DCB GeoentiOll mu.st provide tbc full ClIpldIY or 1.;.0 l:erill\gC ~, to BCR Distribvlioaon 8 pried!)' call b&lh..

Obl\}lltion to .um3. BOl GenuatiOll muu supply lO BO! Distribution, in dcll Yur, the hetiaac ~ ex such

~ amount of ~ u ngy be ~ by BCH DiroiWtiol1.

0bl1ga2Son to delJlN

4. DCB Ge:l.::ndon will deliYa the bcrite.J( cnc:rxy to DOl Diwibu1ioo ., the VIlrioo::! p<lilm olmtelcoonectio:ll of the genentlDg ~ns IDcludod .10the ~e ft;SOun::e4 with theBe Hydrotra.'tsrnis.sion griD or IIp¢!:ln of inu:toonnc:ctioll win odIu ul.Wdu, as ~

flalipotUllbCllry tor otUlnIng trllPMlkalcn ~

~. Bell DiJtribctioll ",ill be responJ.iblc f«obIalniug tnI.IUITlssWn t.crvicc for mergy ~d toBCB DlstributJoo.

Ancilloay lIerfto ..

6. The p.an.le$ may Ut.t. the ~ity IlYlliIable to !bern Il:Odcr ~ 2 to deliver ccagy fa meetcusbQlu de.au.nd and touthfy the panica' Ancillary·Savice ~uitt.metlu, rcp.rdlca.s 01wbdbc:t provisioo for $d{'lapply i$ m..&:uadctany Wit!.

Poymenl

7. DOl Distribution must. on ot before the t:ld of eacll YeM, pty ID BCH Gccaa.tioo so .lUOOumequ.aJ 1.0 the heritage. Jll1ym~t obliptkm.

AclJuttmofll

8.. The ~ aclr.owlwgc: dill!

(a) the CoumUssioo tt:lIy, by Order, modify one or both of th: dc{u;iliooJ of~ecllUiY" ud ""!:lr.ri~ payment obligstiOll~ it tho cOOl.llli$sion ill uW:ficd lhJ1 aclwIre in ~ has ~y I..fJ'CClI::d

(I) tile Cl'{Sllbtllry or the baie:a..«e resourc:ca \0 prov1dc: 0tlC Of both of capeo..-ityand e.naay, (X'

(ii) the luthority's C;QUof B~8 the ~o enct'JY. I.lld

(b) any su:h modificatjoa will lulornaticn.Uy modify fbo heriuge m«gy ct the hl:ritagepayment obligation. JS Ihe Cll.JC may be, \ll'itboot runher acOoa by the p.llr1il:lO.

Worrnation nchWlge t:nd OO<lp«Ition

9. Each JJ&rty wEn coormuo to f1lXlly pro ..ide dle odIa with aoy roque.ned in!~ 10 faciliakr.h.e coordin.atod atld optin:.al opent.u of tbc DC Hydro S)'E:1Om..

Plaflw r~utlon

10. (l) The ~ win m.tke n:uo:uhle dforu to reoolve ditpUtt:S ariWl& in n:l.&tioo 1.0 th13~.eot at the l1aff lovc1.