BRITISH COLUMBIA UTILITIES COMMISSION · June 15, 2011 APPEARANCES P. MILLER Commission Counsel M....

Allwest Reporting Ltd. #1200 - 1125 Howe Street Vancouver, B.C. V6Z 2K8

BRITISH COLUMBIA UTILITIES COMMISSION

IN THE MATTER OF THE UTILITIES COMMISSION ACT R.S.B.C. 1996, CHAPTER 473

And

An Inquiry into FortisBC Energy Inc. regarding the Offering of Products and Services in Alternative Energy Solutions and Other New

Initiatives

BEFORE:

N.E. MacMurchy, Chairperson

D.A. Cote, Commissioner

A.A. Rhodes, Commissioner

L.A. O'Hara, Commissioner

VOLUME 1

PRE-HEARING CONFERENCE

Vancouver, B.C. June 15, 2011

APPEARANCES P. MILLER Commission Counsel M. GHIKAS D. CURTIS

Fortis Energy Utilities

K. E. GUSTAFSON, Q.C. Energy Services Association of Canada R. B. WALLACE, Q.C. Corix Utilities Inc. C. WEAFER Commercial Energy Consumers Association of

B.C. W. ANDREWS B.C. Sustainable Energy Association and

Sierra Club of B.C. L. WORTH J. QUAIL

Consumers' Association (B.C. Branch, B.C. Old Age Pensioners' Organization, Counsel Of Senior Citizens' Organizations, Federated Anti-Poverty Groups Of B.C., West End Seniors' Network

P. WIERINGA Ministry of Energy and Mines J. CHRISTIAN B.C. Hydro and Power Authority

INDEX OF WITNESSES PAGE

PROCEDURAL CONFERENCE, WEDNESDAY, JUNE 15, 2011

SUBMISSIONS BY BCUC STAFF ...................... 8, 107

SUBMISSIONS BY MR. GHIKAS ..................... 11, 109

SUBMISSIONS BY MR. GUSTAFSON .................. 38, 114

SUBMISSIONS BY MR. WALLACE .................... 54, 117

SUBMISSIONS BY MR. QUAIL ........................... 61

SUBMISSIONS BY MR. WEAFER ..................... 72, 120

SUBMISSIONS BY MR. ANDREWS .................... 80, 121

SUBMISSIONS BY MR. WIERINGA ................... 92, 122

SUBMISSIONS BY MR. CHRISTIAN .................. 94, 122

REPLY BY MR. GHIKAS ........................... 99, 124

PROCEDURAL CONFERENCE, WEDNESDAY, JUNE 15, 2011

INDEX OF EXHIBITS

NO. DESCRIPTION PAGE

C12-2 OUTLINE OF COMMENTS BY MR. WALLACE 54

FEI AES Services Inquiry June 15, 2011 Procedural Conference Page: 1

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Allwest Reporting Ltd., Vancouver, B.C.

CAARS

VANCOUVER, B.C.

June 15, 2011

(PROCEEDINGS RESUMED AT 9:00 A.M.)

THE CHAIRPERSON: Good morning. Thank you for attending

this procedural conference on an inquiry into FortisBC

Energy Inc., regarding the offering of products and

services and alternative energy solutions and other

new initiatives.

My name is Norman MacMurchy and I've been

designated as panel chair. With me are Commissioner

Rhodes, Commissioner Cote and Commissioner O'Hara.

Commission counsel is Paul Miller from the Boughton

Law Corporation, and from the Commission staff Ms.

Eileen Chang is the lead staff person. And along with

Commission counsel, staff are available to help you if

you have any questions or need some other form of

assistance in the inquiry. The Hearing Officer is Hal

Bemister.

This inquiry is being held under Sections

23, 72, 82 and 83 of the Utilities Commission Act.

These sections deal with the general supervision of

public utilities, jurisdiction of the Commission to

deal with applications, and the power to inquire

without applications and actions on complaints.

By letter dated 27th of April, 2011, the


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Energy Services Association of Canada filed an

application with the Commission requesting a process

to review FortisBC's alternative energy service

activities. It stated its major concerns are related

to the lack of public consultation, use and

distribution of energy efficiency and conservation

funding, delivery of alternative energy services by a

regulated utility, potential cross-subsidization of

alternative energy service activities by natural gas

ratepayers, and the use of sensitive market

information by FEI.

On May 6th, 2011, Corix Utilities Inc. filed

a letter of support for this complaint. On May 9th,

2011, the Commission responded to the complaint filed

by the Energy Services Association of Canada and also

provided FortisBC Energy Inc. with a copy of the

complaint and the Commission's response. On May 24th,

2011, the Commission determined that an inquiry into

FortisBC Energy Inc., or FEI's, transformation from a

traditional gas distribution utility into an

integrated energy power provider is warranted, and

issued Order G-95-11.

The alternative energy services are part of

FEI's response to the February 27th, 2007 B.C.

government's Energy Plan, "A vision for clean energy

leadership" which was followed by the passage of the


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Clean Energy Act.

Proceeding Time 9:04 a.m. T2

This Act received royal assent on June 3rd,

2010. It sets out British Columbia's energy

objectives, which in part encourage switching energy

sources where this leads to decreased greenhouse gas

emissions, encourages waste reduction through the use

of biogas and the use and development of technologies

that support energy conservation and efficiency.

As cited in the preambles in G-95-11, FEI

has filed a number of applications to the Commission

for approval to provide products and services in

alternative energy services and other new initiatives.

These applications led to a series of ad hoc

Commission decisions and orders with respect to energy

efficiency and conservation programs, the framework

for regulating biomethane service offering, and within

the negotiated settlement agreement of Terasen's 2010

and 2011 rate review application agreements, treatment

related to expenditures on innovative technologies and

so forth.

In each of these proceedings, as cited in

the preamble in G-95-11, registered interveners have

raised issues with respect to the scope of regulation

as it relates to these new initiatives. In the

Commission decision dated February 1st, 2011, accepting


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Terasen's long-term resource plan, the Commission

stated that an additional process may be required to

determine how these new ventures would fit within the

context of a regulated utility. The Commission

further stated that without such a process, the

Commission and interested parties would miss the

opportunity for a comprehensive and systematic

consideration of complex regulatory issues embedded in

the new initiatives applications.

At last count there are 14 interveners

registered to participate in this proceeding.

Attached as Appendix B to Order G-95-11 is the

Commission Staff Working Paper on the scope of the

issues. On June 9th, 2011, interveners filed

preliminary comments on issues, scope and process.

Our task today is to work through the issues, not to

resolve them or debate their merits, but to determine

which issues are warranted to be included in the

inquiry, and what is the scope or boundaries within

which each issue will be examined.

A further task is to determine the process

that is most appropriate to allow all interveners to

efficiently and effectively provide analysis and

advice to the Commission that it will allow it to

address the issues in a manner that is fair and in the

public interest. Parties are also free to bring


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forward any other issues of a procedural nature.

To achieve our goal of defining and scoping

out the issues, it is proposed that we proceed by

giving all parties a chance to speak to the issues

they believe are relevant to the inquiry, and the

scope of the issues that they believe should be

addressed by the Commission. To this end, it is

proposed that Commission Staff will speak first,

followed by Fortis Energy, the Energy Services

Association of Canada, and then all other interveners

as called for by Commission Counsel.

Again let me stress this is not the forum

to address the merits or lack thereof of specific

issues. It is a forum to state your views on what

issues should be included in the inquiry and to what

depth or level of detail you would expect the

Commission to deal with the issue.

Following the discussion of the issues,

parties will be canvassed as to the future process and

timelines that they see as most appropriate for the

Commission to follow to deal with the issues. Parties

may then also raise any other procedural concerns that

they may have.


Based on the input received today, it is

the intent of the Commission to then send out to all


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parties a document setting out the issues that are to

be addressed in the inquiry, and the process and

timeline that will be followed to address these

issues.

Mr. Miller, do you have anything to add?

MR. MILLER: No, Mr. Chair.

THE CHAIRPERSON: Okay, at this time then I call on

Commission staff to put forward their comments.

MR. MILLER: Mr. Chair, if I could call the order of

appearances first, that may be helpful.

THE CHAIRPERSON: Oh, please do.

MR. MILLER: Fortis Energy Utilities.

MR. GHIKAS: Mr. Chairman, Commissioners, my name is

Matthew Ghikas, G-H-I-K-A-S. And with me is David

Curtis, C-U-R-T-I-S. We are counsel for the FortisBC

Energy Utilities.

MR. MILLER: Energy Services Association of Canada.

MR. GUSTAFSON: Mr. Chairman, Commissioners, Karl E.

Gustafson appearing on behalf of the Energy Services

Association of Canada. Karl is spelled K-A-R-L,

Gustafson G-U-S-T-A-F-S-O-N.

MR. MILLER: Corix Utilities Inc.

MR. WALLACE: R. B. Wallace, appearing on behalf of Corix

Utilities Inc.

MR. MILLER: Commercial Energy Consumers' Association of

B.C.


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MR. WEAFER: Good morning, Mr. Chairman, members of the

Commission, my name is Chris Weafer and I am appearing

for the Commercial Energy Consumers' Association of

British Columbia. Thank you.

MR. MILLER: B.C. Sustainable Energy Association and

Sierra Club of British Columbia.

MR. ANDREWS: William Andrews, appearing for the BCSEA

and the Sierra Club of B.C.

MR. MILLER: B.C. Old Age Pensioners' Organization et al.

MS. WORTH: Leigha Worth, appearing as counsel for

BCOAPO, accompanied by co-counsel Jim Quail.

MR. MILLER: Ministry of Energy and Mines.

MR. WIERINGA: Paul Wieringa, I'll spell that. W-I-E-R-

I-N-G-A. With the Ministry of Energy and Mines.

MR. MILLER: B.C. Hydro and Power Authority.

MR. CHRISTIAN: Jeff Christian, C-H-R-I-S-T-I-A-N,

appearing on behalf of B.C. Hydro.

MR. MILLER: Is there any other party that I have failed

to call that wishes to appear?

No response, Mr. Chair.

THE CHAIRPERSON: Ms. Cheng?

MR. MILLER: I'll make submissions on behalf of staff,

Mr. Chair.

THE CHAIRPERSON: Okay.

MR. MILLER: One preliminary comment, Mr. Chair. If it's

satisfactory to the panel, I'd like to advise the


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parties it's not necessary to run through their

written submissions in their entirety. If they could

highlight any points that they wish to make to the

panel that are included in their written submissions,

that would be satisfactory, and if they have any

comments in reply to what someone has said in front of

them, or before them, that would also be helpful.

With those comments, Mr. Chair, I'd like to

move into the staff submissions.


THE CHAIRPERSON: Please proceed.

SUBMISSION BY BCUC STAFF:

MR. MILLER: Mr. Chair and the panel members, the

recitals in the Commission Order leading to this

inquiry cited a number of Commission determinations

relating to multiple applications such as CPCNs,

revenue requirements, EEC programs and long-term

resource plans regarding Fortis's non-traditional

businesses. In each of those proceedings, the issue

of the evolution of new initiatives at Fortis was

raised.

In staff's submission, this inquiry is an

opportunity for a comprehensive and systematic

consideration of complex regulatory issues and the new

initiatives on a go-forward basis.

In staff's submission, this inquiry should


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include a review of whether or not there is some line

that appears at some point between regulatory and non-

regulatory activities, the potentially competitive

types of enterprises in a traditional regulatory

environment, and the overall context in which to view

these activities.

The Energy Services Association of Canada,

who describe themselves as project integrators of

alternative energy solution projects and an industry

association, wrote to the Commission by letter citing

specific concerns regarding Fortis's activities which

relate to public consultation, use and distribution of

EEC funding, Fortis's activities as a regulated

utility and potential cross-subsidization, and use of

sensitive market information within Fortis.

Staff envisage that this inquiry could

enable the Commission to make determinations on not

only the Energy Services Association complaint but

also develop on a go-forward basis a holistic view of

Fortis's in these areas.

A possible outcome of the inquiry could be

the development of a set of a guidelines in the

context of our provincial legislative and energy

policy environment for Fortis that would update,

expand or supersede the retail market downstream of

the meter guidelines, or RMDUM guidelines as they are


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sometimes called, that are currently in place. Staff

expect that the new guidelines might apply

specifically to Fortis, but the principles inherent in

the guidelines could also form the basis of BCUC's

regulatory framework for other utilities under its

jurisdiction.

With respect to scoping issues to be

examined in this inquiry, staff has put forward its

working paper, as you already referenced, Mr. Chair.

Staff, subject to the few comments I'm going to make

following this, believe that all the issues listed in

their scoping document should be included.

So the scoping document from staff is

listed as Appendix B to the Order. I only have a few

comments on it, subject to my previous submission that

all the issues within the scoping document should be

subjects of the inquiry.

Under issue 1, "Scope", under the first

bullet the issue is whether the inquiry should proceed

as a generic proceeding or whether it should be

focused specifically on Fortis Utilities' activities.

In staff's view, it should be focused on Fortis. It

shouldn't be a more general hearing looking into all

public utility activities.

The second bullet under issue 1, under the

"Scope" heading, staff also believe that this inquiry


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should look at whether the Energy Services Association

of Canada members are public utilities as defined in

the Utilities Commission Act.

Under issue number 2, under "Scope", should

the hearing process be limited to a single activity,

alternative energy solutions only? And staff's view

is, it should not. We should look at all new energy

solutions within this. So, NGV, biogas, et cetera.

Those are my submissions on scope, Mr.

Chair, and we will have some further comments on

process once we get to that point.

THE CHAIRPERSON: Thank you.


MR. MILLER: Fortis.

SUBMISSIONS BY MR. GHIKAS:

MR. GHIKAS: Thank you, Mr. Chairman, Commissioners.

You'll be relieved to know that part of the benefit of

filing a very lengthy written submission is that that

saves time and doesn't add time at a procedural

conference, which was its intention. And I'll just be

highlighting aspects as Mr. Miller referred to, and

touching on a few of the themes that come out of that

and some of the other submissions that were filed.

I will note at the outset that ESAC, in

particular, took the approach of identifying its

position with respect to a number of the issues. I


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should say that the Fortis Utilities take issue with

many of their positions, but I take to heart that this

is a procedural conference and we'll be dealing with

it on a procedural basis and we won't be making

substantive responses to what is set out in those

submissions.

I will be referring to the materials that

we filed, and so if you have those handy that will be

helpful.

I will speak to five issues with respect to

scope. The first one is the definition of alternative

energy services. The second one is how this inquiry

fits within the context of other Commission

proceedings, including previous proceedings, those

that are currently ongoing, and future proceedings.

Thirdly, whether the inquiry should be generic or

specific to Fortis Energy Utilities. Fourth, the

issue of hearing costs. And fifth, the framing of the

issues.

So turning to the first issue which is the

definition of "alternative energy services". I think

it's important at the outset to just make sure that

everybody in the room is on the same page in terms of

what we're talking about when we refer to "alternative

energy services", because there were some nuances that

I picked up on in various submissions and I want to


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make sure that it's absolutely clear to everyone what

we're referring to.

And if you can start, Mr. Chairman and

Commissioners, by turning to tab 18 of the binder.

There is a copy of the general terms and conditions,

Section 12(a), which refers to alternative energy

extensions, and when the Fortis Energy Utilities are

referring to alternative energy services, this is the

sum total of what we are referring to. And those

services are described in Section 12(a), which is an

approved rate schedule, and you'll see there's

paragraphs in there that deal with geo exchange

systems, solar thermal and water systems and district

energy systems.

And for clarity, when I am referring and

when the companies are referring to alternative energy

services, we're not referring to EEC or DSM

expenditures, we're not referring to natural gas

vehicles and we're not referring to biomethane. So I

think it's important that we have that clear

understanding when going forward.

Now, moving on to the next issue which is

how this inquiry fits within the context of other

proceedings. This is an overarching theme in the

written submissions and it comes up in the recitals of

the order, which my friend Mr. Miller referred to, and


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it comes up in the context of the Commission's

decision in the long-term resource plan where there

was an expression of interest in having a more

comprehensive look at things.

My submission today is that the

interrelationship of this inquiry with those

proceedings gives rise to three considerations that

have to be taken into account and that temper the

ability and the desirability of the Commission having

a broad look at all of the issues that are enumerated

in the recitals to the procedural order.


The first consideration is that of

regulatory efficiency and a look at what is going on

today, in particular, which is what I'll focus on in

that factor.

The second factor is considerations

regarding the administration of justice. It's a high-

sounding principle but it has very practical

applications in terms of the context of dealing with

issues in multiple proceedings.

The third consideration is that of

substantive fairness.

And I will turn first to the issue of

regulatory efficiency. And this is a theme that is

not only present in Fortis's submissions, but also is


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picked up in other submissions. Administrative

efficiency, in my submission, suggests that the

inquiry should only tackle those issues that it really

needs to address, and not take on issues that are best

addressed in another context. And taking that

approach, in my submission, recognizes that the

regulatory process results in cost to all parties, it

diverts time and resources away from other things and,

most importantly, ensures that issues are addressed in

the context where they fit the most.

The practical issue that comes up in the

context of regulatory efficiency, as I propose to deal

with it, is that currently we have underway a revenue

requirements proceeding, the Fortis Energy Utilities'

2012/2013 revenue requirements proceeding. And part

of that application, for instance, is seeking energy

efficiency and conservation funding, or DSM funding,

for those two years with the expressed intent of

dealing in future years with those issues in the

context of a long-term resource plan, the next long-

term resource plan. And this is the bridge that takes

us to that context.

The other aspect of the revenue requirement

-- and I should say that's an issue that has to be

addressed in the revenue requirements proceeding,

because it's driving costs during the test period.


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And so at this point in time, because there is no

long-term energy efficiency request in place that

takes us beyond 2011, it has to be addressed in the

context of this revenue requirement. So whether or

not that's the right place in the future is an open

issue, and Fortis Utilities have expressed the view

that it's in fact a long-term resource plan issue that

should be placed there going forward, but for the time

being that's an issue that is driving costs in the

test period and has to be addressed there.

Another issue that has to be addressed in a

revenue requirement proceeding is the allocation of

costs to the alternative energy class of service, or

line of business, as it were. In the context of a

revenue requirement, the fact that the Fortis

Utilities have this line of business means that there

are costs that are reducing -- there is an allocation

that is reducing the natural gas costs recovered in

the revenue requirement, and allocating those costs

over to be recovered from alternative energy

customers. And so that's an issue that is affecting

the final rate that is set for natural gas customers,

and has to be addressed in that context.

The Commission IRs in the revenue

requirement also deal with biomethane and natural gas,

and -- natural gas vehicles, pardon me. And I've done


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an approximate breakdown just to give you the sense of

the extent of the overlap, particularly in relation

with EEC. The Commission staff has filed its first

round of Information Requests in that proceeding, and

they filed 720 Information Requests, and 173 of those

deal with EEC. There are approximately 67 dealing

with biogas, approximately 49 or 50 dealing with

natural gas vehicles, and approximately a dozen or so

dealing with alternative energy systems.


For the other interveners there is 173

other IRs, and 46 of those are dealing with the EEC.

So if you combine those, if you combine those group of

IRs, if you combine those group of IRs effectively,

you have 200 IRs relating to EEC alone. And that

suggests the import of dealing with those issues in

context of the revenue requirements application.

To give you an example of the overlap with

respect to those issues, the IRs contained in the

revenue requirement deal with the guidelines by which

the EEC NGV eligibility and incentive amounts are

determined, and the eligibility of EEC incentives for

NGV and who's eligible for NGV. They also include

incentives, deal with incentives relating to a third

-- dealing with incentives under a third party model,

will they be offered to private companies who provide


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thermal energy services and so on? So these issues

are being picked up in the revenue requirement as

well.

Now, that's not to say that there can never

be IRs dealing with the same topics in multiple

proceedings, but in terms of -- this inquiry is

something that's being layered on top of the

traditional types of proceedings, and in my submission

it's unnecessary for those issues to be addressed in

the context of this inquiry when they're also being

addressed in the revenue requirements at the same

time. And we can expect determinations potentially on

the same issues at the same time in two parallel

proceedings.

The second consideration deals with the

administration of justice, and as I said, it sounds

like a very high principle, and it is, but it has a

very practical application in the context of

litigating issues that have been litigated previously

in the context of the same facts and policy or legal

issues, relitigating legal issues that should remain

the same regardless of the policy and evidence any

changes in those things.

At paragraph 7 of the written submissions,

we highlight what the past proceedings have been. I

won't dwell on those except to say that they include


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the NGV proceeding, the consideration of alternative

energy systems in the revenue requirement application

in 2010 and 2011, and the biomethane application and

past long-term resource plans.

Now, the important point with respect to

these applications is that they were brought forward

putting forward all of the evidence with respect to

these types of businesses. And in terms of the --

there is a broad -- and it's easy to see there is a

broad connection between these offerings in the sense

that they are initiatives designed to respond to

changes in the customer values and changes in the

policy framework going forward. But at a level below

that, they have different considerations that arise.

And each time one of these applications has been

brought forward, it's been done in a comprehensive way

that deals with the rate design issues, deals with the

policy issues, deals with the jurisdictional issues,

all in a comprehensive way.

So the important point to stress in the

context of the administration of justice is that they

were founded on customer and policy drivers, those

applications, that remain equally true today as they

did when those applications were filed.


The expectation is that the evidence on


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those points would be the same today as it was when it

was filed in the course of those applications that

were heard within the last two years.

The nature of the customer benefits and

risks were the same, in the context of those

applications, as they would be today. And they were

dealt with in a comprehensive manner. The

jurisdictional and legal issues are the same today as

they were when they were dealt with in those

proceedings. And in some cases, particularly the NGV

decision, it's only -- the evidentiary record has only

recently been concluded and the decision is still

outstanding. And the same is true with the

application relating to EEC funding, with specific

regard to natural gas vehicles. The decision is still

outstanding and the evidentiary record only recently

closed. And the expectation would be that the

evidence on those issues would remain the same as it

was when the evidence was first filed in the context

of those applications.

The biomethane application, which was --

which proceeded the NGV applications, but it

contemplated a two-year pilot, and the two years was

of significance because it contemplated that enough

time would pass to allow an assessment to occur after

something had actually happened on the ground. And


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we're only in the beginning stages of getting that

pilot running at this stage, and so to examine these

issues now, when it's contemplated that there will be

a review after two years, examine the same issues, but

examine them before we have a real track record with

respect to the success of the pilot, in my submission,

doesn't make good sense.

Now, touching on the principle of the

administration of justice, these points go further

than just dealing with the issue of administrative

efficiency and dealing with things in multiple

proceedings, and saving people resources. The

administrative law concept that these fall under the

umbrella of is something referred to as abuse of

process. The name sounds sinister. It's not dealing

with the intention of the parties, it's directed at

the integrity of the process and not the intention of

the parties in terms of how things are proceeding.

But what it says is that you can't proceed with the

idea in mind that re-litigating the same issue is

going to result in a more accurate or better result

the second time around. And if an issue is re-

litigated on the same facts, or a legal issue is re-

litigated, where the result should be the same in each

circumstances, to re-litigate those issues results in

a waste of judicial resources and a waste of the


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resources of the parties involved in the proceeding.

Now, if the outcome differs on the same

factual record, or the legal issues are dispensed with

differently, the inconsistency in and of itself

undermines the process. And so those principles, in

my submission, have to be taken into consideration

when setting the scope of this inquiry and determining

the depth to which the Commission should be looking at

issues that have been addressed, and addressed on a

comprehensive record in prior proceedings.

Now, this takes me to my third

consideration, which is that of substantive fairness.

And it's related to the abuse of process submission,

in the sense that there has to be some sort of

finality to decisions that have been made by the

Commission. And there are obviously reconsideration

provisions. There are provisions in the Act that

recognize that stare decisis doesn't apply. In other

words, the Commission is not bound by its prior

rulings. But there is an expectation, in my

submission, in any administrative tribunal, that

decisions -- that there will be an element of finality

to decisions that have been made. And the reason that

is important is because of this substantive fairness

consideration that arises when you have parties that

rely on the decisions of the past in moving forward.


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And this is a good example of why it's important to

uphold the decisions of the past and to not revisit

them.


This is addressed in paragraphs 18 to 23 of

the written submissions, and if I just turn there.

The key consideration in this context is that -- and

what we focused on in the submission is that of the

alternative energy system rate schedules that are in

place as a result of the revenue requirements

proceeding. We focused on that in the written

proceeding, but there is a similar theme that applies

in the context of past decisions with respect to

biomethane, with respect to EEC, and with respect to

natural gas vehicles.

But in the context of alternative energy,

in paragraph 18 it identifies the aspects of the

approval that came out of the revenue requirements

proceeding, the 2010-2011 revenue requirements

proceeding. This was a product of a negotiated

settlement but it was approved by the Commission. And

you'll see in items (a), (b) and (c) within paragraph

18, what you have approved there are the rate

constructs for the Fortis Utilities to establish an

alternative energy services class of service within

the utility. And there is no question that those rate


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constructs were approved as rate schedules, they're in

place as rate schedules today, and they'll remain in

place subject to a Commission order to the effect that

they are not.

But what the issues that are being raised

in respect of alternative energy services, and one in

particular that we highlighted in the submission,

suggest is that that approval could somehow become

null and void at the end of this year, merely because

the term of the revenue requirement was a two-year

revenue requirement.

Now, we've included submissions there with

respect to the interpretation of the NSA that suggest

that that can't possibly be the interpretation of the

NSA that was intended. But the important point here

is that there has to be some ability for parties, like

the utilities that make the application for these

things, to take for granted that the Commission

considered the evidence in determining whether to

approve the negotiated settlement, considered the full

body of the evidence which included evidence factual

and policy, and determined that that aspect, that rate

structure that was a component of the settlement was,

for all purposes, just and reasonable, and approve

that rate schedule. And the utility that applies for

that has to be able to rely on that going forward,


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without the threat or the potential that someone is

going to come along and make changes to it in a short

period of time that is contrary to what the expressed

intention of the NSA was.

The questions in the submissions, or sorry,

in the staff working paper are: Does an approval of a

NSA represent a statement of Commission policy? And

that may be an issue that can be considered going

forward, but what it speaks to is when matters should

be addressed in an NSA and when they aren't. If

that's an issue that we need to address, so be it.

But the issue shouldn't be whether past orders of the

Commission expire, expire because someone has

complained about it or because the Commission wants to

look at the issue again.


The prospect of the contrary

interpretation, that would allow this to remain an

issue, does have implications for negotiated

settlement processes generally, and in my submission

it would be something that would be of interest to

most utilities and most participants in an NSP process

to determine how much stock they can put on an NSP

that's -- or an NSA that has been negotiated by the

parties in good faith.

So I turn to now to the issue of generic


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versus a specific proceeding, and I've heard my friend

Mr. Miller's submission that staff would like to see

this focused on Fortis Energy Utilities. And that

would be consistent with what Corix's submission is,

as I understand it, as I read it. In my submission,

to take that approach would ignore the similarities

between the two obvious examples of companies that

offer these services: Fortis, Corix, and other smaller

utilities as well. But there are similarities in

these business models, particularly that with Corix,

that you can't help but be speaking to when you speak

with respect to the business model that's being

pursued by the Fortis Energy Utilities.

And in my submission, it is vitally

important that the appearance of a double standard, in

effect, with respect to requirements that apply to

Fortis versus those of its competitors such as Corix,

is very detrimental, in terms of the competitive

landscape. And the Commission should be avoiding that

by phrasing the issues generically and recognizing the

fact that the decisions that they make in this

application are going to impact more than just the

Fortis Utilities. And to that end, I'll be making

submissions with respect to how the process should

unfold, but this ties in with that. In effect, call

it by any name that you wish, but in effect the Corix


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letter is in substance a complaint. It's a "me too",

but it's in substance a complaint, and it's directed

at Fortis as a competitor. But there should be room

in this inquiry regardless of how the issues are

framed, that Fortis should be able to explore the

similarities that Corix's business shares with the

business model that they're pursuing.

Now, I'll speak very briefly on the issue

of hearing costs, and only because it's a concern to

the Fortis Utilities, and the submission that we will

make in the context of this procedural requirement is

that the issue of costs, of hearing costs, and the

dispensation of hearing costs, and how they should be

recovered, should be an issue that's addressed in the

context of the inquiry at the conclusion of the

inquiry, once the scope has been determined, and once

the issues -- the evidence is out and the evidence has

been heard.

And this has effectively three aspects of

this. And that is that the first aspect is that to

the extent that this is going to be an inquiry that

impacts more than just Fortis, whether it's explicitly

related to Fortis or whether it's related to Fortis

only and impacts others, or whether it is framed in a

generic sense, there are multiple public utilities

that are involved here that will be affected by it.


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And so the first issue with respect to costs is,

should these costs be all allocated to a single

utility, or are they multiple utility costs, of the

hearing costs?

The next aspect of this issue is, are these

costs really alternative energy costs within the

Fortis Utility? Are they gas costs or somewhere in

between? And that issue should be spoken to as well.


The third issue is one that I won't

belabour, but it relates to the nature of the

allegations, some of the allegations in the ESAC

complaint. Now, in the context of -- ESAC has put

forward its position with a very heavy hand and in the

context of a litigation dispute in the courts, which

this -- and I'm drawing that analogy because we have

here a complaint that's been leveled against Fortis.

In the context of that, that party would have to prove

those allegations, and if they were unable to prove

those allegations, they should have cost consequences.

And in my respectful submission, if the more heavy-

handed allegations that ESAC has included remain part

of its complaint and we proceed forward, there should

be a live issue with respect to how much of the costs

of this inquiry should be allocated to ESAC in the

event that they're unable to prove their allegations.


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Now, the final issue on scope that I intend

to address is the framing of the issues. This is

addressed starting at paragraph 72 of the written

submissions. You don't need to turn there, but in

effect this is an important issue to the Fortis

Utilities, that the presentation of the inquiry scope

has to be done with the utmost care and balance to

ensure that there is a full consideration of issues

that deal with the positives of Fortis offering these

services from a customer perspective, and from a

policy perspective, that deals with those as well as

the considerations that are prevalent and predominate

the staff working paper issues statement, in my

submission, that deal with the risks and the

competitive concerns.

And the issues themselves, in my

submission, these need to be phrased in a manner that

is more neutral than is set out currently in the staff

issues paper. And I'm not trying to fault the way

that they were drafted, but those, the way they're

phrased, look more like IRs than the scoping issues

for an inquiry. And in my submission, when a document

is coming from the Commission Panel and scoping the

issues for this inquiry, it has to be done -- the

issues have to be phrased in a way that does not take

on the look of an information request, which by its


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very nature tends to be more adversarial than

adjudicative. And that's all I'll say in terms of the

formulation of the issues, but I would emphasize that

in terms of procedural fairness that's a significant

concern to the Fortis Utilities.

So subject to questions, those are my

submissions on scope.

COMMISSIONER RHODES: I have one question. I'm not sure

I understand where you're coming down on the generic

versus Fortis oriented.

MR. GHIKAS: I'm sorry. In my submission it should be

within -- if you set aside the issues with respect to

energy efficiency, my submission contemplates that

those issues would not be addressed and that the scope

of the submission would be -- the scope of this

inquiry would be limited to alternative energy which

is the subject matter of the complaint and an issue

that is of obvious interest to many.

If you put aside the other issues in the

context of the alternative energy business, in my

submission that should be generic in the sense that --

and as it relates to procedure, we have other

alternative energy providers that should be involved

in terms of putting panels forward and being subjected

to cross-examination and that type of thing.

COMMISSIONER RHODES: Thanks.


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COMMISSIONER O'HARA: Mr. Ghikas, my question was along

the same lines. You mentioned the appearance of a

double standard concern. So could you still expand on

that?

MR. GHIKAS: Sure. I believe, just thinking back on what

I said, but I believe what I was trying to say is that

there are obviously competitors in the alternative

energy service market, and Corix is one of them and

we're one of them.


And the fact that an inquiry is ongoing

with respect to Fortis alone has business

ramifications. It has favourable business

ramifications for Fortis's competitors and has

unfavourable ramifications for Fortis itself. And

that's really what I was getting to, but there is a

level below that. That's a practical issue. But

there is a level below that which is that an inquiry

that is limited in scope with respect to only applying

to Fortis has to hinge, in my submission, on an

assumption that there is something different that

Fortis is doing. And where that concept is coming

from is in a phrase, in my submission, that appears

time and time again in the submissions and even in the

procedural order if I recall, or the staff working

paper I believe it is, and that is that of a


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traditional gas utility. And in my submission, basing

an inquiry that is focused on Fortis on the premise

that it's a traditional, quote/unquote, gas utility

and is now doing something different is a flawed

premise because the Utilities Commission Act doesn't

define "regulation" by virtue of the different

services that are provided. It regulates public

utilities.

And what Fortis is doing as a regulated

public utility service in the context of alternative

energy is no different, in my submission, than what

Corix is doing and what Central Heat has been doing

for 25 years and what the place on the Island, its

name is Dockside Green, is doing. There's really no

difference. The only difference that you can really

point to is the fact that Fortis has, to date, been a

natural gas utility and is now intending to be a

provider of energy services that go behind natural

gas.

And so in my submission, the inquiry

shouldn't be founded on the notion that it should be

focused on Fortis merely because of the business it

undertook in the past. It's not -- that speaks to a

pigeonholing of Fortis and trying to keep it in a box

that really doesn't have a valid basis in the

legislation.


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COMMISSIONER O'HARA: So you are saying that there would

be less of an appearance of a double standard, that

should the Commission proceed with a generic inquiry,

there should be submissions, not only from Fortis but

also from companies like Corix or Central Heat, and

they should testify as well, should we proceed with

the public hearing?

MR. GHIKAS: That's my submission. The focus of Fortis's

attention is obviously on ESAC and Fortis -- Corix,

pardon me -- by reason of the fact that they have

filed letters with the Commission complaining about

something which we see as being very similar to the

business of their undertaking on a very similar

business model. So that -- yes. I guess the short

answer is, yes, I think it should be generic.

COMMISSIONER O'HARA: Thank you, Mr. Ghikas.

COMMISSIONER COTE: Mr. Ghikas, during Staff's submission

they spoke to, what I understood, the endgame of this

inquiry being determination of a set of principles

which would hopefully guide future understandings. I

take from that that it's assumed that these principles

would provide guidance for future applications and

ultimately for decisions.

You spoke a lot about regulatory

efficiency. In your mind would this not assist

regulatory efficiency in the future?


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MR. GHIKAS: Indeed, guidelines can be a very efficient

mechanism and I think they're employed really quite

successfully in terms of things like CPCN guidelines,

resource planning guidelines and that type of thing,

and they do enhance efficiency in many respects.


The caveat that I would add and the caveat

that we elaborate on in the context of written

submissions is that we have to keep in mind what -- my

answer would change depending on the nature of what

the guidelines were trying to dictate. And from your

question, I am inferring that what you're talking

about is things that inform the nature of

applications, how they are brought forward, this type

of thing. But my answer would change in terms of

whether guidelines are an appropriate tool, if they

were, for example, to direct aspects of what I would

submit are within management's control to decide.

Things like how -- one of the examples, I guess, is a

good one just off the top of my head in the staff

working paper is: Should business cases be brought

forward for review by the Commission?

Now, in my mind, if there was a guideline

that suggested something to that effect, that, you

know, a guideline that said that all utilities must

bring forward business cases beforehand, the Fortis


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Utilities would object to that simply on the basis

that the guidelines are trying to do something that

they shouldn't be trying to do, given the Commission's

jurisdiction to regulate.

So, and maybe if I need to elaborate on why

I say that's not appropriate, but it really comes down

to the Commission's jurisdiction being one of a rate

regulator, and there is an opportunity to review

estimates in the context of CPCNs, for example. But

that's where it's triggered. It's not in the context

of dealing with the minutiae or the micro-management

of the utility business, because I think the courts

have said quite clearly that that is outside the scope

of the Commission's jurisdiction.

So, really what I'm getting at is, at the

procedural level I think they are quite efficient, and

they are quite helpful. And indeed the Fortis

Utilities want to make perfectly clear that they see

some benefit in dealing with issues and bringing them

to resolution, because dealing with these issues time

and time again is not efficient from the company's

perspective, any more than it is efficient for anyone

else's perspective. And it would be nice to be able

to put some of these issues to bed finally to the

extent that we can, and to the extent that it's

appropriate to do it here.


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Does that answer your question?

COMMISSIONER COTE: I think so.

MR. GHIKAS: Okay.

THE CHAIRPERSON: I've just got one question. You

confused me a little bit in your discussion of

negotiated settlement agreements and what flows from

them. Are you saying that when a negotiated

settlement agreement expires, that the parties

involved would be constrained in what they could

negotiate in a future settlement?

MR. GHIKAS: No. No. That's not -- no, and I'm sorry if

I left that impression. The context in which I was

making the submission is that there is a particular

issue in the staff working paper that effectively

makes an issue in this inquiry, whether or not the

approval of rate schedules -- the one that I took you

to at the beginning, for example, the rate constructs

for the alternative energy services, would expire at

the conclusion of the term of the settlement

agreement. And my submission was that rate schedules

that were approved by the Commission remain in place

beyond the end of that settlement agreement until they

are changed by the Commission, which is what the Act

says.

THE CHAIRPERSON: Okay. So, just to follow up on that a

little bit -- since I'm going to be sitting in on the


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Fortis rate review, this is of assistance to me in

that procedure.

MR. GHIKAS: Mm-hmm.

THE CHAIRPERSON: So if in the Fortis 2012/13 rate review

based on the evidence before it there was some

different conclusions with respect to rate schedules,

you're not saying that the Commission is constrained

in making changes in that regard?

MR. GHIKAS: No. The Commission is absolutely free to

make determinations based on the evidence before it,

and indeed that's what it should be doing. And not

constraining itself by prior decisions. The

implication of the question in the -- and if the

evidence has changed, and if the evidence dictates

that a change is necessary to particular rate

schedules, then that would have to follow, if that's

what the Commission believed were just and reasonable,

based on the evidence before it.


The notion that I was objecting to was the

automatic expiry of rate schedules at the conclusion

of the term. The rate schedules, the Act contemplates

that rate schedules are put in place until the

Commission changes them and amends them, and that's

really what -- I was objecting to that being an issue

because to the extent that remains an issue it causes


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all sorts of business uncertainty in terms of whether

the company, the dollars invested so far on the

assumption that there is a rate schedule in place, are

at risk, and indeed if further money can be spent

without it being at risk of having the rate schedule

evaporate suddenly at the end of the year.


MR. GHIKAS: Thank you.

MR. MILLER: Mr. Gustafson is next.

SUBMISSIONS BY MR. GUSTAFSON:

MR. GUSTAFSON: Thank you. Mr. Chairman, Commissioners,

we appreciate this opportunity to come before you

today to address the issues that were outlined in the

Energy Services Association of Canada letter that was

filed with the Commission dated April 27 of this year.

The issues at the heart of this proceeding

are not new. What is new are questions related to the

manner in which Fortis is operating in the alternative

energy services or AES field. Fortis suggests that

there is nothing new in the way it is conducting its

business, and that Mr. Ghikas has mentioned previous

proceedings and evidence filed in those proceedings

and asserts that nothing has changed. We're not so

certain of that and we have questions that we believe

need to be examined in terms of the manner in which

Fortis is in fact operating its business in the AES


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space.

The concerns identified in the ESAC letter

emerged as a result of a number of announcements that

were made earlier this year by Fortis in terms of new

AES projects, and it is those announcements that

prompted the focus and the concern in terms of exactly

how Fortis is operating its business, and it raises a

number of questions. We don't come with allegations,

we come with questions.

Let me touch on the question of

consultation. Fortis has spent considerable time this

morning reviewing the previous regulatory history, and

has asserted today and in its written submission that

this ground has been covered and the matter is dealt

with and ought not now to be revisited. And we submit

that that just is not so.

In conjunction with the Fortis long-term

resource plan review in 2010, there was to have been a

process of public consultation with key stakeholders,

and while Fortis acknowledges the importance of that

process, the fact is that Fortis failed to notify and

to consult with a whole set of some of the most

important stakeholders, namely the parties it now

acknowledges as being its competitors. And we suggest

that it is disingenuous of Fortis to say that ESAC and

its members are somehow at fault when it was Fortis


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who, with the full knowledge of all of the issues and

exactly who its competitors were in the AES space,

chose to exclude those very parties from the

consultation process. So when they say that they

engaged in consultation with select stakeholders, they

really meant select.

Beyond that, ESAC and its members really

had no reason to actively monitor on an ongoing basis

proceedings before this Commission on the off chance

that issues of relevance or concern might be touched

upon. I don't believe that's a fair or reasonable

expectation for ESAC's members to be expected to rise

to that kind of standard of vigilance. The failure to

consult with ESAC and its members, in our submission,

renders the stakeholder consultation process

effectively meaningless. Had proper consultation taken

place, and proper notice been given, and an

opportunity to be heard in that context, it may be

that these issues could have been dealt with at an

earlier stage.


But in my submission, the consequences of

that failure fall squarely on Fortis. In one breath,

Fortis tells the Commission how valuable and important

the consultation process is, and yet today the

suggestion is that the failure to consult with a whole


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set of key stakeholders is meaningless.

Despite the fact that Fortis excluded a

number of key stakeholders from the review process, in

relation to the long-term resource plan, the

Commission's decision in that particular matter makes

it absolutely clear that the issues that are before us

today were identified as something that would require

further consideration in a future hearing in the not-

too-distant future. And that is precisely why we're

here today.

I won't go into any detail. The issues

that are of concern to ESAC and its members, those are

outlined in the letter of April 27th and in more detail

in the written response that we filed with respect to

the Commission staff's outline of issues and scope

matters.

In our submission, the fundamental issue is

quite simple. We're concerned to investigate just

exactly how Fortis is conducting its business in the

AES space, and then to determine whether it is doing

so fairly and appropriately. In this respect, our

focus is on the business activities that are not

specifically regulated under the Utilities Commission

Act in a space where there can and should remain open

and fair competition.

This will lead to a consideration of


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whether existing rules governing the conduct of Fortis

as a regulated utility are adequate and to assess

whether any changes are required in those rules. And

finally, we will want to know that the rules are being

followed and will be followed in the future.

Our concern, as I said, is to ensure a fair

and level playing field.

In fact, this topic has been considered

previously by this Commission, and it generated a set

of guidelines that my friend referred to as the RMDUM

guidelines. There are a number of related issues

ranging from potential abuse, to abuse of the

utility's monopoly position, to ensuring no cross-

subsidization, to ensure that no risk is imposed on

the utility's ratepayers, no abuse of dominance in the

market to impede competition in an unregulated space.

A quick survey actually shows that this

issue has been a topic of concern really broadly

across North America. At least 12 states have

relatively recently considered the issue. It was

considered recently in Ontario with the Ontario Energy

Board and Enbridge Gas. So, you know, this is an

important issue. The interesting outcome of those

proceedings has been a degree of consistency in the

determination of the need to be vigilant in overseeing

how regulated utilities operate in non-regulated


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space, and those decisions are, in our view,

consistent with the principles that this Commission

established in the RMDUM guidelines.

And in our submission, the application and

enforcement of the RMDUM guidelines would go a long

way to satisfying our concerns if we were confident

that we knew enough about what Fortis was doing to

ensure that those guidelines are being complied with.

It may be, however, that it's time to review those and

ensure that the guidelines are adequate to deal with

circumstances that are before us today.

A specific concern of the Energy

Association of Canada relates to fairness of

competition with respect to fair, open and transparent

access to EEC funding. EEC funds are derived 100

percent from Fortis's ratepayers. They are allocated

and dispensed in the discretion of Fortis, and it's

vital to ensure that those funds are being used in a

way that benefits the ratepayers, and not to enhance

return to the shareholder. And particularly not if

the funds are used in a predatory or anti-competitive

way.


We want to be certain that Fortis is

expending the EEC funds appropriately, and not in a

way that has the effect, whether intended or not, of


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eliminating competition in AES. We see, for example,

the announcement of some $800,000 of funds being

provided to the Delta School Board, but we are not

able, based on the information provided, to understand

how that figure was arrived at and whether there was

any sort of competitive process related to this

project.

In this context, we believe it's incumbent

on Fortis to submit evidence to describe in detail how

it's operating in the AES space, how EEC funds are

being applied and allocated.

Turning to address specifically some of the

comments made by my friend this morning. He addressed

three broad categories: regulatory efficiency,

administration of justice and substantive fairness,

And I'll just touch on each of those.

With respect to regulatory efficiency, we

believe that it is by far the most efficient way to

deal with these issues by focusing on them squarely,

rather than touching on them peripherally or

tangentially in the context of other hearings, where

the focus is really not on the issues that are before

us today. Multiple processes have taken place, but

none of those have focused squarely on the issues that

are of concern today. And there is a real danger in

following that path, that you end up with an


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unintended result, where approval of an application

with a specific focus touches on or relates in some

indirect and unintended way to another matter. And

that, I think, is at the heart of what Fortis is

complaining about. It suggests that all of this has

been dealt with and approved when, in fact, the focus

of each of those proceedings has not been on the

issues of concern today, but on other matters. And

now it's taking the position that somehow approval for

this activity ought to be implied.

Mr. Ghikas said that issues were picked up

in the revenue requirements application. But in my

suggestion, that's not an appropriate way or a fair

way to ensure that all interested parties have an

opportunity to be heard on those issues. And so that

proceeding in this specific matter, focused on the

issues of concern, is absolutely the most efficient

way to deal with this matter. And indeed it may

actually help the -- speed along the process in

dealing with the revenue requirements hearing if the

issues before us today are dealt with first and then

proceed following that with the revenue requirements

hearing.

Turning to administration of justice, again

I think he suggested in that context that the evidence

is all the same. And again, we're not certain of


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that. And we would like the opportunity to examine

that question, and be certain that, in fact, we

understand how Fortis is operating in this space, and

that it's doing so in an appropriate way. And we

don't believe that the issues of concern here have

been dealt with in any other proceeding in any sort of

comprehensive way.

Turning to substantive fairness, the

suggestion is that there needs to be finality in

decisions. And we don't really disagree with that

principle applied properly and fairly, where the

issues of concern are dealt with in a comprehensive

way in a proceeding before this Commission. But we

submit again that that just hasn't happened to date.

With respect to the concern that somehow a

decision is going to expire, I'm not sure that I

follow the concern there. The Commission has plenty

of scope under the Act to make interim orders and to

do what it needs to do to deal with that kind of

situation.

With respect to the question of whether

this process should be generic or specific, our view

is that it should be specific to Fortis, and we

support the Corix position in that respect.


Of course there are similarities with other


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utilities, but in our submission that's not the

determinative factor here.

The suggestion was that there may be the

appearance of a double standard. Well, I don't think

it's possible for us to ignore the elephant in the

room. Fortis is not the same as Corix. It's not the

same as the members of the Energy Association of

Canada. It is a large, integrated public utility,

regulated. It is the dominant player in the

marketplace, and I don't think that we should try to

ignore that and suggest that maybe special attention

ought not to be paid to it. The Utilities Commission

Act says that Fortis should be regulated. The RMDUM

guidelines, I think, reflect a previous decision that

it's important, and the reasons why it's important to

regulate the activities of a public utility in an

unregulated space. If it were not for the fact that

Fortis was regulated under the Utilities Commission

Act, it would be subject to supervision and oversight

under the Competition Act of Canada. So there's no

question that public policy one way or the other

treats parties like Fortis in a manner different than

small, independent players in a free and competitive

marketplace.

I think, with respect to the question of

procedural fairness, the concern expressed by Mr.


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Ghikas this morning was that they were more in the

nature of an information request. That might be, but

I think what that tells us is that Commission Staff

have questions as well. There's a lack of a proper

and full understanding of how Fortis is operating in

this space, and that is precisely why we're here to

investigate and to learn what they're doing and make

sure that their business activities are being

conducted in a fair and appropriate way, consistent

with the RMDUM guidelines.

Just one final comment if I may, not really

a scope issue. There seems to be a suggestion in some

of the submissions that ESAC and its members are

somehow, in making this complaint, evidencing an

opposition to green initiatives, energy conservation,

clean energy. Nothing could be further from the

truth. ESAC and its members are eager to participate

in programs and initiatives that support and enhance

the objectives of the provincial government in respect

of the Clean Energy Act and energy conservation. So I

just wanted to make that statement on the record so

there's just no doubt in anybody's mind about what

might be underlying the letter that initiated this

process from ESAC.

Thank you, those are my submissions.

COMMISSIONER O'HARA: Mr. Gustafson, first for the


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benefit of the Panel, would you just take a couple of

minutes to give an overview of ESAC? And just by way

of background, I did go to the website but I didn't

find enough sort of answers to my questions. So first

just basics. When was ESAC established? Second,

number of members today. Third, governance structure.

And fourth, the specific links to British Columbia the

way ESAC members go about their business.

MR. GUSTAFSON: I'll be able to answer some but not all

of your questions and I'll come back with an answer in

writing to the others.

COMMISSIONER O'HARA: That would be fine.

MR. GUSTAFSON: Or I may be able to do so a little bit

later in the proceeding. I don't know exactly when

ESAC was created. I can tell you that its members are

-- let me give you the list of the names. Ainsworth

Ameresco, Direct Energy, Honeywell, Johnson Controls,

MCW, Custom Energy Solutions, Siemens, and Trane. So

I think when you know that information about who the

members are, it probably gives you a pretty good idea

of the businesses in which they're involved. And most,

if not all, of those members conduct business in

British Columbia.

I'm not sure if I've addressed your

question adequately or not at this time, but I'm happy

to follow up.


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COMMISSIONER O'HARA: So that is the number of members,

that there are no other members, then it's --

MR. GUSTAFSON: That's my understanding, correct, yes.

COMMISSIONER O'HARA: How about, then, the governance

structure?

MR. GUSTAFSON: I don't know what the governance

structure is, but I'll come to you on that.

COMMISSIONER O'HARA: Okay.

MR. GUSTAFSON: I do know that there is a board of

directors, and I presume that each of the members has

representation on the board, or that there is a

process to elect directors, and there is a Chairman or

president of the association.

COMMISSIONER O'HARA: Okay. That's helpful. And then I

also had the second question.

Coming back to this Fortis-specific focus

in the inquiry, perhaps you can still try to help me

out here, that, what would be best from ESAC point of

view. Would it be a proceeding that, with your

complaint as a major focus? And then from that

resolution of the complaint, some general guidelines

might fall out as well almost like as a by-product?

Or on the other way, which is the generic inquiry,

where a by-product would be a solution and resolution

of your complaint as well.


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MR. GUSTAFSON: I think the former of those, in that we

would prefer to focus, if possible, on the issues that

are at the heart of the complaint that was filed. And

we do envisage and understand, of course, that the by-

product of that process may well be a modification of

guidelines that are in place that are of more general

application. But our preference would be to focus on

the issues of concern to ESAC and its members, to the

extent we can.

COMMISSIONER O'HARA: Okay. Thank you, Mr. Gustafson.

THE CHAIRPERSON: I just have one general question.

RMDUM, of course, was put in place prior to 2007, as I

understand it. And therefore it didn't contemplate at

that time the government's policy initiatives with

respect to the greening of British Columbia, if I put

it in simple terms. And I am pleased to hear that

your association is congruent with that. But I think

as Mr. Ghikas mentioned, or at least inferred,

obviously Fortis is trying to follow the same

objective in bringing forward some of its AES

solutions. And do you think that given that the

environment is different with respect to at least that

portion of the government policy, that that in itself

might require -- might make a review of RMDUM an

exercise that would be appropriate at this time?

MR. GUSTAFSON: I'm not certain that I would go that far,


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and the reason I would say that is that the principles

that underlie the guidelines in RMDUM are relatively

general, and I think, in my review of those

principles, they apply and can apply despite the

changes that have occurred since 1997, when these

principles or guidelines were developed and

introduced. It's not clear to me that a change is

required. At the same time, I won't pretend to fully

understand exactly how Fortis is operating in this

space, and it may be when we understand more about

what they're doing and how they're doing it that some

modification of the guidelines may be appropriate to

reflect the new circumstances.

But I think you will see that the

Commission at that time did a very good job in

outlining a set of principles that have stood the test

of time and can continue to stand and to guide the

operations of Fortis and other utilities.



MR. MILLER: Corix is next, Mr. Chair.

THE CHAIRPERSON: Mr. Miller, perhaps we could take a

short break at this time. If we could be back here 15

minutes from now.

(PROCEEDINGS ADJOURNED AT 10:28 A.M.)

(PROCEEDINGS RESUMED AT 10:46 A.M.) T20


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MR. GUSTAFSON: Mr. Chairman, Commissioners, with your

indulgence I'll try to address Commissioner O'Hara's

question regarding the ESAC organization.

The origins of the organization trace back

to an earlier association called the Canadian

Association of Energy Services Companies that was

formed in the early to mid-1990s. That organization

eventually was dissolved, I guess, or no longer

active. Its core members, however, were involved with

a provincial government task force here in British

Columbia called the Green Buildings B.C. Program, and

were involved in the task force there. And that

program related to energy efficiency in public sector

buildings, and indeed a number of members of --

current members of ESAC have implemented projects

pursuant to that particular program.

ESAC itself -- and a couple of the members

are here but they're not exactly sure when the

organization was formally incorporated but it looks

like it was sometime in the fall of 2010, following a

period of time of the informal activity amongst the

members. It's a national organization. Each member

is represented on the board. Executives are appointed

and there is a paid, although not full-time, person

who serves as president, and that's Peter Love who is

the gentleman who signed the letter on behalf of ESAC.


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ESAC's members are not identical to the

previous organization, the Canadian Association of

Energy Services Companies, but its core members are.

So they continue from one organization to the other.

And our understanding is that ESAC's members compete

with Fortis in every space in AES except for NGV. I

hope I've addressed your question.

THE CHAIRPERSON: That's helpful. Thank you, Mr.

Gustafson.

MR. MILLER: Mr. Wallace.

SUBMISSIONS BY MR. WALLACE:

MR. WALLACE: Thank you, Mr. Chairman, Commissioners.

I've prepared a bit of an outline of where I intend to

go and I would like to hand that forward, in large

part because it contains a proposed timing list that

would be probably useful in the second stage of the

arguments. It's not necessary -- well, it might be

handy to mark it as an exhibit in case there's later

reference. It's not necessary in that I'm not going

to go beyond it, I don't believe, except in response

to the submissions of others.

MR. MILLER: That would be marked Exhibit C12-2.

MR. WALLACE: Thank you.

(OUTLINE OF COMMENTS OF MR. WALLACE MARKED EXHIBIT

C12-2)

MR. WALLACE: In opening I would like to state that


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Corix generally supports the submissions of the BCUC

Staff and ESAC, except where I may vary from it in my

remarks today, and that would be principally that

Corix does not see NGV or biomethane as necessarily

having to form part of this inquiry, and that their

removal may expedite the inquiry.

I'd like to start out by addressing the

issues that were raised by Mr. Ghikas of fairness,

efficiency, and BCUC credibility with respect to this

matter. Corix does not accept Fortis's submission

that nothing has changed. Corix believes that it is

FortisBC that is changing its historic manner of

operating, not the complainants. For many years, PGI

has operated AES-type businesses under a separate and

distinct entity, Terasen Energy Services, and operated

its EEC programs for the benefit and the sole benefit

of its core gas utility customers.


Both programs now appear to be taking on a

new emphasis or direction, due solely to the actions

of FortisBC. It is normal for the BCUC to revisit

issues as circumstances change, without a formal

review and without a reconsideration. I personally

have attended at many hearings where utilities and

others have raised principles going to revenue

requirements, rate design, or tariff matters, in a


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sequence of cases for reconsideration or for review or

just because circumstances have changed. And it is

our submission that the Commission should not hesitate

because of prior decisions to look at the issues in

this case.

To the extent that Corix did not

participate in some of the prior regulated processes

regarding EEC and AES, it is because Corix did not

understand how directly they might be affected. It

is, in our submission, FortisBC that is consolidating

AES operations with its large gas utility monopoly,

and creating a need to review the framework for both

programs. This inquiry must be able to consider prior

decisions, particularly those involving negotiated

settlement agreements where the scope, or the number

of parties that gets involved is often more limited

and has been in this case than those here today in

light of current circumstances.

That is not to say that prior decisions

should be ignored. The BCUC, or Commission, this

Commission, can address issues of fairness and can

prevent abuse in the course of the proceeding in

dealing with the issues before it.

The fundamental or basic issue in the view

of Corix is, what principles should govern FortisBC in

its conduct of non-gas utility functions, both


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regulated and unregulated functions? Contrary -- or

this view is contrary to what appears to be the view

of Fortis that an operation, if it is a regulated

utility, can automatically be rolled into the gas

utility cost of service. We clearly take a different

view and believe that some of the regulated utilities

of Fortis need to be examined carefully, and the rules

need to be made clearer.

Turning to the scope of the hearing, it's

Corix's view that the issues in this inquiry should be

addressed at a principle level. I think that seems

consistent with the views of FortisBC. It is our view

that it is not necessary in this inquiry to determine

if cross-subsidies are recurring with respect to

specific items or a particular entity, being one of

the sub-utilities of Fortis. Specific expenditures

should be approved or not approved in RRA or LTAP

reviews. The principles and the rules should be set

here, but the evaluation and the dollars and the

individual program can be examined elsewhere. They

may be reviewed here as a good example, but we don't

think the final decision has to be made on the

specifics.

The inquiry should be limited to FortisBC.

The conduct of B.C. Hydro and, for that matter, the

conduct of Corix is not in issue, in our submission.


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That said, Corix recognizes that the principles

established for Fortis can and likely will be applied

to others, where appropriate. And we submit also that

the determination of what is appropriate will have to

be looked at in other circumstances, but where

appropriate, we accept that they likely will be

applied.

The inquiry should cover both EEC and AES.

The core AES and EEC principles that should be

considered include the following: limits on natural

gas ratepayers subsidizing FortisBC shareholders'

competitive endeavours or cross-subsidizing other

forms of energy users.


Related to these are a number of questions:

The need for and the desirability of

individual stand-alone rate structures for each

regulated non-gas utility facility.

The applicability of RMDUM or similar

principles to Fortis non-regulated and non-gas utility

regulated activities. And I think we take a position

very similar to that of Mr. Gustafson on these issues,

that the RMDUM principles still look appropriate to

use, but it is perfectly appropriate to examine them

today in the context of Fortis's activities and the

Clean Energy Act, and changed circumstances since they


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were first brought in.

The appropriateness of gas ratepayers

bearing FortisBC non-gas utility business development

costs.

The availability of EEC funds to non-gas

utility customers including non-FortisBC subsidiaries.

And we think this should be examined in the same way

and considered in the way that B.C. Hydro provides

funding to others as part of its DSM initiatives. One

question should be: Are these funds available to non-

Fortis entities or only Fortis entities, or should

they only be available to Fortis gas utility

customers?

The need for a FortisBC code of conduct to

address issues of customer confidentiality and the

possibility of an unfair market advantage stemming

from gas utility functions.

The review will have to consider basic rate

design principles and most particularly, fairness.

The inquiry will have to consider the Clean

Energy Act requirements and it will need to consider

economic efficiency and price signals. Can the gas

utility revenues be used to subsidize non-gas utility

actions, and in that way change the price signals in

the market, in a competitive market in particular?

The inquiry will have to consider


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jurisdiction issues. Fortis has put those issues

squarely before you today. Our submission is that

those issues should not be determined on a pre-hearing

conference. They will have to be considered very

carefully in light of the public interest, in light of

the Utilities Commission Act, in light of the Clean

Energy Act, and in light of the Commission decisions

and case law and jurisdiction. Those are complex

matters that should be considered after you've heard

the evidence and as part of final argument in reaching

your conclusions in this matter.

And that concludes my comments on scope and

issues.

THE CHAIRPERSON: Could I just get you to elaborate on

one point? You talked about that you don't see this

getting into specifics on how EEC funds would be spent

specifically. You want to keep it on a principles

level. Is that correct?

MR. WALLACE: That's correct.

THE CHAIRPERSON: Now, FEI has applied for its 2012-2013

rate review. How do you see the Commission dealing

with that rate review, given that we --

MR. WALLACE: I expect that in that application, and I

have not reviewed it myself, that in the EEC elements

a very large proportion of it will probably be non-

contentious. They will be traditional DSM


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expenditures directly targeted at and for the benefit

of the gas utility customers. I would think that if

we were to look at it, we could identify those

programs that are in question, and the principles with

respect to those issues would be argued out in this

proceeding and the merits of the number of dollars and

the particular expenditure could be determined in the

other proceeding.

THE CHAIRPERSON: Thank you, those are my questions.


MR. MILLER: Mr. Chair, there is a request for a slight

alteration for submissions from the order of

appearances. The representatives of the B.C.

Pensioners' Organization have a timing commitment, so

with your leave I would slot them in next.

SUBMISSIONS BY MR. QUAIL:

MR. QUAIL: I would like to thank my friend Mr. Miller

and the counsel for the other interveners for

accommodating us. We have a critical thing and it

saves us some nail biting. There may well be time,

but we do appreciate being permitted to jump the

queue, assuming that that's acceptable to the Panel.

I'd like to start out just by commenting

that this is an area of practice, general utility

regulatory work, where who is your friend and who's

your opponent depends a lot on the issue on the table.


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And we actually find ourselves on behalf of

residential customers agreeing with a great deal of

what my friend Mr. Wallace has said on behalf of

Corix. There may not be many other occasions where

residential customers of the utility are in agreement

with Corix, but to a very large extent we adopt his

comments. And this will also streamline things. I

won't repeat a lot of territory except to the extent

that I may make comments that diverge from my

friends'.

On behalf of our clients, we've raised a

repeated concern over the last couple of years in a

number of proceedings coming out of Terasen, now

Fortis. And that is, where it appears that the

utility is seeking to morph itself from being the sort

of one-trick pony, of being primarily the natural gas

distribution utility into being what they themselves

characterize essentially as a more diverse energy

services provider.


MR. QUAIL: And our concern has been that we have a

scenario where, by degrees, potentially the utility is

undergoing that morphing without any real opportunity

to step back and ask ourselves, or the Commission, to

determine is that really the place where it should

wind up? Is that really appropriate under the Act,


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and is it appropriate in relation to the public

interest? One place where we raised this was in the

utility's recent long-term resource plan, and in the

decision of the Commission panel our comment was

quoted, that there is the big question that required

to be answered and that is, you know: What fields of

activity and what lines of business are appropriate to

the utility in the context of a changing and evolving

energy sector? And a very dynamic policy context as

well, as from government and from other quarters as

well. There are no easy answers to these questions.

But in our submission, they need to be asked, or we

can't be assured that the outcome is an appropriate

one.

In another context, I have used the

metaphor of someone seeking to change a camel into a

zebra. So first they surgically remove one of the

humps and then they remove another one. And then they

start painting on stripes and without anybody asking,

"Well, do we really want a zebra?", we sort of have

one. And the concern we've got is that we could wind

up at that place, that space, which has consequences

for ratepayers including potentially assets finding

their way into rate base.

You know, and other implications is that

the captive distribution utility customers


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backstopping lines of business to the benefit of the

shareholders. This causes us real concern.

We're not saying that we're opposed to

endeavours of this nature, but the question needs to

be asked at a high level. And I want to adopt the

spirit of much of what my friend Mr. Wallace said in

that, in those terms.

So, we submit that these one-off

applications need a more comprehensive analytical

context. And that is about the character of a

regulated utility in the evolving energy sector. And

I submit that this inquiry, the springboard of these

complaints provides as good an opportunity for that as

any that will come along.

Pardon me, I'm a little hoarse. I think I

might have picked something up on a plane flying from

Heathrow two days ago, so a touch of laryngitis.

And perhaps even a better opportunity than

a future resource plan proceeding, because we do have

the starting point of some very specific activities

which are probably a good anchor for that examination.

And in terms of shaping the process, I

submit that there is really two objectives that need

to be balanced. And one is to produce a sufficiently

comprehensive analysis to provide context and guidance

for the coming period. And guidance as much for the


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utility as anyone else, but to provide that context to

determine these one-off CPCN and other applications.

So that's one objective. But on the other

hand to keep the process manageable, and avoid trying

to chase down every detail and delve into every

conceivable permutation that could arise in the

marketplace. We say that some of that should -- this

is an evolving story. We need to have an analysis

that addresses the state of the market at the present

time, and of the policy issues, but needs to recognize

the story is continuing to evolve. Initiatives will

arise in the future, but they do need a context to be

properly characterized and analyzed.

My friend, Mr. Ghikas, has raised a number

of essentially jurisdictional questions about

administrative law, procedural fairness and so on.

And again, I would adopt Mr. Wallace's comments that a

procedural conference is not the place for that kind

of -- I don't say that faulting my friend, but my

friend Mr. Ghikas identified issues which, I submit,

properly should be addressed through proper legal

argument when the time comes for that to take place.

But we do disagree significantly with Fortis's

characterization of the boundaries of your

jurisdiction.

And we will be arguing, when the time


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comes, that this Commission has extensive jurisdiction

to deal with these issues in terms of the public

interest. We do not agree with Fortis's

characterization of this Commission as a rate

regulator. That's one of your functions, but you have

many other functions. Jurisprudence and also changes

in legislation make that very clear.

It's often said that utility regulators are

economic regulators. People who say that, usually are

utilities. Usually what they really are suggesting is

that you are financial regulators. You know, economic

regulation is a much broader question that involves

much more in terms of the public good and the public

interest and, in fact, statutory changes have

broadened your jurisdiction even beyond that. And we

say there is a fundamentally societal interest and

economic questions that need to be answered.

Anyway, I'll save the argument into that

until the appropriate time in my submission.


On the issue of the focus on Fortis, is

this just about Fortis or is about other players? In

my submission, that really is not -- not really a live

question. It misses the point, with all respect,

because the issue is the relationship between the

utility and this developing marketplace. There's two


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sides to that equation. There's the utility and

there's the market. You can't answer the question of

what the utility should be up to without looking at

other players in the market. So in my submission it

sort of is a bit of a false question or a straw man to

suggest that that is a specific question that needs to

be determined in some kind of absolute sense. All of

these issues will need to be addressed to answer the

question, what we call the big question of a long-term

resource plan. What is the nature, properly, of a

regulated natural gas utility in the emerging context

of our energy sector? That's the real question, and

that requires full context.

Finally there's the question -- nobody has

really address this -- of evidence and what kind of

evidence should be heard by the Commission, and no

doubt there'll be a wide range of it. One category of

evidence that we submit is going to be important is

high-level analysis of the sector, both in British

Columbia and perhaps more generally, that the process

would be enriched if the record includes high-level

studies of the emerging energy market and the role of

regulation and regulated utilities within that. And I

anticipate that our clients will likely be filing some

evidence, perhaps of that character, but this is going

to be an important underpinning of what takes place.


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In terms of the question of whether this is

a generalized generic inquiry or an examination of the

particular complaints, maybe I'm repeating myself but

I don't think that the Commission can properly resolve

the complaints without first examining the broader

context. So again I think there may be a false

dichotomy there. I think that to do the job properly

of examining the complaints, that more sort of

generalized high-level analysis must take place and it

must ultimately inform the determination on the

particular complaints.

So subject to any questions you have, those

are the submissions that I've got at this point.

Ms. Worth and I will be scurrying out of

here in about a half an hour's time, so we probably

won't be available to speak to the question of

timetable and we're content to abide by whatever that

discussion produces.

COMMISSIONER O'HARA: Mr. Quail, you hinted at it already

in your submission, but I still have to ask this. I

recall from one of the earlier proceedings for this

proceeding, you brought up this issue of

transformation and emerging new technologies and I

recall your mentioning that when it is so new that

there may not be even existing viable businesses that

can address these technologies, that maybe some kind


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of an incubator is required for awhile and a utility

umbrella could be that perfect incubator for a certain

period.

MR. QUAIL: Yes.

COMMISSIONER O'HARA: So, number one, is this now the

forum where that can be addressed? And number two, if

we are planning to address that, would BCOAPO, for

instance, then make some submissions or bring forward

evidence regarding that?

MR. QUAIL: Yes. I can't say at this time for sure that

we'll be producing evidence or what its content would

be. We aren't at that stage of things yet. But yes,

that's the kind of question. The question is how to

adapt these structures and tools that really evolved

in an earlier age. I mean, they evolved in the

context of regulated railways as much as anything, and

even before that, and you know, the world is changing

and we say the Commission has the jurisdictional tools

to adapt to the changing environment. And the

incubation of new technologies initiatives, for

example, may well be a critical thing to be addressed

in the public interest. And a mechanism for that to

take place would be the high priority.

But that would include as well the

incubation assumes that ultimately, you know, the egg

hatches and the bird flies away somewhere. So that


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process would be dealt with, and in a way that's fair

to ratepayers where the ratepayers, as I said earlier,

aren't sort of financially backstopping -- their

presence doesn't backstop the development of ventures

on behalf of shareholders where in effect we're sort

of the captive base that makes it possible for

shareholders to venture into other areas and profit

with no corresponding benefit to ratepayers.

I don't want to suggest that our clients

take necessarily a dim view of a lot of these

initiatives. The question is, what's the appropriate

way for it to be regulated? And to what extent --

maybe there are some activities that should not be

regulated, and that Fortis Inc. is perfectly -- we're

perfectly happy with them pursuing other ventures

outside of the format of their regulated subsidiaries.

Much as Terasen has done in the past. I hope that

addresses your question.


COMMISSIONER O'HARA: Yes, it does. Thank you, Mr.

Quail.

THE CHAIRPERSON: I've just got one question, because I'm

not sure what your comments really meant, and that is

with respect to Fortis on the one side and the general

market on the other. Were you implying that you

disagree with Corix to the extent that you would see a


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more generic type of proceeding, with perhaps Corix

itself putting forward evidence on some of the issues

like Mr. Ghikas suggested?

MR. QUAIL: I'd place the issue somewhat differently.

And that is that to determine -- the initial focus may

be on -- I mean, the focus is on Fortis. But to

answer the question of what lines of business belong

within their utility, you have to look at the market

context, and that means looking at what's going on in

that marketplace. You know, what are the dynamics of

it; how is it evolving; how mature is it. Those are

issues that must be looked at, and that cannot be

looked at without -- I'm not suggesting probing into

the entrails of other players, but there must be an

analysis of characteristics of the marketplace and

that implies an examination of who's in there, what

are they up to, you know, how mature is the

competitive situation. It seems to me a necessary

part of answering the question about Fortis.

THE CHAIRPERSON: So to try and get an answer that I

understand from your comments, does that imply that

you anticipate that Corix would want to put forward

evidence as to its view as what is in the marketplace,

and how that marketplace is functioning? I mean, how

does the Commission get evidence that it can rely on

if we don't have that type of participation?


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MR. QUAIL: Well, in my submission, I mean, if Corix or

other players are saying there is a competitive market

here, and that Fortis shouldn't be venturing into it,

they'd better have some evidence of that. I mean, it

seems to me that I would assume that they are self-

interest and seeking to obtain the result they want in

this process that they had better be prepared to

pointing up some evidence about what the

characteristics and dynamics of that marketplace are.

Otherwise, I would anticipate that Fortis walks away

from here with sort of a win by default. The other

team isn't showing up in terms of creating the record

that's necessary to suggest that there is anything

amiss in what they're doing. I mean, aside from

things that we and other players who are positioned

differently, as customers and other players might have

evidence and things to say. But in my submission, it

should be expected that they would be delving into at

least that dimension of things.

I hope that that helps.

THE CHAIRPERSON: Thank you. That's helpful.

MR. MILLER: Mr. Weafer?

SUBMISSIONS BY MR. WEAFER:

MR. WEAFER: Mr. Chairman, Mr. Quail started by saying

that these hearings can create different relationships

that don't always exist in others, and he's in support


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of the Corix position in part. I, on behalf of the

CEC, have to say that we have a high level of empathy

for the positions put forward by Mr. Ghikas on behalf

of Fortis, although not in their entirety. And so I

will give you our high-level position on scope, and

then some context as to how we arrived there.

I think the spectrum the panel has before

it is a fairly broad spectrum of scope, as set out in

the staff's scoping paper, which we acknowledge really

does cover the field in terms of a number of issues

that can arise in this evolving marketplace for

alternative energy services and other alternative

energy initiatives of Fortis, on the broad side of the

spectrum. On the more narrow side, we have Fortis's

position paper, which we say is fairly well thought

out and convincing.

What we would encourage the Commission to

do is sort of lay towards the narrower area of the

issues, but create a flexibility in the process, as we

look at a process that may take a year or so to

evolve, based on the projections and the draft

schedules; ensure that through the process, if issues

do arise, that there is an easy way for the issue to

be put on the table and that we don't see too

restrictive a response to Information Requests.

And I'd encourage that, because in the past


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this Commission has set out issues lists, and they

have not always been that effective. And so you're

getting some differing perspectives on issues. The

CEC would like to see a more narrow focus but an

opportunity for an issue to be put in as this process

evolves over the next year.


In terms of why the CEC supports a more

narrow approach as put forward by Fortis, the CEC has

been around for about eight or nine years now and

we've been an active participant in the Terasen, now

Fortis processes. And in our view, there has been a

fair openness in terms of notification of processes

and issues, and we've participated and we've indeed

raised in some of those processes, where are the

competitors in the process, because we'd like to have

their issues, and we're advised they've been

communicated with and they haven't seen fit to appear.

And so it's difficult for us now, having put in a fair

bit of effort over the last three years in particular,

as alternative energy system issues have been on the

table, to now hear we've got to go back and start

again.

There has, in our view, been a fairly

proactive initiative by Fortis. We've been there,

we've been responsible with what has been in the room


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in terms of the issues that have to be dealt with, and

we think good progress has been made. And one of our

concerns in terms of the broader scoping paper is some

of those benefits will be lost, that we will be

starting from scratch. And I do give high credence to

Mr. Ghikas's comments in terms of the principles of

administrative law and fairness. When a decision is

made, they need to be able to act on it. Participants

who may be investing, based on the decisions of this

Commission, need that certainty that their investments

are going to be valid and they're going to get a

recovery on those investments.

This process in and of itself is going to

create some uncertainty around those types of

initiatives, which we're in the middle of seeing the

province say -- urging Fortis to go forward with them.

This process in and of itself was going to cause

delay.

So in terms of narrowing, we think there

has been a fair bit of thought and discussions on the

issues. That said, the Commission needs to be

comfortable, and the issues you think need to be

considered, we're happy to participate in the scoping,

in the issues that you see as relevant to you having a

comfort level as to what Fortis is doing in the

market.


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Obviously the other reason to narrow the

scope is we've got an invitation for a broad hearing

here, and there's a cost to that. And CEC will be

there and will participate. We participate on a

fairly limited basis, but the broader the scope the

more resources for everybody including, at the end of

the day, the ratepayers have to pay for it all in

effected rate. So we're mindful of Mr. Ghikas's

comments on how this inquiry should be paid for,

because ultimately it'll fall on ratepayers. And so a

narrower scope, we think, is important.

The other reason in support of narrowing

the scope is there are ongoing processes, there are

other opportunities to have input on the issues, and

indeed there will probably be other innovative

initiatives over the next year or two that may invite

applications to the Commission by Fortis, or others,

and people will be able to participate in those

processes and have input on the issues that impact

their interests. So as you look at the scope of --

and I don't intend to go through the scoping document

on an item by item basis. As you consider the lists

of issues that have been put forward by the staff and

as modified by Fortis, our general submission is that

the narrowing is the better approach.

In terms of an issue to add to the list,


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and Fortis added this in their submissions, the staff

document – in fairness, a response to the complaint –

did not really highlight the ratepayer benefit that

may arise from forces being involved in alternative

energy systems. And I don't want to move into

argument, but we certainly have heard convincing

positions put forward by Fortis in our dealings with

them around the risk of the utility as a pure gas

utility in carbon tax environment, and the risk to the

utility which ultimately flows to the ratepayers in

terms of any risk premium to Fortis. They've been

convincing to us in terms of their position. They

need to diversify for the strength of the gas utility.

That's for argument. We'll deal with that in the

process. But that's been the factor we've heard.

And the other factor which doesn't seem to

get a lot of weight, and we think is something that

the Commission does need to take a good look at, is

ensuring that where Fortis is investigating

alternative energy systems, that there is a carryover

to the ratepayers in terms of overhead contribution.

And that's a path we've been on in negotiated

settlements, that the Commission has approved. We

think it's a very important issue for this policy

review to see. If Fortis is in the business, there's

got to be a benefit to the ratepayer, and that issue


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is not as live in the staff's position paper. In fact

Fortis highlighted it at page 31 of their submissions.

In terms of a couple of specific questions that have come

up on the issues list that my friends have dealt with

to make sure you have the CEC's position:


Firstly, on whether this should be a Fortis

proceeding or a generic proceeding. We believe it

should be, as Mr. Quail has indicated, a more generic

proceeding. Very difficult for the Commission to

assess the position of Fortis as against another

utility operator, Corix, or indeed the ESAC

representatives who have indicated to you that they

compete in every market with Fortis, but for NGV. So

we would expect that they would be leading evidence

and they would be an active participant, allowing all

parties to understand the market better, most

particularly the Commission, to make a good policy

decision at the end of the proceeding. So, we would

support while narrowing in scope, generic in

involvement.

With respect to whether AES or all other

initiatives of Fortis, biogas and NGV should be on the

table, we believe it should be focused on the AES

issue. That is the most complicated issue and the one

that deserves the most attention. The others have had


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individual proceedings and more specific review.

And lastly on RMDUM, there has been

discussion around the RMDUM guidelines. And the RMDUM

guidelines were designed for downstream of the meter

issues. And that is not what we see this primary

focus to be on. We see this focus to be on utility

versus utility competition, or utility versus

competitor competition in the utility sphere, in the

regulated sphere. So, we don't think this is a review

of RMDUM guidelines. This is a review of the evolving

utility on utility competition that we're seeing. And

so, adding the RMDUM guidelines into this -- that was

a proceeding into and of itself. To layer that into

this proceeding we think may be biting off more than

we should be given the broad concerns already in play

in terms of the AES issues.

The other point I would comment on, and I

think it came up from Mr. Gustafson, and it's the

availability of EEC funds. And we have a couple of

concerns, just to highlight that it's an issue for

consideration.

One is a seeming desire to have an

independent administration of those funds and the

concern being that the costs of administering those

funds may be more than some of the projects that

they're involved in. So, just highlighting a concern


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in terms of more administration in relation to that

issue.

And lastly, and more to Mr. Gustafson's

comment, is access -- and maybe Mr. Wallace as well --

access to EEC funds. Certainly from a ratepayer's

perspective, EEC funds are funds that the ratepayers

have -- are putting up, so to speak, and back to my

earlier comment, if we're putting those funds up, the

utilization should be by somebody who's ensuring that

those ratepayers get a benefit through contribution to

overhead or otherwise. So it's an issue that we'll be

focused on in terms of the ratepayer benefit.

In terms of evidence, the CEC does not

anticipate filing evidence in the proceeding, and

participating more in cross-examination and the filing

of arguments and submissions, but not filing evidence.

And those are my comments.

THE CHAIRPERSON: I have no questions. Thank you.

MR. WEAFER: Thank you.

MR. MILLER: Mr. Andrews?

SUBMISSIONS BY MR. ANDREWS:

MR. ANDREWS: The B.C. Sustainable Energy Association and

the Sierra Club of B.C. are generally supportive of

alternative energy projects and initiatives, at least

when they're defined as ones that either meet or avoid

energy needs in a way that reduces greenhouse gas


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emissions, reduces the use of energy, and that are

otherwise cost-effective, and socially beneficial.

So from BCSEA/SCBC's perspective, the

notion of what's been described as a traditional gas

utility moving in the direction of alternative energy

services is, at a generic level, a desirable

direction. And so they would ask: What about all the

other traditional public utilities, why aren't they

moving in the same direction? And maybe some of them

are. And that's considered desirable.


In my intervention letter on behalf of my

clients, I made two comments on the scope that I want

to emphasize here. Although I said them quite

briefly, I really think that they're at the heart of

this. One is that the staff scoping document is too

broad. It's way, way too broad. And secondly, that

there is a need for evidence on which to base any kind

of decision or outcome, and that in particular, ESAC

and Corix have made allegations and comments about,

for example, the competition between themselves, or

their members, and Fortis. But we have no evidence of

that at all and in my submission, that is a

foundational element to the Commission grappling with

the problem.

I'll address -- one of the first, I guess,


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points in Fortis's submission addresses the

relationship between this proceeding and other

proceedings of the Commission both past and current.

I support Fortis's position, first of all, regarding

past proceedings, which is to say that for a variety

of legal and practical reasons, past proceedings that

have resulted in decisions should not be overturned or

put in question except through the existing procedures

under the Utilities Commission Act for reconsideration

or whatever is appropriate. And I don't hesitate to

say that if there is something arising from this

inquiry that causes the Commission to question

something that happened in a previous proceeding, then

it's fully open for the Commission to deal with that

on a go-forward basis. But the assumption would not

be that the Commission at that point would undo a

previous decision unless it follows the appropriate

steps.

And BCSEA has been involved, and SCBC, in a

number of these alternative energy and NGV biomethane

proceedings. And as Mr. Weafer said, we put a lot of

work and energy and commitment into those proceedings,

and the results of them didn't always meet our

submissions. But there is a need for closure,

recognizing that new issues arise going forward.

In terms of current proceedings, again I


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would support what I take to be the Fortis position,

that this proceeding should not tread on the ground

that is already set out in existing current

proceedings. So for example, issues to do with -- and

I think Mr. Wallace uses the example of whether money

spent by the utility is properly within the revenue

requirement. To the extent that that question arises

regarding a test period, and there is an application

before the Commission, which there is in the case of

Fortis in the 2012-13-14 revenue requirement

application, in my submission that is the place for

that issue to be dealt with. And if his clients have

submissions about whether certain expenditures are

appropriately included in the revenue requirement, a

revenue requirement application is ideally suited to

raise and resolve those issues. And in my submission,

the Commission here in deciding the scope of this

proceeding should ask itself: Is any particular issue

one that is already on the table in some other

proceeding? And if so, then in my submission it

should leave it there and not put it in this

proceeding unless there's a very important reason to

do otherwise.


One of the comments that Mr. Ghikas made in

the Fortis written submission that I think caught my


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attention, and I think is really quite important, is

the difference between activities and companies. That

is, it's easy to think in terms of a regulated utility

as a regulated company, and we're now in a world where

it's, I think, really especially important to be

distinguishing that what we're talking about is

activities of companies. So it may be one company

with some activities that are regulated and some

activities that are not regulated, or it may be a

bunch of companies that are either totally regulated

or not.

And in that respect, I thought that B.C.

Hydro's written submissions were quite helpful in

setting out three categories of Fortis activities that

are relevant and that are sort of being discussed.

The one being purely regulated activities by Fortis --

the provision of natural gas delivery service to its

customers. The second category being activities that

relate to load and supply. So, EEC and biomethane,

NGV, those kinds of activities that are in a different

respect regulated by the Utilities Commission.

And then the third category of activities

being activities that are not regulated. And that, I

think, is an important distinction because, of course,

the jurisdiction of the Commission ends where the

activities that are not regulated begins. And so, for


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example, to the extent that complaints are made about

activities of Fortis that are not regulated, the

Commission will have to be very alive to whether it

has jurisdiction to go there.

One of the issues I think that's

particularly important here in terms of the scope of

this proceeding is whether this should be a complaint-

oriented process or a policy creation oriented

process. And my submission, and I may go farther than

Fortis or CEC may go on this, is that it should be a

policy creation focus and not a complaint focus. And

since Mr. Quail has introduced the use of odd

metaphors, I will add one of my own. He referred to

the complaint as being the springboard for this

process. And I would use the example of the

gymnastics competitions in which performers on the

high bar use a springboard to get up there, but once

they're up there the springboard is taken away. It's

no longer of any role in the events that proceed. So,

we had complaints or a complaint that got us here

today. But in my submission, the Commission should

seriously consider dealing with that complaint in a

separate manner than following through with this

proceeding.

There are all sorts of policy-type issues

that have been raised, but in my submission the


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Commission gets off on a fundamentally wrong foot if

it deals -- if it starts from the investigation of a

complaint as a method of dealing with issues that are

multi-faceted, where there are often no rights and

wrongs, and my fear would be that the policy would not

be -- the policy that came out of that process would

suffer if Fortis had to be constantly defending itself

against one or more specific complaints, rather than

participating openly in the development of appropriate

policy. And I don't mean to say that there is no

merit in the complaints. But for example, at least

some of them, to my mind, are extremely questionable.

The one example that's questionable is the allegation

that Fortis deliberately failed to inform ESAC and its

members about B.C. Utilities Commission proceedings

causing them not to participate and incur harm. Maybe

I'm not characterizing that correctly because even as

I state it, to me that doesn't add up to a valid

complaint. But if it is, it's something I submit the

Commission should deal with separately from any other

important issue here.


It's really hard to believe that a company

like Corix or these major companies that are members

of ESAC can say on the one hand that they are

competing with FortisBC, and that they didn't know


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that FortisBC filed a long-term resource plan with the

B.C. Utilities Commission that says, right from the

cover page forward, that they're planning to expand

their activities in alternative energy services. It

certainly -- that to my mind is something that we

don't -- in this policy creation type approach that I

see, I don't think we need to grapple with.

I will just briefly -- specifically in

terms of the topics EEC or DSM, AES, alternative

energy services, biomethane – we won't go with the

acronym for that – NGV, in my submission the core

focus ought to be on alternative energy services. And

to come back to the problem with a complaint-driven

process, ESAC is asking that there be an investigation

that addresses NGV, and yet it says that its members

don't compete with Fortis regarding NGV. So in my

submission that's simply a good reason to keep NGV off

the table, and it's also a good reason to make the

complaint aspect of this separate, and so that the

specific details of the complaints can be fleshed out,

because right now there's very little or no evidence

to support them, and dealt with separately.

The issue has been spoken to about what I

would call the integrity of the negotiated settlement

process. And there's a question from the Panel about

that. And from my perspective, there is a concern


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that if the Commissions puts a decision that arose by

way of Commission approval of a negotiated settlement

agreement in a different category from a Commission

decision that resulted from a written hearing or an

oral hearing, there's a concern that that would

undermine the legitimacy of the negotiated settlement

process. Why would any party want to do an NSP if the

outcome was a decision that had less long-term weight

than a decision that came out of a written or oral

hearing? My clients often support having NSPs – not

always, but – so we would not want to see the NSP

process undermined by officially going back and

differentiating a Commission decision based on the

manner by which it was achieved.

Lastly regarding hearing costs, my clients

will apply for a participant assistant cost award,

guidelines, PACA guidelines, so I would simply ask

that the timetable include a deadline for a submission

of a budget estimate under those guidelines.

And I think, subject to any questions,

those are my submissions.

COMMISSIONER COTE: Mr. Andrews, various proceedings have

been alluded to in some of the submissions and they

have addressed the need for those various proceedings.

I'm talking the long-term resource plan, biomethane, I

think alluded to it in the whole area about broad-


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range inquiries, the need for a broad-range inquiry to

address the broader questions related to the new

initiatives that FEI is undertaking. I'm a little

unclear from your comments where you stand on that.

Is there a need for that, in your mind?

MR. ANDREWS: Well, I'd say first of all the Commission

has said that there is a need, and it's not my role to

question that. The Commission has also approved

particular decisions regarding biomethane and an

interim decision on natural gas vehicles and so on,

and my submission is that those things should not be

undone by going forward.

My clients welcome the opportunity for the

Commission to review how alternative energy services

are regulated.


MR. ANDREWS: And I guess one of the things that I was

trying to get at, in terms of the distinction between

a complaint-driven process and a policy creation

process, is that I don't think it's desirable to

approach the regulatory issues from a standpoint that

begins with the assumption that Fortis is being

accused of wrongdoing. That, to me, just gets things

off on the wrong foot, and so if there are complaints

I suggest that they be dealt with separately, and that

we enthusiastically do the policy development with the


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narrow focus that Mr. Weafer also referred to.

COMMISSIONER COTE: Okay. A further question. When you

talk about decisions being undone, you're not

objecting to some of the information related to those

various hearings coming into play, as long as it

doesn't involve a decision changing as a result of

that.

MR. ANDREWS: That's correct. And just to be complete, I

would have to say that if there is some reason that

someone can fit within the rules, why a particular

decision should be undone, there is a process for

doing that. And all I'm saying is, this proceeding

should probably not be the place for that to happen.

COMMISSIONER COTE: Thank you.

THE CHAIRPERSON: Just one question. You talked about

the B.C. Hydro submission and the characterization

they had of the three sort of aspects to Fortis's or

other utilities' activities. Would I be correct in

surmising from what I have seen in evidence by a

number of parties that in part what we would be

looking at is where the boundaries lie between these

three different aspects? I mean, one party's got us

being zookeepers and the other one's got us on a high

wire now, but is not part of our function here to try

and -- isn't part of the question that I see is that

some parties, anyway, are not sure where the boundary,


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say, between a non-regulated business and the

regulated business is or should be?

MR. ANDREWS: I think there are two aspects to that.

Some parties are unsure. That, I think, is a fact.

The resolution of that issue traditionally happens as

a result of specific applications and decisions by the

Commission on evidence- and fact-specific situations.

At this point in the proceeding, we don't

-- I'm not clear whether Corix or the ESAC complaint

supported by Corix is that Fortis's competition that

it says is unfair is competition occurring in the

unregulated sphere, or it's Fortis's activities that

are in the regulated sphere. And that involves, of

course, being able to differentiate the two, but since

the activities that the actual complaint to the

Commission is about are by definition regulated

activities, I'm not sure that you can characterize it

as a matter of defining the boundaries between

regulated and unregulated.

THE CHAIRPERSON: Perhaps a better way of stating it

would be to -- would we be looking to come up with

perhaps general principles or guidelines that

utilities such as Fortis could use when they are

contemplating whether an activity should be put into

the utility framework or the non-utility framework.

I recognize where you're coming from on specific


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issues that might be dealt with in a different forum.

MR. ANDREWS: I think my answer to your question is yes.

And also I would say that applies to these companies

that are or would be competitors to Fortis in the same

areas. Because one of the sort of questions begged by

the complaint is whether there are activities going on

in competition with a regulated activity, where the

activity in the first place ought to be regulated but

isn't.

So I mean, I think -- and that's again the

focus on activities rather than companies, that if

we're talking about an activity being of a type that

is regulated in a certain way, then that would apply

to Fortis as well as to same activity by other

companies, competing companies.

THE CHAIRPERSON: That's helpful, thank you.

MR. ANDREWS: Thank you.


MR. MILLER: Mr. Wieringa?

SUBMISSIONS BY MR. WIERINGA:

I'll try to be relatively short since we're

probably heading closer to lunch.

Our letter stated some of our preliminary

views that we had written out for you, and that we are

coming here to have a better understanding of some of

the views of other parties here. It strikes me, and I


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think that you mentioned something about the Clean

Energy Act and the energy objectives in there. There

are some 16 of those objectives, and three I think

that are of particular interest to us. One is around

increased conservation. A second one was around

meeting greenhouse gas reduction targets, and those

are set in legislation here in B.C. And concurrent

with that is switching to lower emission energy

sources. And we certainly saw that Fortis's attempts

in a sector was certainly living up to some of those

objectives in the Clean Energy Act.

I think there have been a couple of

questions around the scope. You'll see in our letter

we are suggesting that the scope should be fairly

narrow. I think most of the people that I've heard

here as well have suggested that biomethane and NGV

for vehicles not be part of this inquiry. We would

concur with that as well.

We've also heard that you've got a

complaint in front of you by ESAC and Corix, and that

you should probably deal with that complaint. As we

point out in our letter, if you find out that there is

something as a result of that that would lead you to

establishing some new guidelines that may be following

after that. We would suggest however that when you do

establish some new guidelines, those guidelines would


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be consistent with the Clean Energy Act objectives,

and that those would also be fairly flexible in

dealing with changes in the marketplace.

We are not quite convinced that you should

be going to a review of the RMDM, or RMDUM as they

have been nicely termed here. I think most of the

thoughts that you're seeing in front of you deal with

a competition between utilities.

Then I think you've heard something about

whether or not you should be creating a policy

creative process. I'm not quite sure exactly what

that entails. It strikes me that if you're dealing

with a complaint, you might be moving towards looking

at evidence that would be brought before you. That

may persuade you to do something else. But we haven't

got that evidence in front of us so it's hard to

comment on that.

And I'll leave it at that, if that's okay

with you.

THE CHAIRPERSON: That's fine, thank you.

MR. MILLER: Mr. Christian.

SUBMISSIONS BY MR. CHRISTIAN:

So you have ten minutes before I think

people are going to get a little restless for a lunch

break.

B.C. Hydro filed submissions on June 9th in


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this matter. That's Exhibit C7-2. I'm going to just

summarize briefly what Hydro said there and elaborate

on a few points.

In the June 9th submission, B.C. Hydro

submitted that the focus of this inquiry should be on

the activities of FortisBC that are the alternative

energy service activities, and that the focus should

not be on the activities of other parties, necessarily

at least, and that the focus of this inquiry should

not be on Fortis activities that have already been

subject to regulatory review, natural gas vehicles and

biomethane being two examples that have been discussed

this morning.

I offer two caveats to that observation.

First is that if the review of Fortis's alternative

energy services suggests that the regulatory response

to Fortis initiatives already underway and already

subject to Commission review has been inadequate in

some way, then of course BCUC could revisit it. And

in this regard I would echo Mr. Andrews' comments that

any such revisiting of previous decisions of the

Commission would be in accordance with the normal

Commission procedures regarding the consideration.

The other caveat I would offer is that the

complainants and other would-be competitors of Fortis

with respect to alternative energy services ought to


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at least have an opportunity made for them to provide

evidence with respect to what services they provide in

the marketplace and what regulatory regime they thing

should be, or is applicable to the provision of those

services.


In other words, while the scope of this

proceeding shouldn't necessarily include the

activities of competitors of Fortis, the Commission, I

think, in setting up its process order should make

allowance for and perhaps even invite the competitors

of Fortis to put forward their evidence with respect

to their activities and how it should be regulated.

In the June 9th submission of B.C. Hydro,

B.C. Hydro offered a lens through which the Commission

can view the Fortis AES activities. In essence, B.C.

Hydro suggested that each of the activities -- or,

sorry, each of the AES services that Fortis would

provide should be considered as one of three different

things: Either a regulated service subject to the

determination by the Commission of rates, including

non-rate terms and conditions; that the AES service

could be an activity in the nature of maintaining

Fortis's load resource balance, and in the context of

this hearing, of course, that's primarily demand-side

management; and the third bucket B.C. Hydro offered,


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that the Commission could consider an AES service as

being is an unregulated service or revenue-generating

services, generally beyond the scope of the

Commission's jurisdiction, primarily revenue-related,

or revenue-earning activity.

In B.C. Hydro's submission, the Commission

is going to have to grapple with those questions in

any event, because there is one fundamental question

really that's on the table in this inquiry, and that

is: What is the correct regulatory response to the

AES services that Fortis and others would be offering?

And in B.C. Hydro's submission, it's going to be

challenging, if not impossible, for the Commission to

answer that question, that essential question, what is

the correct regulatory response, without understanding

the essential nature of the activity that's in

question.

So in B.C. Hydro's view, one window the

Commission is going to get to, having to consider

whether the individual AES projects are regulated

services, competitive services or more in the nature

of demand-side management, before it's going to be

able to come up with the correct review on what the

regulatory response should be.

B.C. Hydro also submits that viewing the

Fortis AES services through this paradigm, this three-


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fold paradigm, will minimize the likelihood of

unnecessarily and inefficiently reviewing some of the

Commission determinations with respect to individual

cases that have been before the Commission, and the

guidelines and other documents of Commission decisions

in the past, such as RMDUM guidelines.

And finally an issue near and dear to B.C.

Hydro's heart, minimize the likelihood that the

Commission will start looking generically at the

regulation of demand-side management issues, which of

course is the particular concern that Hydro has here,

given the broad scope of the Commission staff paper.

Now, I was going to say that I think, based

on the written submissions, that all the interveners,

I think, don't disagree with Hydro's views, at least

on the scope that should be focused on. AES -- I'm

not sure that I can still say that, having heard some

of the submissions today, but at least on paper, at

least, I don't think anybody is taking a contrary view

to B.C. Hydro with respect to the focus on AES on a

go-forward basis.

The only other submission I'd like to make

at this time arises from an exchange with Mr. Ghikas

and the panel. I think it was a question that came

from Commissioner Rhodes, and you were asking whether

Fortis's views on the hearings -- whether it should be


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generic here or not. And as I understood Mr. Ghikas's

answer, it was that it could be a generic hearing,

insofar as the scope was limited to the AES activities

of either Fortis, or Fortis and the would-be

competitors of Fortis. And B.C. Hydro agrees with

that. That is, to the extent that the scope is narrow

and focused on AES, then it can be generic. And focus

on not just the AES and Fortis, but the AES of other

competitors.

To the extent that the scope is broad, and

in particular to the extent the scope is as broad as

proposed in the staff Commission paper, including a

review of regulation of demand-side management

activities, B.C. Hydro would strongly object to this

proceeding being generic in that sense.

And, subject to any questions, those are my

submissions.

THE CHAIRPERSON: Thank you very much.

MR. MILLER: Mr. Chair, I believe it would be appropriate

to provide Mr. Ghikas with an opportunity of reply.

He's advised me that he does not intend to be very

long.

THE CHAIRPERSON: Mr. Ghikas.

REPLY BY MR. GHIKAS:

MR. GHIKAS: Thank you, Mr. Chairman.

Just picking up on a few of the points made


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by my friends, the first one -- I'll deal with these

more by topic than by particular speaker, but it deals

with generic versus the specific. And I believe Mr.

Christian's characterization was correct about

Fortis's position, in that the scope is narrow but

generic. I think that's a fair characterization.


My friend Mr. Gustafson's submission on why

ESAC believes that it should be a more specific

proceeding relating to Fortis, he termed -- he stepped

back and said let's look at the elephant in the room.

And I think it's worthy underscoring that that

involves an assumption of a level of paternalism in

favour of his clients that isn't particularly

warranted, given the list of his clients. I mean,

these are the Honeywells of the world, the Tranes of

the world. These are multinational corporations. And

to try to restrict the scope to Fortis because they

are further ahead in this market, or a large energy

provider in this market, I think does a disservice to

the fact that my friend's clients are significant

entities. They're a herd of elephants in the room, if

I can put if that way, sticking with the zoo metaphors

that we're working with her.

In combination with that submission, my

friend did concede that his clients compete in every


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space except with regard to NGV. And to the extent I

would echo my friend Mr. Quail – and this may be the

only time we ever hear this, so we can all savour it –

to the extent that the market development is a

relevant point in this inquiry, it's difficult to see

how an inquiry can proceed without looking at who the

market players are. And in this case, this inquiry

has been triggered by two market players in this -- or

intended market players in this environment, and it's

difficult for Fortis to accept that those market

players would be able to stand on the outside, launch

bombs in from the outside, and then try to stay on the

periphery and have the inquiry focused on Fortis

rather than being subjected to similar inquiries with

respect to how they operate their business and the

nature of their -- the nature of how they intend to

undertake business and develop in this market.

On a similar point, I heard my friend Mr.

Gustafson go through further points with respect to,

in effect, the -- as I believe ESAC perceives it, the

intentional exclusion of them from past processes by

Fortis. And as I sit through that, I would be remiss

if I didn't say that the Fortis utilities do not

accept what they are saying, factually or the

implications of it.

And I understand why my friend is making


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that point, and it goes to the fact that, as a number

of people have stood up today and said, that there has

to be some finality to decisions that are made. And

in my submission, ESAC recognizes that, and this is

their basis for attacking decisions that have been

made in the past. And if they are going to be

advancing that as the basis of their complaint and as

the basis for the Commission reviewing past decisions,

they, in my respectful submission, have to stand up on

the stand and answer for it. They have to answer

questions, and I'll just list a couple here that I

think should be issues on this point, about where they

were when the public processes were unfolding dating

back to 2008, and whether it's correct that the

organization with whom they say that Fortis failed to

consult was, as their media releases say, formed in

December of 2010; why ESAC failed to mention that one

of its members is in fact participating in stakeholder

sessions; why it has failed to mention that ESAC

members who were invited in writing by Fortis to

participate in stakeholder processes decided not to

attend; why ESAC failed to mention that still other

members of ESAC who had attended the stakeholder

sessions while employees of B.C. Hydro, and why ESAC

has failed to mention the fact that some of its

members have been partnering with the Fortis utilities


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on alternative energy projects.

Now, in my submission, this whole issue is

a side issue because it doesn't take them anywhere.

But if they're going to make those allegations they

have to answer for them. In my respectful submission,

those issues should be on the table, and they should

have to put forward a panel to speak to them.

Proceeding Time 12:04 p.m. T35

Now, with respect to the Corix submissions,

my friend Mr. Wallace, on his written hand-out he has

also spoken to the issue of being limited to FortisBC.

And he says the principles established for Fortis can

be applied to others as appropriate.

Well, while it is true that those may be

applied to others as appropriate, the fact of the

matter is, Corix is a complainant, and they have been

very careful to position themselves, and they don't

mention the word "complaint" in their letter, but the

fact of the matter is, they are raising issues and

they are referencing the possibility of the Commission

granting interim relief. And in such cases, they're a

complainant. And in my submission, it's entirely

appropriate for the complainant in this circumstance,

like Corix, to have to put forward evidence of its own

business model, and its approach to allocating costs,

for example, and its approach of putting different


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types of services, both regulated and non-regulated,

within the same company and corporate structure.

My friend Mr. Andrews spoke to the concern

that he had over a policy-driven process versus a

complaint-driven process. And I have to say the

Fortis utilities do share that fundamental concern

that in a sense this process, and a considered -- the

consideration of some of these issues has been pushed

forward in a sense, and pre-empted, by these

complaints. And we welcome the opportunity to deal

with the issues that we have described, the AES issues

in particular and to deal with them in this process,

and to deal with the complaints, which deal with the

same issues, in this process. I don't think we need

more than one process to deal with the complaints as a

separate issue. Fortis is content to have the

complaints dealt with in this process.

The key, in my submission, for dealing with

the issue that my friend Mr. Andrews has raised, and

legitimately so, is that the process has to be

structured in a way that does not put forward the

complaints as a means of railroading through a process

that's going to have longer-term implications for

everyone in the room. And I can speak further to that

in the context of the process, but I think the

solution to the simple point is that it's how the


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process is crafted, the timelines that are provided,

and the participation of various parties in the

process, that those are the mechanisms by which the

Commission deals with that concern, and it is a

legitimate concern.

Finally, the point about regulated versus

non-regulated. And this came up in a variety of

contexts. My friend Mr. Gustafson, for example, he

was careful to put his comments in terms of the

involvement of Fortis, and I have as a quote "in the

unregulated space". My friend Mr. Wallace talked

about, in his handout, the non-gas non-regulated

sphere. And there was further discussion about RMDUM.

And my friend Mr. Quail said that some of these

activities may not be regulated. And finally, my

friend Mr. Chairman raised the question of what about

guidelines in the area of public utility regulation.

And all of these points, in my submission, come back

to the fundamental point that the regulated nature of

these services is defined by the Act. It always has

been, it always will. And the Act has remained the

same over time.

These services, while Fortis's involvement

is new, these services of the exact same character

have been offered over time and are regulated

services. And so while my friend Mr. Gustafson's


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clients may have some conception that services of this

nature wouldn't be regulated, the fact of the matter

is, it's dictated by the Act as to whether it's

regulated. And to specifically answer the question

that Mr. Chairman posed to my friend Mr. Andrews is,

in my submission, the Commission doesn't need to

prescribe guidelines as to what is regulated and what

is not. The guidelines are the Act. And they're

there, and they're clear, with respect to the

provision of thermal energy. And so regardless of the

submissions that are coming from the various parties

about the potential for regulating these, and possibly

not regulating them, the fact of the matter is,

they're regulated. And in my submission, I have this

fear that we're going to spend an inordinate amount of

time in this process dealing with issues on the false

premise that services of this nature can be non-

regulated when in fact they are. And so I'm -- I just

-- I'm cognizant of the issue. It may be that we have

to address it at the end. But in my submission, the

efficiency of the process could benefit from an early

determination in that regard.

Those are my reply comments, subject to any

questions.


THE CHAIRPERSON: I'm glad to hear that the Utilities


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Commission Act is so clear in all aspects. Thank you.

MR. MILLER: Mr. Chair, Staff is prepared to make its

submissions on process. I note the time. My

suggestion is I believe that process issues should go

fairly quickly, so I would suggest we go through to

12:30 and see where we are.

THE CHAIRPERSON: That would be satisfactory. Hopefully

hunger pangs will speed things up.

MR. MILLER: Yes.

SUBMISSIONS BY MR. MILLER:

So Staff's position on process is they

strongly encourage the Panel members to order an oral

hearing. Often if the Panel decides to look at

broader policy issues, often IRs aren't satisfactory

from Staff's perspective. And this isn't directed

just to utilities but also to others who have filed

evidence. You ask written questions and you don't get

back answers, and then the staff hasn't been able to

fully explore the issues in front of the Panel so that

the Panel has a full understanding of what's going on.

So we strongly recommend an oral hearing.

Having said that, we understand that

Staff's desire for scoping issues is much broader than

some of the other parties'. So we would suggest that

if you are inclined to go along with Staff's

suggestions, that the hearing could be held in phases,


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the oral part of the hearing could be held in phases

where only those parties that are interested in a

particular issue would attend that part of the oral

hearing.

With respect to timelines, we believe that

the first item should be evidence from Fortis, and

then around the first round of IRs from Fortis and all

the interested parties and the Commission Staff.

Then we would suggest having evidence from

both ESAC and Corix filed, followed by IRs from all

the parties on those issues. The next step would be

evidence from interveners, if any, and then IRs on the

intervener evidence.

And then finally a second procedural

conference to address any outstanding issues that

arise from the evidence being filed in the IRs, if

necessary. And then a second round of IRs on both

Fortis and, if I can call them the complainants, ESAC

and Corix's evidence. And then a final round of IRs

on intervener evidence.

Now, with respect to the timelines between

those steps, particularly the evidence being filed in

the IRs, often Commission Staff shoulders a lot of the

workload for the other parties in the hearing. So

Staff would suggest that there be at least a three to

four week period between filing of evidence and the


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Staff's obligation to produce the first round of IRs.

And those are our submissions.

And just one final comment. We agree with

some of the parties and Mr. Ghikas's last comment that

to a large extent we think we need evidence from Corix

and ESAC to properly understand the scope of the

issues, especially if we're going to be developing --

well, both on developing policy issues so we

understand what the marketplace is, and also

particularly with respect to the complainants, they

should be required to file evidence.

THE CHAIRPERSON: Thank you, Mr. Miller.

MR. MILLER: Mr. Ghikas, I believe, would be next.

SUBMISSIONS BY MR. GHIKAS:

Very briefly, the submissions are laid out

in the written. I'm not going to repeat them, but to

highlight. The general framework that we've put

forward tries to deal with groups of issues in the

sense of are they procedural, are they substantive,

are they fundamentally legal issues? And just to stay

with that framework, I do want to reiterate the belief

of the Fortis utilities that legal issues should be

addressed through legal submissions and not piecemeal

through IRs. And the most efficient means of dealing

with those issues is to have an issues list that comes

from the Panel, or in conjunction with Staff, but to


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put those issues forward in advance so that the

parties know what they're answering in terms of legal

submissions but not to be forced to compartmentalize

legal issues. And any time -- and this isn't a

criticism for people asking IRs, but any time you get

issues asked through IRs, you end up with little

snippets of what amount to legal argument in various

contexts, and there's overlap. And I think in this

context there are so clearly a significant number of

legal issues that will have to be addressed that

certainly the scoping document will make a lot of

those issues clear and unnecessary to ask those issues

again through IR process. But to the extent that they

aren't clear, then a subsequent document that is

released by the Commission requesting specific

information on issues, legal submissions, would be the

most effective way to deal with it, in my submission.


Dealing with the -- there are some

procedural issues. We've grouped them. They are

largely related to what is addressed in what context,

and in my submission that type of issue isn't

necessarily dealt with in an oral proceeding, and

could be dealt with quite effectively through writing

if there is a convenient way to hive it off. And it

may be that that determination can't be made until


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farther down the road. But to the extent that those

issues can be dealt with in the most efficient way, to

keep the scope of an oral hearing down, that would be

preferable.

And as we set out in our written

submissions, we do favour an oral proceeding in this,

and I think part of that is in recognition of the

Commission's obvious interest in the issue and the

desire of people within the company to want to come

forward and give oral testimony on issues that are of

obvious policy interest to the Commission, and then

they want to make themselves available for that. The

other aspect of things, of course, is that this is

driven by a complaints process, and I've made my

submissions on that point.

But I do believe that the nature of the

dynamic here with respect to the complaints does

require, certainly, that Fortis be able to cross-

examine the panels put forward by the two

complainants.

We have set out in the written proceeding

-- or, sorry, the written submissions, an outline of

the inquiry timing and process. The timing is

obviously going to be changing based on where the

scope of the proceeding is. It obviously depends to

some degree on that. But I think in terms of the


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relative spacing of each step between one another, my

friend Mr. Miller referred to the need for extra time

for Commission staff, and I would echo his comments in

the sense that in a proceeding of this magnitude,

there should be a lot of space in between the

procedural steps, particularly -- and speaking from

the perspective of the utility, there are other

proceedings ongoing. And obviously a lot of the

people in this room are participating in everything,

so to the extent that the process can accommodate

reasonable timelines for people to respond, I think

it's important that we do so.

I was scribbling furiously with respect to

my friend Mr. Miller's procedural outline for process,

and I think I got most of it, and I think the general

thrust of what my friend was getting at was the need

for staged evidence by Fortis and then followed by

IRs, and then the complainants, followed by IRs, and

then interveners followed by IRs. And I think broadly

speaking that parallels what we were putting forward

in the written submission, and I think that makes

sense.

I would also suggest that a need for a

procedural conference somewhere along the line is

probably inevitable, particularly since we'll have a

better idea of what the scope of the proceeding is at


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that time, and perhaps some of these issues will have

to be addressed at that time.

My friend Mr. Miller was discussing about

phasing the proceeding, in a sense where people could

participate in one or the other, and that -- the devil

on those -- on that submission is in the detail. The

difficulty, of course, is that the foundation of the

inquiry is, as we understand it, is that there is a

desire to have sort of a broader look at things. And

that to me what has occurred to date has been

comprehensive applications dealing with each subject

matter.


And as I understand it, there is some

desire to look at things on a broader level, and to

the extent that you're cutting those things up into

smaller pieces in the inquiry, it does beg the

question. But in principle it would make things much

more manageable to deal with things that way, and so

to the extent that those issues, that concern can be

overcome, I think it does make sense to cut things up

into smaller pieces.

Subject to any questions, I think those are

my submissions.

THE CHAIRPERSON: No, that's quite useful. Thank you.

MR. GHIKAS: Thanks.


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MR. MILLER: Mr. Gustafson.

SUBMISSIONS BY MR. GUSTAFSON:

Thank you. First let me reiterate what I

said right at the outset when I stood up this morning.

We come with questions, not with allegations. We did

not file a complaint. We filed an application

inviting an investigation so that we could understand

better the nature of the activities being conducted by

Fortis in the AES space.

In our view, the evidence that is likely to

be required in this hearing should be provided

primarily by Fortis. And then depending on what

evidence it submits, it may make sense for my clients

and for Mr. Wallace's client to submit evidence as

well to better understand the market. We understand

that that is certainly a possibility, but it really

does depend on what Fortis tells us, because I said,

we're trying to understand what they're doing, and

based on a better understanding of those activities,

that will dictate how we respond.

In our submission, the evidence that is to

be introduced is likely not to be all that

contentious. It's going to be "Here's what we're

doing." The debate will really centre around

jurisdictional questions and questions of policy, and

in our submissions those can be adequately dealt with


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in a written process, and that's what we would

advocate that the Commission endorse and put in place

here.

We are concerned that if we are involved in

an oral hearing, the proceeding will be a protracted

one. It will become extremely expensive for our

clients to participate in and will become potentially

prohibitively expensive and unnecessarily time-

consuming. So we propose that this matter be dealt

with as expeditiously as possible, with a narrow

focus.

Mr. Wallace was kind enough to share a

detailed proposal as to the timing of the process, and

we support what he has outlined, with one small change

and that would be in relation to the proposed November

7th deadline for filing of BCUC and interested party

IRs on the reply evidence; that an opportunity also be

provided at that stage to file further IRs in respect

of responses by Fortis to the earlier round of IRs,

because we do agree that in the initial instance not

all responses to IRs properly and fully address the

questions that are underlying that. So it may be

useful to have a second opportunity to ask questions

or questions of clarification in respect of the

responses to the IRs.

We have a fundamental concern that if --


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particularly if this proceeding is a protracted one,

that Fortis, in the meantime, continues to operate in

this space, potentially in a manner that is

prejudicial to the interests of our clients and those

of Corix and others who compete in the AES business.

And we ask that the Commission make an order, and

particularly, as I say, if the proceeding is to be a

protracted one, that the Commission make an order that

will suspend the use and application of the EEC funds

in the AES space.

If the proceeding is as protracted as my

friend would suggest it should be, in our respectful

submission not only will the horse have left the barn

but it will be out of sight and in the next county

never to be seen again, if Fortis has the opportunity

to continue to pick the low hanging fruit in the

marketplace and continue to support and buttress its

position as the dominant player in this marketplace.


And so we would ask that in considering how

the Commission wants to proceed, and the nature of the

process, and how long it will take, that in

conjunction with that, that the Commission also

consider making an order that will safeguard and

protect the interests of the key stakeholders in this

process.


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Those are my submissions, thank you.


MR. MILLER: Mr. Wallace.

SUBMISSIONS BY MR. WALLACE:

MR. WALLACE: Thank you. I did outline our thoughts on

process on the back of the document provided to you

earlier. I won't go through that in full detail, but

I do want to highlight a couple of things.

First, Corix prefers an expedited written

process. Like Mr. Gustafson, I don't expect that in

the end the issues will be as complicated as they

might appear to be from this distance. When we get

into what Corix is doing, and why it thinks it's

right, and why other people think it's wrong, or there

should be a change, I think the positions will become

fairly clear.

It's very clear to us that uncertainty

caused by delay is not helpful to us, and we expect to

others. Recognize, Mr. Ghikas has mentioned it, that

it causes uncertainty for Fortis and, as Mr. Gustafson

mentioned, there is a danger that if it's spun out too

long, Fortis will carry on in what his client and ours

believe is inappropriate behaviour. Accordingly, it's

in the interests of everybody to get these issues

resolved as soon as we can, and we believe that a

written process is the best way to do it.


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Clearly, there needs to be an opportunity

for FortisBC and interested parties to file evidence.

And we support that. We believe it's important that

Fortis make it clear what it is doing, and why it

thinks it is right. And that interested parties,

including Corix, be given an opportunity to file

evidence to indicate why they think it is wrong.

A final decision has not been made by Corix

as to filing evidence. We haven't seen Fortis's

evidence. But we have heard the concerns of staff,

we've heard the concerns of Fortis, and obviously

those are going to be taken into consideration.

With respect to the number of rounds of

Information Requests, it would be our submission that

one round of Information Requests directed to all

parties that file evidence, and one round on FortisBC

reply evidence, should be sufficient. Again, we think

that the facts will become clear fairly quickly.

We feel particularly strongly that if there

is going to be an oral proceeding, the delay be caused

by a second round of Information Requests is not

necessary. Issues that fall into that category can

either be brought back to the Commission with requests

for leave to put a second round, where there is a

particularly egregious problem, or they can be

answered orally during the course of the oral


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proceeding. And second round of IRs in Fortis's

evidence, interested party evidence and reply evidence

simply extends the proceeding too long, as is

evidenced, I think, by Fortis's proposed schedule for

these proceedings.

With respect to the possibility for a

procedural conference, in our submission that could be

considered after the Fortis responses to information

requests, or after the filing of evidence by

interested parties. The advantage of doing it after

the filing of evidence by Fortis would be an

opportunity for the Commission to look at the evidence

that far, to see what -- whether the record is

complete in its inquiry, and whether it does wish to

ask interested parties to file evidence. It would be

my submission that the Commission does not have the

jurisdiction over a non- -- or over an interested

party that is not a utility to compel it to file

evidence, but obviously any request would be given the

very highest consideration. And would, I think, be

taken as a strong signal of what is necessary in order

to prove one's case.

And I think -- the only other issue I would

raise is that Mr. Ghikas raised the possibility of

what would amount to, I think, special costs being

assigned against Mr. Gustafson's client. In our


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submission, that's highly unusual and even raising the

possibility feels like a form of intimidation. And I

would urge the Commission not to follow that

suggestion.


I think anything else I can leave to the

submissions that are on the exhibit. There is a draft

schedule there which we think is fair and reasonable.

If timelines are to be expanded, then of course they

should be expanded for all parties, not just one. And

that concludes my comments.



MR. MILLER: I note the time, Mr. Chair. I have

canvassed the remaining parties, and if their time

estimates hold true they should be no longer than

about ten minutes in total. So would you care to

proceed?

THE CHAIRPERSON: Why don't we try and get through them?

MR. MILLER: Mr. Weafer.

SUBMISSIONS BY MR. WEAFER:

Thank you, Mr. Chairman. The CEC supports

and endorses an oral hearing in this process. One of

the complaints seems to be that there hasn't been

active Commission involvement in the ad hoc processes

that have been referred to, and we believe this is a


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proceeding given, whether you use the broad scope of

issues or the narrow scope of issues, this Panel

should be able to deal directly with the testimony of

witnesses. So we endorse an oral proceeding.

In terms of the inquiry timing, we believe

with a narrower scope you can tighten up the Fortis

timing set out in their submission at page 34, and the

difference between a written and an oral may be a

matter of three or four months in difference of --

given the importance of the issues and the future

activities of the utility that that time is worth

taking to get this right.

So those are our submissions.

THE CHAIRPERSON: Thank you, that's useful.

MR. MILLER: Mr. Andrews.

SUBMISSIONS BY MR. ANDREWS:

BCSEA and SCBC support there being an oral

hearing in this proceeding, for reasons that have been

made already. They also support the Staff's proposal

regarding the sequence of opportunities to file

evidence and information requests on them, and there

being a second procedural conference. I think those

are my submissions subject to any questions.


MR. MILLER: Mr. Wieringa.

SUBMISSIONS BY MR. WIERINGA:


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MR. WIERINGA: In our letter we had suggested a written

process. I think what we're suggesting now is based

on what we've heard is that there might be some things

that you might want to consider in a written process;

otherwise we're in favour of an oral process.


MR. MILLER: Mr. Christian.

SUBMISSIONS BY MR. CHRISTIAN:

Fortis proposes a hearing process that

commences with the filing of evidence by itself by

Fortis, and B.C. Hydro agrees this is a reasonable way

to start off this process, except as noted in my

earlier submissions that sufficient allowance needs to

be made for competitors of Fortis to put in their

evidence with respect to their AES services.

In this regard I just want to follow up on

-- when I made those submissions earlier I was talking

about the prospect of making allowance for them,

perhaps inviting them. And the reason I was careful

to use those words was because I'm echoing concerns

raised by Mr. Wallace, that it's not clear to me that

the Commission has the ability to compel certainly the

non-utility complainants but even necessarily Corix,

to compel them to put evidence forward.

Fortis proposed an August 31 filing date,

which seems reasonable, and Fortis also proposes a


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hearing schedule that would end about a year from now,

as I read it, and includes two rounds of IRs and an

oral hearing. And despite that there's -- perhaps

groundswell is too strong a word, but there seems to

be some enthusiasm for an oral hearing, B.C. Hydro's

view is that it's hard to make that determination in

the absence of making the determination of what the

scope should be. In other words, if the scope is

relatively narrow as B.C. Hydro proposes, it would

have thought that an IR round, maybe two, and written

submissions would be sufficient to deal with the

matters that are in issue. But on the other hand, if

the scope is broad and generic in the way proposed by

staff, then a full-on hearing with multiple IR rounds

and an oral process at the end might well be required.

And so I think the issues of process and

type of -- and a hearing -- or sorry, the scope issues

that we discussed earlier and the type of hearing are

very much interrelated. And the broader and the more

generic the hearing, the more complex and lengthier

the process will have to be necessarily because of the

breadth of issues that are engaged by parties that

would otherwise be merely viewing largely from the

outside.


And the last comment I'd like to make is


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with respect to a comment made by Mr. Ghikas about the

appropriateness of using the IR process to elicit or

advance legal arguments. Generally speaking, Hydro

agrees with Mr. Ghikas that IRs are not useful to

elicit or advance legal argument. But in this case it

seems that if the Commission does accept B.C. Hydro's

recommendations with respect to how to proceed, namely

by requiring the parties to identify which of the

three buckets their AES activities fall within, it

would be helpful to have that initial evidentiary

filing, have at least a summary of the legal basis and

the argument by which the Fortis or Corix or any of

the others say that their activities fall into those

buckets. In other words, if Fortis, as I understand

it, they say all their AES activities fall within the

bucket of regulated services, their evidentiary

filing, it seems to me, could usefully – and help this

process move along expeditiously – say why, by

reference to the Utilities Commission Act.

And those are my submissions, subject to

any questions.


MR. MILLER: Mr. Chair, I believe Mr. Ghikas has a brief

reply comment.

REPLY BY MR. GHIKAS:

MR. GHIKAS: Thank you, Mr. Chairman. There is actually


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three, but I will be very brief.

The first point is that the timing of some

of the schedules put forward would have the initial

filing being filed relatively close. Given the

magnitude of the potential evidence that has to be put

in, I would just urge the Commission to ensure that

there is sufficient time for the preparation of the

initial evidence, and I believe that the timing that's

set out in the Fortis proposal would allow for that.

The second point is that, while I may have

misheard, I'm not sure whether the process that was

outlined by my friend Mr. Miller accounted for

rebuttal evidence to be filed by Fortis. But in any

event, I notice it's absent from my friend Mr.

Wallace's, and I would submit that it would be

appropriate to provide for that.

Finally, the -- oh, sorry. There is one

more point. Just with respect to my friend Mr.

Christian's comment on having panels testify. That

issue, I'll just cite the section. It's Section 2(4)

of the UCA, which refers to the Administrative

Tribunals Act, and Section 34(3) of the Administrative

Tribunals Act deals with witnesses. And I think

you'll find, if you go there, it applies to persons

and not public utilities.

Finally, my friend Mr. Gustafson raised the


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possibility of interim relief for his clients

suspending the use of EEC funds. My only comment at

this stage would be that that type of request would

have to be supported by an application and supported

by evidence, which at this point there is none

supporting his clients' allegations. And that would

have to also articulate the harm to his clients, and

the harm to the other parties of granting the relief

that he seeks. And including the customers of Fortis

and Fortis itself.

So, those are my reply submissions on that

point. Subject to any questions, I am finished.

THE CHAIRPERSON: This is just -- might be a bit of an

odd question, but Fortis has taken the position this

should be a generic, not a specific inquiry. Is that

correct?

MR. GHIKAS: Correct.

THE CHAIRPERSON: And if it was a generic inquiry, would

you then have rebuttal by who?

MR. GHIKAS: Well, that's a fair question. The reason is

that it's founded by the complaints. I mean, there

still is a complaint in this process. And if you're

going to have the complainants filing evidence, the

Fortis utility should be permitted to respond to that

evidence.

In the absence of the complaints, it's a


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more generic proceeding, and I can take your point.

But in the presence of a complaint, I think the

appropriate process would involve rebuttal evidence.


MR. GHIKAS: Thank you.

MR. WALLACE: Mr. Chairman, I rise simply to correct a

mistake that Mr. Ghikas made, I assume not

deliberately, in his characterization of our

timetable. We do, on October 31st, allow for reply

evidence, which I consider to be rebuttal evidence, by

Fortis. So we do see it as appropriate.


MR. MILLER: Mr. Chair, I am not aware of any further

procedural issues to address.

THE CHAIRPERSON: Are there any further procedural issues

that anyone wishes to raise at this time?

Thank you. We will adjourn. I appreciate

the input that has been provided today, and in due

course the zookeepers will work through the excrement

and deliver a decision.

COMMISSIONER RHODES: Go Canucks Go!

(PROCEEDINGS ADJOURNED at 12:43 P.M.)

BRITISH COLUMBIA UTILITIES COMMISSION · June 15, 2011 APPEARANCES P. MILLER Commission Counsel M....

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