IN THE MATTER OF the
Public
Utilities Act, (the "Act"); and
IN THE MATTER OF an application, as amended, by
Newfoundland Power Inc. (the “Applicant”) for an order
pursuant to Sections 41, 78 and 80 of the Act:
WHEREAS
Section 41 of the Act requires that a public utility shall submit
an annual capital budget of proposed improvements or additions to its property
to the Board of Commissioners of Public Utilities (the "Board") for
its approval not later than the 15th day of December in each year for the next
calendar year; and
WHEREAS
Section 78 of the Act provides that the Board may fix and determine the rate
base of a public utility; and
WHEREAS
Section 80 of the Act provides a public utility is entitled to earn annually a
just and reasonable return on rate base as approved by the Board; and
WHEREAS
in Orders No. P.U. 16 and 36 (1998-99), the Board provided for an automatic
adjustment formula to adjust rates annually based upon variations in the rate
of return on rate base; and
WHEREAS
the Applicant submitted its original application on August 15, 2000, and on
September 22, 2000, the Board conducted a public hearing to consider the
application in its Hearings Room in St. John's; and
WHEREAS
the Board requested additional information of the Applicant with respect to the
matters contained in the application which information was provided to the
Board by the Applicant; and
WHEREAS the Board retained
the firm of Grant Thornton LLP to review the application and schedules and
calculations contained therein; and
WHEREAS Mr. William Brushett,
C.A., of Grant Thornton filed an affidavit with the Board attaching the report
(“Grant Thornton Report”) of their review; and
WHEREAS the
Grant Thornton Report confirmed the calculations in the application, including
the calculations of forecast rate base and invested capital to be used in the
automatic adjustment formula, and that the calculations are in accordance with
P. U. 36 (1998-99) and P. U. 18 (1999-2000); and
WHEREAS
the Applicant was represented by Peter Alteen and Gerard Hayes, Counsel to the
Applicant; and
WHEREAS
evidence in support of the application was presented by the following
management of the Applicant: Philip Hughes, President and Chief Executive
Officer; Barry Perry, Vice-President, Finance and Chief Financial Officer; John
Evans, Vice-President, Engineering and Energy Supply; and Allan Skov, Manager,
Information Services; and
WHEREAS
the evidence in support of the application provided details of the Applicant’s
proposed 2001 Capital Budget; its 1999 rate base; and its forecast average rate
base and average invested capital for 2000 and 2001; and
WHEREAS Randy
Pelletier, LL.B., was present as Counsel to the Board; and
WHEREAS the Board received an intervention from
Mr. David Power, Branch Manager, SONA Computer Inc., of St. John’s regarding
certain tendering practices of the Applicant for personal computers; and
WHEREAS after hearing the intervenor and the
Applicant’s response the Board cannot conclude on the basis of evidence before
it that the tendering practices of the Applicant in this case were contrary to
sound utility management; and
WHEREAS nonetheless, the Board feels that the
Applicant ought to consider how it can make its tender process for personal
computers more transparent and open to a wider range of suppliers; and
WHEREAS the
Board has carefully considered all the evidence and comments.
IT IS HEREBY ORDERED THAT:
1. The Applicant's
capital budget in the amount of $39,109,000 as set out in Schedule
A hereto is hereby approved.
2. The Applicant's
proposed 2001 capital expenditures as set out in Schedule
B hereto, are hereby approved.
3. The Applicant's
proposed 2001 lease in excess of $5,000 per year as set out in Schedule C is hereby approved.
4. The Applicant’s
rate base for the year ending December 31st, 1999 be hereby fixed
and determined at $505,688,000.
5. The Applicant’s
forecast average rate bases for the year ending December 31st, 2000
of $518,724,000 and for the year ending December 31st, 2001 of
$526,065,000 are hereby approved.
6. The use of the
forecast average rate base for 2001 of $526,065,000 and the forecast average
invested capital for 2001 of $584,095,000 be approved for the purpose of
calculating allowed return on rate base for 2001 using the automatic adjustment
mechanism pursuant to Orders No. P.U. 16 and 36 (1998-99).
7. The Applicant will present to the Board, in conjunction with the 2002 Capital Budget
application, an up-to-date status report on the 2001 capital expenditures showing, for each project,
i) the approved budget for 2001,
ii) the expenditures prior to 2001,
iii) the expenditures to the date of the application in 2001,
iv) the expected remaining expenditures in 2001,
v) the variance between the expected total expenditures and the approved budget, and
vi) an explanation of the variance.
8. The Applicant will present an annual
report to the Board on its 2001 capital expenditures within sixty (60) days
after the end of the year 2001.
9. All costs and
expenses of the Board incurred in connection with the Application shall be
borne by the Applicant.
DATED at St. John's, Newfoundland, this
6th day of October, 2000
Darlene Whalen, P.Eng.,
Vice-Chairperson.
Raymond A. Pollett,
Commissioner
_____________________________
William Crosbie, P. Eng.,
Commissioner
G. Cheryl Blundon,
Board Secretary.
|
Newfoundland
Power Inc. |
|
2001 Capital
Budget |
|
2001 Budget
Summary |
|
(000s) |
Energy
Supply $ 5,419
Substations 2,279
Transmission 2,169
Distribution 18,701
General
Property 1,723
Transportation 1,866
Telecommunications 683
Information
Systems 3,619
General
Expenses Capital 2,650
Total $ 39,109
Newfoundland
Power Inc.
2001 Capital
Budget
ENERGY SUPPLY
(000s)
HYDRO PLANTS – FACILITY REHABILITATION $1,443
THERMAL PLANTS – FACILITY REHABILITATION 253
HYDRO PLANT – SURGE TANK REPLACEMENT 900
HYDRO PLANT – PENSTOCK REPLACEMENT 55
HYDRO PLANT – RUNNER UPGRADE 465
GREENHILL GAS TURBINE – REPLACE GOVERNOR 511
& CONTROL
LOGIC
SYSTEM CONTROL CENTRE – EXTEND SCADA CAPABILITIES 1,612
MAJOR ELECTRICAL EQUIPMENT REPAIRS 150
RELOCATE GAS TURBINE 30
TOTAL – ENERGY SUPPLY $5,419