BCUC Completes Stage 2 of Generic Cost of Capital Proceeding

VANCOUVER, British Columbia, Nov. 29, 2024 (GLOBE NEWSWIRE) — Today, the British Columbia Utilities Commission (BCUC) completed Stage 2 of its Generic Cost of Capital proceeding, which acceptable the allowed instrumentality for nationalist utilities regulated by the BCUC.

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The BCUC is liable for ensuring shareholders of nationalist utilities are afforded a tenable accidental to gain a just instrumentality connected their invested capital. In determining a just return, the BCUC considered each utility’s concern risks compared to the benchmark utility, FortisBC Energy Inc. (FortisBC), and immoderate changes since the past outgo of superior review.

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The BCUC recovered that each utility’s wide concern hazard was higher than the benchmark inferior and has changed implicit clip to varying degrees.

Based connected these assessments, the BCUC approved the pursuing instrumentality connected equity and equity components, which unneurotic signifier the ground for each utility’s allowed return:

To find the equity component, the BCUC examined each utility’s concern hazard by comparing them to the benchmark inferior and immoderate changes since the past assessment. The BCUC adjusted for a size quality betwixt the utilities and the benchmark utility, based connected fiscal modelling and marketplace data, to find the instrumentality connected equity. As the benchmark utility, FortisBC’s equity constituent is 45% and its instrumentality connected equity is 9.65%, arsenic outlined successful the Stage 1 decision.

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As portion of its decision, the BCUC besides established a default allowed instrumentality for TES utilities (TES Default), arsenic these utilities proceed to look unsocial and higher concern risks compared to the benchmark utility. The TES Default volition trim regulatory load connected tiny utilities and beforehand regulatory efficiency.

The approved allowed returns are effectual January 1, 2024, and the interaction of these changes connected rates volition beryllium carried retired connected a utility-by-utility basis.

For much accusation connected the BCUC’s determination oregon the Stage 2 Generic Cost of Capital proceeding, delight sojourn the proceeding page.

Background

In September 2023, the BCUC completed Stage 1 of the Generic Cost of Capital Proceeding, which determined a caller allowed instrumentality for FortisBC and FortisBC Inc. 

In outgo of superior proceedings, the BCUC applies the Fair Return Standard, which requires the instrumentality connected a utility’s invested superior to beryllium comparable to the instrumentality disposable to shareholders connected akin investments and to support the utility’s fiscal integrity and pull caller investments. The BCUC besides follows the Standalone Principle to guarantee utilities are evaluated arsenic standalone entities, autarkic of relationships, fiscal arrangements, oregon dependencies.

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About the BCUC 

The BCUC is an autarkic regulatory body, liable for regulating BC’s vigor utilities, basal automobile security rates, and intra-provincial pipeline rates. It is the BCUC’s relation to equilibrium the interests of ratepayers and different stakeholders with the interests of the businesses it regulates. The BCUC carries retired just and transparent reviews of matters wrong its jurisdiction and considers nationalist input wherever nationalist involvement is impacted. The BCUC is besides the Administrator of BC’s Fuel Price Transparency Act and is liable for collecting and publishing accusation astir gasoline and diesel activities successful BC, successful an effort to beforehand competitiveness and nationalist assurance successful the substance market.

CONTACT INFORMATION 

Kelsey Newsham
Communications Specialist  
Phone: 604.660.4317
Email: media@bcuc.com

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