accumulated in cost of energy accounts throughout the year.

Size: px

Start display at page:

Download "accumulated in cost of energy accounts throughout the year."

Edith Blake
5 years ago
Views:

1 23. Reference: Application, Volume 1, Chapter 2, page 2-, lines (b) Please provide illustrative examples based on the F2006 forecast of how the actual Heritage Energy will be established in cases where: Thermal output from Heritage Resources and/or market purchases to meet load are higher than forecast as a result of either increased domestic load, increased use in lieu of non- Heritage Resources, or lower hydraulic generation than forecast Thermal output from Heritage Resources and/or market purchases to meet load are lower than forecast as a result of either lower domestic load, lower use in lieu of non- Heritage Resources, or higher hydraulic generation than forecast RESPONSE: The following steps are taken to calculate Heritage Deferral Account (HDA) and Non-Heritage Deferral Account (NHDA) transfers (please see BC Hydro s response to BCUC IR # for an explanation of the HDA and the NHDA.): Forecast Supply and Cost: 1) Forecast Heritage Contract supply and costs for F2006 are based on forecast load, known snow-pack, known reservoir conditions, normal precipitation levels, forecast market price of resources, forecast deliveries under take or pay contracts and other related information. Actual Costs: 2) Actual energy supply costs under the Heritage Contract and otherwise wil be accumulated in cost of energy accounts throughout the year. Heritage Cost of Energy (CO E) s: 3) Actual costs wil vary from forecast due mainly to variances in water inflows market prices of gas and electricity, weather and demand. 4) s between actual and forecast values due to changes in customer demand/load wil not be recorded for HDA purposes. 5) s in cost of energy due to changes in the supply or mix of energy and price of energy wil be recorded for HDA purposes. Non-Heritage COE variances: 6) The same steps as 3) to 5) above are applied to a different pool of resources for NHDA purposes.

2 Information Request No (b) REVISED Dated: 2 March 2004 Ii cation 2004/05 and 2005/06 The calculation of the amounts that would be recorded for deferral account treatment arising from changes to load, resource mix or price is provided in the following two examples.

3 Example 1: F2006 Example of Thermal output and/or market purchases higher than forecast Domestic (in Table 1. Forecast $ millons) and Simulated COE Results for Example Forecast F2006 Hydro 1 generation 22. $277. Natural gas or thermal generation 23. Market purchases 55.4 Other Costs Heritage COE $379.9 A Independent Power Producers and long-term purchase commitments Non- Integrated Areas Gas transportation Displaced Hydro Non-Heritage COE Total Domestic COE $ $428.4 D $808. Simulated Results $ $ B $400. $431.6 E $889. $8. (11. (75. $(78.2) c $(3. (0.2) ($3.2) F $(81. Domestic Energy (GWh) Hydro generation (net of exchange and displaced) ,453 Natural gas for thermal generation (103) Market Purchases ) Heritage Supply Independent Power Producers and long-term purchase commitments (47) Non- Integrated Areas (1) Non Heritage supply (48) Total Domestic Energy 55, Forecast Aggregate Unit Cost of Heritage Supply per MWh (Net of Skagit) MWh) Forecast Aggregate Unit Cost of Non- Heritage Supply per MWh $60. Supply Heritage COE (A) / (Heritage supply -340 Non-Heritage COE (D) / Non-Heritage Component Unit Cost per MWh Hydro generation $6. $6. 01) Natural gas or thermal generation $120. $116. $4. Market Purchases $36. $47. $(10. 76) IPP and Long Term purchase commitments $56. $56. 05) Non- Integrated Areas $142. $141. $1. 1 Other Costs include Canadian and US transmission for Skagit deliveries and Compensation and Mitigation costs.

4 Table 2. Reconciliation of Forecast F2006 to Simulated Forecast Heritage COE $ millons Explanation $379. Forecast Heritage delivery less Skagit energy x Forecast Aggregate Unit Cost of Heritage delivery = ( ) GWh x $7.98 /MWh Change in quantity delivered (0. Quantity variance =Change in delivery x (HPO quantity variance not deferred) Forecast Aggregate Unit Cost of Heritage energy = GWh x $7.98/MWh Simulated charge excluding Skagit $379. Actual Heritage energy delivered less Skagit (HPO biled to ratepayers) energy x Forecast Aggregate Unit Cost of Heritage Energy =( )GWh x $7.98/MWh HPO Energy deferred 79. Sum of mix and price variance - see Table 3 below Simulated Heritage COE $458. Forecast Non- Heritage COE $428.4 Forecast Non-Heritage delivery x Forecast Aggregate Unit Cost of Non-Heritage delivery = x $60.27/MWh Change in quantity delivered (Non-Heritage quantity variance not deferred) Change in Non-Heritage delivery x Forecast Aggregate Unit Cost of Non-Heritage delivery = 48MWh x 60.27/MWh Simulated charge $431. Actual Non-Heritage energy delivered x (Non-Heritage biled to ratepayers) Forecast Aggregate Unit Cost of Non-Heritage Energy =7 156 GWh x $60.27/MWh Non-Heritage energy variance deferred Sum of mix and price variance - see Table 4 below Simulated Non-Heritage COE $431.

5 !:?()() BC Old Age Pensioners' Or.ganization Table 3. Heritage COE s - Example 1 ($ Millons) Forecast Hydro generation $ 277. Natural gas or thermal generation 23. Market Purchases 55.4 Other Costs 22. Total Heritage Cost of Energy $ 379. Simulated Mix Quantity Volume Price IOtal F2006 Varlance Varlanc.t ' Varlance $ 269. $ (2. $ 11. $ 8. (0.4) 35. (11. (0. (12.4) ( (36. (10. (46. (29. ( $ 458. $(50. Total HPO energy variances deferred Table 4. Non-Heritage COE s - Example 1 ($ Milions) Forecast F2006 F200 Simulated IPP and L T purchases $ 397. $ 400. Non-integrated areas 0 Gas Transporttion 0 Mix $ 0. (0. Quantlty $ (2. (0. Volume Varlance $ (2. (0. Price Varlance $ (0. Total $ (3. Displaced Energy (0.2) (0. Total Non-Heritage Cost of Energy $ 431. $ 0. J $ (2.9). $ (2.8) (0.4) F$ (3. Total Non-Heritage energy variances deferred K $ IO 3\ Notes: 1) Mix : (Actual Volume - Forecast Volume) X (Forecast Component Unit Cost - Forecast Aggregate Unit Cost) 2) Quantity : (Actual Volume - Forecast Volume) X Forecast Aggregate Unit Cost 3) Volume : Mix + Quantity 4) Price : (Forecast Component Unit Price - Actual Component Unit Price) X Actual Volume 5) Some columns do not total due to rounding

6 Table 5. Reconcilation of s (in $millons) HPO energy variance deferred Change in Heritage delivery Total Heritage Energy Non-Heritage energy variance deferred Change in Non-Heritage delivery Total Non-Heritage Energy HPO energy variance deferred Non-Heritage energy variance deferred Total to Deferral Accounts $79. (0. $78. $0. $ 3. $79. $79.

7 Example 2: F2006 Example of Thermal output and/or market purchases lower than forecast, IPP start up deferred. (in $ milions) F2006 Table 6. Forecast and Simulated Results for Example 2 Domestic Cost of Energy Forecast Hydro generation $277. Natural gas or thermal generation 23. Market purchases 55.4 Other Costs 22. Heritage COE $379.9 A1 Independent Power Producers and long-term purchase commitments Non- Integrated Areas Gas transportation Displaced hydro Non-Heritage COE Total Domestic COE $ $428.4 D1 $808. Simulated Results $ $343.6 B1 $ $4 $757. $( $ 36.3 C1 $ $ $51. Domestic Energy (GWh) Hydro generation (net of exchange and displaced) Natural gas for thermal generation Market Purchases Heritage Supply Independent Power Producers and long-term purchase commitments Non- Integrated Areas Non-Heritage Supply Total Domestic Energy ) ) ) Forecast Aggregate Unit Cost of Heritage Supply per MWh. (Net of Skagit) Forecast Aggregate Unit Cost of Non- Heritage Supply per MWh Component Unit Cost per MWh $7. $60 Heritage COE (A 1) / (Heritage supply -340 MWh) Non-Heritage COE (D1) / Non-Heritage Supply

8 Table 7. Reconcilation of Forecast F2006 to Simulated (in $milions) $ millions lanation Forecast Heritage COE $379. Forecast Heritage delivery less Skagit energy x Forecast Aggregate Unit Cost of Heritage delivery = ( ) GWh x $7.98/MWh Change in quantity delivered 11. Quantity variance =Change in delivery x (HPO quantity variance not deferred) Simulated charge excluding Skagit $391.4 (HPO biled to ratepayers) Forecast Aggregate Unit Cost of Heritage energy =1,444 GWh x $7.98/MWh Actual Heritage energy delivered less Skagit energy x Forecast Aggregate Unit Cost of Heritage Energy =(49, )GWh x $7.98/MWh HPO Energy deferred (47. Sum of mix and price variance - see Table 8 below Simulated Heritage COE $343. Forecast Non-Heritage COE $428.4 Forecast Non Heritage delivery x Forecast Aggregate Unit Cost of Non-Heritage delivery = GWh x $60. 27/MWh Change in quantity delivered (18. Change in Non-Heritage delivery x (Non-Heritage quantity variance not deferred) Forecast Aggregate Unit Cost of Non- Heritage delivery= - 303MWh x $60.27/MWh Simulated charge $410. Actual Non-Heritage energy delivered x (Non-Heritage biled to ratepayers) Non- Heritage energy variance deferred Simulated Non-Heritage COE $4 Forecast Aggregate Unit Cost of Non- Heritage Energy =6 805 GWh x $60. 27/MWh Sum of mix and price variance - see Table. 9 below

9 .$ _ BC Old Age Pensioners' Organization BC Hydro REVISED Response issued 02 April 2004 App Table 8. Heritage COE s - Example 2 Forecast Simulated Mix Quantity Volume Price Total $ Millions F2006 F2006 ' Varianc Variancl! Hydro generation $ 277. $ $ (21. (16. $ (16. Natural gas or thermal generation Market Purchases ( Other Costs Total Heritage Cost of Energ 79. L33_ G1$( C1 $ 36. Total HPO energy variances deferred Table 9. Non- Heritage COE s - Example 2 ($ Millions) IPP and L T purchases Non-integrated areas Gas Transportation Displaced Enerqy Total Non-Heritaae Cost of Ener, Forecast F2006 $ $ Simulated F2006 $ $44 Mix ariance' $ (1. Quantity $18. Volume arianc $ 17. Price arianc $ (2. Total $ J1 $ F1 $ Total Non-Heritage energy variances deferred K1 $ 1::::\ Notes: 1) Mix : (Actual Volume - Forecast Volume) X (Forecast Component Unit Cost - Forecast Aggregate Unit Cost) 2) Quantity : (Actual Volume - Forecast Volume) X Forecast Aggregate Unit Cost 3) Volume : Mix + Quantity 4) Price : (Forecast Component Unit Price - Actual Component Unit Price) X Actual Volume

10 Table 10. Reconcilation of s (in $milions) HPO energy variance deferred Change in heritage delivery Total Heritage Energy Non-Heritage energy variance deferred Change in Non-Heritage delivery Total Non-Heritage Energy HPO energy variance deferred Non-Heritage energy variance deferred Total to Deferral Accounts $( $(36. $ 3. (18. $( $(47. $(44.

hydro /Yl- Fax: (604) Y,-- ww.bchydro. com Yours sinc

hydro /Yl- Fax: (604) Y,-- ww.bchydro. com Yours sinc -".... /Yl- -.-'- BC hydro Tony Morris Acting Chief Regulatory Offcer Phone: (604) 623-4046 Fax: (604) 623-4407 June 27, 2005 Mr. Robert J. Pellatt Commission Secretary British Columbia Utilities Commission