BC HYDRO F2012 F2014 REVENUE REQUIREMENTS EXHIBIT A2 8

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1 ERICA M. HAMILTON COMMISSION SECRETARY web site: VIA March 31, 2011 SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, BC CANADA V6Z 2N3 TELEPHONE: (604) BC TOLL FREE: FACSIMILE: (604) Log No BC HYDRO F2012 F2014 REVENUE REQUIREMENTS EXHIBIT A2 8 Ms. Joanna Sofield Chief Regulatory Officer British Columbia Hydro and Power Authority 333 Dunsmuir Street Vancouver, BC V6B 5R3 Dear Ms. Sofield: Re: British Columbia Hydro and Power Authority Project No /Order G F2012 to F2014 Revenue Requirements Application Commission staff submits the following documents for the record in this proceeding: British Columbia Hydro and Power Authority March 30, 2011 Application to Place into Abeyance the Pricing Principles Applicable to the Residential Inclining Block, Large General Service and Medium General Service Rates Commission Order G suspending the pricing principles applicable to BC Hydro s RIB, MGS and LGS rates, as prescribed by Orders G and G and as described in the Application. Letter dated March 30, 2011 from British Columbia Old Age Pensioners Organization et al. supporting the BC Hydro Application for Abeyance. Yours truly, cms Enclosure cc: Registered Interveners (BCH RR RI) Erica M. Hamilton PF/BCH_F2012 F2014 RRA/A2 8_BCH Abeyance Pricing Principles_RIB LGS MGS Rates

2 Joanna Sofield Chief Regulatory Officer Phone: Fax: March 30, 2011 Sixth Floor 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Hamilton: RE: Project No (BCUC) British Columbia Hydro and Power Authority (BC Hydro) F2012 to F2014 Revenue Requirements Application (F12-F14 RRA) BC Hydro writes with respect to BCUC Order No. G-61-11, issued March 28, 2011, which suspended the interim, refundable rate increase approved by BCUC Order No. G However, absent any further directives from the BCUC, rate changes and bill increases for BC Hydro s Residential Inclining Block (RIB), Large General Service (LGS) and Medium General Service (MGS) rate customers will still come into effect on April 1, 2011 as further discussed below. BC Hydro assumes that the intent of Order No. G is to maintain the status quo, and accordingly applies to the BCUC for an order placing into abeyance the pricing principles applicable to the RIB, MGS and LGS rates. RIB Rate BCUC Order No. G issued on March 14, 2011 approved a pricing principle (Higher of class average rate changes (CARC) or 10 per cent), to be effective April 1, On March 24, 2011 BC Hydro filed with the BCUC a letter explaining that the interim rate increase of 9.73 per cent, the effective change in the Deferral Account Rate Rider (DARR) initially approved by Order No. G and the effect of the expiration of the F11 RRA NSA credit rider resulted in a CARC of per cent at April 1, The effect of BCUC Order No. G in suspending the interim rate increase on April 1, 2011, the expiration of the F11 RRA NSA credit rider and the effective year-over-year change in the DARR will yield a CARC of 0.37 per cent on April 1, Since the CARC on April 1, 2011 would not be zero, absent any further action, BC Hydro would be required to apply the Higher of CARC or 10 per cent principle directed by Order No. G to the RIB rate. The higher of CARC or 10 per cent in this instance is 10 per cent. As such, the effect of applying this principle at this time would be British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

3 March 30, 2011 F2012 to F2014 Revenue Requirements Application (F12-F14 RRA) Page 2 of 3 that 70 per cent of residential customers would see a bill increase, while 30 per cent of residential customers would experience a bill decrease. BC Hydro does not believe that the BCUC, after suspending the F2012 interim rate increase, intended that RIB rate customers continue to see the above noted rate and bill changes. BC Hydro is therefore requesting that the pricing principle prescribed by Order No. G be placed into abeyance until the BCUC establishes new F2012 interim rates, and that the current RIB rates continue to be charged effective April 1, LGS and MGS On June 29, 2010 the BCUC issued Order No. G approving the LGS Rate Application Negotiated Settlement Agreement (LGS NSA), including pricing principles concerning BC Hydro s LGS and MGS rates. The LGS and MGS rates are complex. Appendix X of the F12-F14 RRA sets out the methodology required to determine the appropriate LGS and MGS rates to be effective on April 1, 2011, and absent any further direction from the BCUC, the approved pricing principles for the MGS and LGS rates require increases to some of the rate components on April 1, 2011 as discussed below. With regard to the MGS rate, BC Hydro is directed by Order No. G to increase the Tier 2 energy rate on April 1, 2011 by an amount that will result in an incremental bill impact of no more than 2 per cent. BC Hydro is hereby applying to have this directive placed into abeyance until the BCUC establishes new F2012 interim rates, and that the current MGS rate continue to be charged effective April 1, With regard to the LGS rate, the Part 2 Energy Rate will remain at 6.68 cents/kwh for F2012 (the same rate as in place as of January 1, 2011). However, the Part 1 energy rates are required to be calculated residually in order to maintain revenue neutrality. Although the interim rate increase of 9.73 per cent has been suspended, Order No. G would appear to still direct BC Hydro to calculate the Part 1 LGS energy rates based on the forecast F2012 revenue requirement. For certainty, BC Hydro is therefore applying to the BCUC for approval to have the Part 1 LGS energy rates that are currently in place continue to be charged as of April 1, 2011 and until the BCUC establishes new F2012 interim rates. BC Hydro respectfully requests that the BCUC provide its decision on this application no later than March 31, A draft order reflecting the above requests is attached.

4 March 30, 2011 F2012 to F2014 Revenue Requirements Application (F12-F14 RRA) Page 3 of 3 For further information, please contact Fred James at or by at bchydroregulatorygroup@bchydro.com. Yours sincerely, Joanna Sofield Chief Regulatory Officer dr/rh Enclosure Copy to: BCUC Project No (F12-F14 RRA) Registered Intervener Distribution List.

5 B R I T I S H COLUMBIA U T I L I T I E S C O M M I S S I O N O R D E R N U M B E R G SIXTH FLOOR, 900 HOWE STREET, BOX 250 VANCOUVER, BC V6Z 2N3 CANADA web site: TELEPHONE: (604) BC TOLL FREE: FACSIMILE: (604) IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 and An Application by British Columbia Hydro and Power Authority To Suspend the Application of Certain Pricing Principles BEFORE: WHEREAS: L.A. O Hara, Commissioner D. Morton, Commissioner March 30, 2011 A.A. Rhodes, Commissioner O R D E R A. On June 29, 2010, by Order G , the (Commission) approved the negotiated settlement agreement arising from British Columbia Hydro and Power Authority s (BC Hydro) Large General Service (LGS) Rate Application, including pricing principles to be applied to BC Hydro s LGS and Medium General Service (MGS) rates, effective April 1, 2011; B. On March 14, 2011, by Order G-45-11, the Commission directed BC Hydro to apply a new residential inclining block (RIB) rate pricing principle, effective April 1, 2011; C. On March 14, 2011, by Order G-41-11, the Commission approved, on an interim and refundable basis, an average rate increase of 9.73 percent to be effective April 1, 2011; D. On March 28, 2011, by Order G-61-11, the Commission suspended the average rate increase arising from Order G-41-11; E. On March 30, 2011, BC Hydro filed an application (Application) for approval to suspend the pricing principles applicable to the RIB, MGS, and LGS rates arising from Orders G and G ; F. The Commission has reviewed the Application and concludes that the relied sought is appropriate and in the public interest. NOW THEREFORE the Commission orders that subject to a further order in the F2012 to F2014 Revenue Requirements Application proceeding regarding the establishment of interim rates, the pricing principles applicable to BC Hydro s RIB, MGS and LGS rates, as prescribed by Orders G and G and as described in the Application, are suspended. DATED at the City of Vancouver, in the Province of British Columbia, this 30 th day of March BY ORDER Order/G-62-11_BCH Suspend Pricing Principles RIB-LGS-MGS Original signed by: A.A. Rhodes Commissioner

6 The British Columbia Public Interest Advocacy Centre West Pender Street Vancouver, BC V6E 2N7 Coast Salish Territory Tel: (604) Fax: (604) James L. Quail Ros Salvador Leigha Worth Barristers & Solicitors Jodie Gauthier Articled Student March 30, 2011 our file 7481 via Sixth Floor 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Hamilton: RE: Project No (BCUC) British Columbia Hydro and Power Authority (BC Hydro) F2012 to F2014 Revenue Requirements Application (F12-F14 RRA) Our clients, who speak in this proceeding for the interests of BC Hydro s residential ratepayers, wholeheartedly agree with and fully support the comments contained in Ms Sofield's letter dated today, requesting that adjustments to the Residential Inclining Block rate be held in abeyance, in consequence of the suspension of the April 1 interim rate order. Yours truly, BC PUBLIC INTEREST ADVOCACY CENTRE Jim Quail, Barrister & Solicitor Executive Director copy via parties of record