B-7 Craig P. Donohue Director, Regulatory Affairs & Gas Supply Pacific Northern Gas Ltd. Suite 950 1185 West Georgia Street Vancouver, BC V6E 4E6 Tel: (604) 691-5673 Tel: (604) 697-6210 Email: cdonohue@png.ca Via Courier November 23, 2007 B.C. Utilities Commission File No.: 4.2.7(2008) 6th Floor - 900 Howe Street Vancouver, B.C. V6Z 2N3 Attention: Erica M. Hamilton Commission Secretary Dear Ms. Hamilton: Re: Project No. 3698484 2008 Revenue Requirements Application Update for Fort St. John/Dawson Creek Division Enclosed are 20 copies of all of the numerical schedules from PNG s Fort St. John/Dawson Creek division 2008 revenue requirements application updated as of November 23, 2007: 1. To provide an outlook for 2007. The Outlook 2007 figures are the sum of ten months actuals plus PNG s estimates for November and December 2007. 2. To reflect some minor cost of service adjustments that came to light while PNG prepared its information responses. 3. To reflect the impact of the allowed return on common equity increasing from the forecast of 8.77 percent contained in the original application to 9.02 percent (i.e. approved low risk benchmark utility return of 8.62 percent plus 40 basis points relative risk premium). 4. To adjust the 2008 gas requirements forecast having regard to the impact of actual deliveries and customer counts as of the end of October 2007 on the gas requirements forecasts for the residential and small commercial customers. 5. To reflect the impact of assuming a lower income tax rate of 31.5 percent.
2 All of the numerical schedules from the original application are enclosed with the designation Updated Nov. 23 07 at the top of each page. In short, the original applied for revenue deficiency of $750,000 has increased to $802,000. A cost of service comparison table is enclosed in the format of the table at Tab Application, Page 2 comparing the updated November 23, 2007 applied for cost of service to the original October 10, 2007 applied for cost of service. Explanations of the major differences between the updated and original applications are described below. COST OF SERVICE CHANGES FROM ORIGINAL TO UPDATED APPLICATION Operating Expenses Budgeted labour expenses have decreased by $14,000 to reflect a correction in the budgeting of labour expenses. The Other expenses are higher as a result of increased shared service cost recovery from PNG due to slightly higher cost allocators. Administrative and General Expenses The Other expenses are higher as a result of increased shared service cost recovery from PNG due to slightly higher cost allocators. Transfers to Capital The transfer to capital rate reflected in the updated schedules is equal to 17.96 percent, slightly higher than the 17.83 percent figure set forth in the original application. This results from some fine tuning of the budget figures and is the main reason for the higher transfers to capital figures. Amortization Expense The 2008 credit amortization has decreased from $233,000 in the original application to $216,000 under the updated application. The main reason is the change in the short and long term debt interest deferral account to reflect updated calculations. Income Tax Expense The reduction in the provision for income taxes results primarily from the lower income tax rate. Return on Common Equity The return on common equity is slightly higher due to the increase in the allowed return on common equity from the forecast of 8.77 percent to 9.02 percent in the update.
3 Short Term Debt Interest Short term debt interest has increased to reflect updated interest rate forecasts. Long Term Debt Interest Long term debt interest has increased to reflect a correction to the determination of the embedded long term debt interest rate. GAS DELIVERIES AND MARGIN CHANGES The relative margin increase of $5,000 from the original application to the updated application reflect the impact of slightly lower forecast deliveries to the residential and small commercial customers and higher deliveries to the small industrial transportation service class. A new small industrial customer requested gas transportation service after the original application was filed. RSAM Rate Rider The Table at Tab Rates, Page 19 has been updated to reflect actual results to the end of October 2007. The proposed RSAM rate rider effective January 1, 2008 has changed slightly in the updated application compared to the original application, accordingly. Rate Summaries The estimated changes to the GCVA rate riders as of January 1, 2008 has been made and reflected in the rate summaries at Tab Rates. PNG s 4 th quarter gas supply cost report will be filed in early December 2007 seeking approval of gas supply cost rate changes. The gas supply cost rate changes specified at Tab Rates are illustrative and will not necessarily correspond to the rate changes requested in PNG s 4 th quarter gas supply cost report. PNG will be prepared to address questions respecting the enclosed at the negotiated settlement meeting scheduled for Tuesday, November 27, 2007. Yours truly, C.P. Donohue cc. Registered Intervenors
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 to Original Oct. 10'07 COST OF SERVICE COMPARISON ($000) Updated 2008 App. Original 2008 App. EXPENSES Nov. 23'07 Oct. 10'07 Difference Operating Labour 1,378 1,391 (14) Other 2,175 2,168 7 Sub-total 3,552 3,559 (7) Maintenance Labour 108 108 0 Other 182 182 0 Sub-total 290 290 0 Administrative and General Labour 0 0 0 Total Company Benefits 474 474 0 Other 995 992 2 Sub-total 1,469 1,467 2 Total (O, M, A & G) Excluding Co. Use 5,311 5,316 (5) Transfers to Capital Operating (201) (198) (2) Transfers to Capital Admin. & Gen. (205) (204) (2) Property Taxes 958 958 0 Depreciation 1,349 1,349 (0) Amortization (216) (233) 17 Other Income (171) (171) 0 Total Expenses Excluding Co, Use 6,826 6,817 9 Income Taxes 276 279 (3) Return on Common Equity 1,088 1,057 31 Short Term Debt 56 52 4 Long Term Debt 1,493 1,476 17 Preferred Shares 0 0 0 Total Cost of Service Excluding Co. Use 9,739 9,682 57 Company Use Gas 399 398 Total Cost of Service Including Co. Use 10,138 10,080 2007 to 2008 Cost of Service Increase (Dec 821 764 57 2007 to 2008 Margin Decrease (Increase) (19) (13) (5) 2008 Revenue Deficiency (Sufficiency) 802 750 52
Tab Application Page 3 (Fort St. John / Dawson Creek Division) Test Year 2008 vs. Decision 2007 COST OF SERVICE COMPARISON ($000) Test Year Decision Difference Outlook EXPENSES 2008 2007 Total Subtotal 2007 Operating Labour 1,378 1,283 95 1,268 Other 2,175 1,989 186 2,063 Sub-total 3,552 3,272 280 3,331 Maintenance Labour 108 95 13 95 Other 182 175 7 172 Sub-total 290 270 20 267 Administrative and General Labour 0 0 0 0 Total Company Benefits 474 485 (11) 498 Other 995 938 57 937 Sub-total 1,469 1,422 47 1,435 Total (O, M, A & G) Excluding Co. Use 5,311 4,965 346 346 5,033 Transfers to Capital Operating (201) (193) (8) (193) Transfers to Capital Admin. & Gen. (205) (215) 10 (217) Property Taxes 958 887 71 887 Depreciation 1,349 1,308 41 1,321 Amortization (216) (297) 81 (296) Other Income (171) (177) 6 201 (153) Total Expenses Excluding Co, Use 6,826 6,279 547 547 6,382 Income Taxes 276 223 53 129 Return on Common Equity 1,088 1,009 78 1,031 Short Term Debt 56 125 (69) 280 Long Term Debt 1,493 1,282 211 1,173 Preferred Shares 0 0 0 274 0 Total Cost of Service Excluding Co. Use 9,739 8,918 821 821 8,995 Company Use Gas 399 434 434 Total Cost of Service Including Co. Use 10,138 9,352 9,429 2007 to 2008 Cost of Service Increase (Decrease) 821 2007 to 2008 Margin Decrease (Increase) (19) 2008 Revenue Deficiency (Sufficiency) 802
(Fort St. John Division) Updated Nov. 23'07 Tab Rates Page 1 Summary of Proposed Rates Effective January 1, 2008 ($/GJ unless otherwise specified) Customer Class Residential (RS1) Rates Effective October 1, 2007 2008 Revenue Requirement 2007 / 08 Gas Supply Cost Change Proposed Rates January 1, 2008 Rate Changes Monthly Fixed Charge $7.00 $7.00 $0.00 Small Commercial (RS2 Large Commercial (RS3) Delivery Charge 2.200 0.250 2.450 0.250 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) RSAM 0.137 (0.034) 0.103 (0.034) Interim Rate Refund Rider - - Subtotal Delivery 2.352 0.250 (0.057) 2.545 0.193 Gas Supply Demand 0.025 0.028 0.053 0.028 Gas Supply Commodity 7.784 (0.355) 7.429 (0.355) GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 7.502 - (0.327) 7.175 (0.327) Total 9.854 0.250 (0.384) 9.719 (0.134) Monthly Fixed Charge $7.00 $7.00 $0.00 Delivery Charge 1.963 0.172 2.135 0.172 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) RSAM 0.137 (0.034) 0.103 (0.034) Interim Rate Refund Rider - - Subtotal Delivery 2.115 0.172 (0.057) 2.230 0.115 Gas Supply Demand 0.024 0.027 0.051 0.027 Gas Supply Commodity 7.760 (0.340) 7.420 (0.340) GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 7.477 - (0.313) 7.164 (0.313) Total 9.592 0.172 (0.370) 9.393 (0.198) Monthly Fixed Charge $150.00 $150.00 $0.00 Delivery Charge 1.494 0.130 1.624 0.130 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Interim Rate Refund Rider - - Subtotal Delivery 1.509 0.130 (0.023) 1.616 0.107 Gas Supply Demand 0.024 0.028 0.052 0.028 Gas Supply Commodity 7.524 (0.220) 7.304 (0.220) GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 7.241 - (0.192) 7.049 (0.192) Total 8.750 0.130 (0.215) 8.665 (0.085) Rate Schedules-08.xls FSJ
(Fort St. John Division) Updated Nov. 23'07 Tab Rates Page 2 Summary of Proposed Rates Effective January 1, 2008 ($/GJ unless otherwise specified) Customer Class Commercial Transportation (RS23 Rates Effective October 1, 2007 2008 Revenue Requirement 2007 / 08 Gas Supply Cost Change Proposed Rates January 1, 2008 Rate Changes Monthly Fixed Charge $125.00 $125.00 $0.00 Delivery Charge 1.432 0.154 1.586 0.154 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Subtotal Delivery 1.447 0.154 (0.023) 1.578 0.131 Small Industrial (RS4) Monthly Fixed Charge $410.00 $410.00 $0.00 Delivery Charge 0.695 0.090 0.785 0.090 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Interim Rate Refund Rider - - Subtotal Delivery 0.710 0.090 (0.023) 0.777 0.067 Gas Supply Demand 0.010 0.012 0.022 0.012 Gas Supply Commodity 7.146 0.074 7.220 0.074 GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 6.849-0.086 6.935 0.086 Total 7.559 0.090 0.063 7.711 0.153 Small Industrial Service (RS6) Monthly Fixed Charge $410.00 $410.00 $0.00 Delivery Charge 0.8792 0.0907 0.9699 0.0907 Company Use 0.0910 (0.0080) 0.0830 (0.0080) GCVA Co. Use Rider (0.0760) (0.0150) (0.0910) (0.0150) Subtotal Delivery 0.8942 0.0907 (0.023) 0.9619 0.0677 Small Industrial Service (RS7 Monthly Fixed Charge $3,000.00 $3,000.00 $0.00 Delivery Charge 0.1748 0.0341 0.2089 0.0341 Company Use 0.0910 (0.0080) 0.0830 (0.0080) GCVA Co. Use Rider (0.076) (0.0150) (0.0910) (0.0150) Subtotal Delivery 0.1898 0.0341 (0.023) 0.2009 0.0111 Authorized Overrun 0.3978 0.0341 (0.0080) 0.4239 0.0261 Rate Schedules-08.xls FSJ
(Fort St. John Division) Updated Nov. 23'07 Tab Rates Page 3 Summary of Proposed Rates Effective January 1, 2008 ($/GJ unless otherwise specified) Customer Class Small Industrial Service (RS9 Rates Effective October 1, 2007 2008 Revenue Requirement 2007 / 08 Gas Supply Cost Change Proposed Rates January 1, 2008 Rate Changes Monthly Fixed Charge $8,547.04 $8,547.04 $0.00 Delivery Charge 0.3331 0.1617 0.4948 0.1617 Company Use 0.0910 (0.0080) 0.0830 (0.0080) GCVA Co. Use Rider (0.0760) (0.0150) (0.0910) (0.0150) Subtotal Delivery 0.3481 0.1617 (0.023) 0.4868 0.1387 Small Industrial Service (RS10 Monthly Fixed Charge $3,095.00 $3,095.00 $0.00 Delivery Charge 0.1229 0.0699 0.1928 0.0699 Company Use 0.0910 (0.0080) 0.0830 (0.0080) GCVA Co. Use Rider (0.0760) (0.0150) (0.0910) (0.0150) Subtotal Delivery 0.1379 0.0699 (0.023) 0.1848 0.0469 Small Industrial Service (RS11 Monthly Fixed Charge $3,095.00 $3,095.00 $0.00 Delivery Charge 0.1487 0.0575 0.2062 0.0575 Company Use 0.0910 (0.0080) 0.0830 (0.0080) GCVA Co. Use Rider (0.0760) (0.0150) (0.0910) (0.0150) Subtotal Delivery 0.1637 0.0575 (0.023) 0.1982 0.0345 Rate Schedules-08.xls FSJ
Tab Rates Page 4 (Dawson Creek Division) Summary of Proposed Rates Effective January 1, 2008 ($/GJ unless otherwise specified) Customer Class Residential (RS1) Rates Effective October 1, 2007 2008 Revenue Requirement 2007 / 08 Gas Supply Cost Change Proposed Rates January 1, 2008 Rate Changes Monthly Fixed Charge $7.00 $7.00 $0.00 Delivery Charge 2.002 0.250 2.252 0.250 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) RSAM 0.137 (0.034) 0.103 (0.034) Interim Rate Refund Rider 0.000 0.000 Subtotal Delivery 2.154 0.250 (0.057) 2.347 0.193 Gas Supply Demand 0.025 0.028 0.053 0.028 Gas Supply Commodity 7.784 (0.355) 7.429 (0.355) GCVA Commodity Rider (0.307) - (0.307) 0.000 Subtotal Commodity 7.502 0.000 (0.327) 7.175 (0.327) Total 9.656 0.250 (0.384) 9.521 (0.134) Small Commercial (RS2) Monthly Fixed Charge $7.00 $7.00 $0.00 Delivery Charge 1.426 0.172 1.598 0.172 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) RSAM 0.137 (0.034) 0.103 (0.034) Interim Rate Refund Rider 0.000 0.000 Subtotal Delivery 1.578 0.172 (0.057) 1.693 0.115 Gas Supply Demand 0.024 0.027 0.051 0.027 Gas Supply Commodity 7.760 (0.340) 7.420 (0.340) GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 7.477 0.000 (0.313) 7.164 (0.313) Total 9.055 0.172 (0.370) 8.856 (0.198) Large Commercial (RS3) Monthly Fixed Charge $150.00 $150.00 $0.00 Delivery Charge 0.946 0.130 1.076 0.130 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Interim Rate Refund Rider 0.000 0.000 Subtotal Delivery 0.961 0.130 (0.023) 1.068 0.107 Gas Supply Demand 0.024 0.028 0.052 0.028 Gas Supply Commodity 7.524 (0.220) 7.304 (0.220) GCVA Commodity Rider (0.307) - (0.307) 0.000 Subtotal Commodity 7.241 0.000 (0.192) 7.049 (0.192) Total 8.202 0.130 (0.215) 8.117 (0.085) Rate Schedules-08.xls DC
Tab Rates Page 5 (Dawson Creek Division) Summary of Proposed Rates Effective January 1, 2008 ($/GJ unless otherwise specified) Customer Class Commercial Transportation (RS23 Rates Effective October 1, 2007 2008 Revenue Requirement 2007 / 08 Gas Supply Cost Change Proposed Rates January 1, 2008 Rate Changes Monthly Fixed Charge $125.00 $125.00 $0.00 Delivery Charge 0.884 0.154 1.038 0.154 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Subtotal Delivery 0.899 0.154 (0.023) 1.030 0.131 Small Industrial (RS4 Monthly Fixed Charge $410.00 $410.00 $0.00 Delivery Charge 0.963 0.090 1.053 0.090 Company Use 0.091 (0.008) 0.083 (0.008) GCVA Co. Use Rider (0.076) (0.015) (0.091) (0.015) Subtotal Delivery 0.978 0.090 (0.023) 1.045 0.067 Gas Supply Demand 0.010 0.012 0.022 0.012 Gas Supply Commodity 7.146 0.074 7.220 0.074 GCVA Commodity Rider (0.307) - (0.307) - Subtotal Commodity 6.849 0.000 0.086 6.935 0.086 Total 7.827 0.090 0.063 7.979 0.153 Rate Schedules-08.xls DC
Tab Rates Page 6 (Fort St. John/Dawson Creek Division) Bill Comparison October 2007 to January 2008 FORT ST. JOHN AREA Permanent Rates Annual Bill Proposed Rates Annual Bill Annual Bill Customer Classification Oct. 1, 2007 Estimate Jan. 1, 2008 Estimate Difference Annual Use $ / GJ $ $ / GJ $ $ % Residential: 119.4 GJ Monthly Fixed Charge @ 7.00 / mo. 0.703 84.00 0.703 84.00 0.00 Delivery Charge 2.291 273.59 2.533 302.50 28.91 GCVA Co. Use Rider (0.076) (9.08) (0.091) (10.87) (1.79) RSAM Rider 0.137 16.36 0.103 12.25 (4.11) 364.88 387.88 23.01 6.3% Gas Supply Charge 7.809 932.55 7.482 893.50 (39.05) GCVA Rider (0.307) (36.69) (0.307) (36.69) (0.00) 895.87 856.81 (39.06) -4.4% $10.557 /GJ $1,260.75 $10.423 /GJ $1,244.69 ($16.05) -1.3% Small Commercial: 527.5 GJ Monthly Fixed Charge @ 7.00 / mo. 0.159 84.00 0.159 84.00 0.00 Delivery Charge 2.054 1,083.49 2.218 1,170.00 86.51 GCVA Co. Use Rider (0.076) (40.09) (0.091) (48.00) -7.91 RSAM Rider 0.137 72.27 0.103 54.12 (18.15) 1,199.66 1,260.12 60.46 5.0% Gas Supply Charge 7.784 4,106.06 7.471 3,940.95 (165.11) GCVA Rider (0.307) (162.05) (0.307) (162.05) (0.00) 3,944.01 3,778.90 (165.11) -4.2% $9.751 /GJ $5,143.67 $9.553 /GJ $5,039.02 ($104.65) -2.0% Billcomparisons-08.xls FSJ Bill Comp
Tab Rates Page 7 (Fort St. John/Dawson Creek Division) Bill Comparison October 2007 to January 2008 DAWSON CREEK AREA Permanent Rates Annual Bill Proposed Rates Annual Bill Annual Bill Customer Classification Oct. 1, 2007 Estimate Jan. 1, 2008 Estimate Difference Annual Use $ / GJ $ $ / GJ $ $ % Residential: 120.7 GJ Monthly Fixed Charge @ 7.00 / mo. 0.696 84.00 0.696 84.00 0.00 Delivery Charge 2.093 252.72 2.335 281.95 29.23 GCVA Co. Use Rider (0.076) (9.18) (0.091) (10.99) (1.81) RSAM Rider 0.137 16.54 0.103 12.39 (4.15) Interim Rate Refund Rider 0.000 0.00 0.000 0.00 0.00 344.08 367.35 23.26 6.8% Gas Supply Charge 7.809 942.90 7.482 903.41 (39.49) GCVA Rider (0.307) (37.09) (0.307) (37.09) 0.00 905.80 866.32 (39.48) -4.4% $10.351 /GJ $1,249.89 $10.217 /GJ $1,233.67 ($16.22) -1.3% Small Commercial: 599.9 GJ Monthly Fixed Charge @ 7.00 / mo. 0.140 84.00 0.140 84.00 0.00 Delivery Charge 1.517 910.05 1.681 1,008.44 98.39 GCVA Co. Use Rider (0.076) (45.59) (0.091) (54.59) (9.00) RSAM Rider 0.137 82.19 0.103 61.55 (20.64) 1,030.64 1,099.39 68.75 6.7% Gas Supply Charge 7.784 4,669.62 7.471 4,481.85 (187.77) GCVA Rider (0.307) (184.29) (0.307) (184.29) 0.00 4,485.33 4,297.56 (187.77) -4.2% $9.195 /GJ $5,515.97 $8.996 /GJ $5,396.96 ($119.02) -2.2% Billcomparisons-08.xls DC Bill Comp
Tab Rates Page 8 (Fort St. John/Dawson Creek Division) Bill Comparison October 2007 to January 2008 Average of Fort St. John and Dawson Creek Permanent Rates Annual Bill Proposed Rates Annual Bill Annual Bill Customer Classification Oct. 1, 2007 Estimate Jan. 1, 2008 Estimate Difference Annual Use $ / GJ $ $ / GJ $ $ % Residential: 120.1 GJ Monthly Fixed Charge @ 7.00 / mo. 0.700 84.00 0.700 84.00 0.00 Delivery Charge 2.192 263.22 2.434 292.29 29.07 GCVA Co. Use Rider (0.076) (9.13) (0.091) (10.93) (1.80) RSAM Rider 0.137 16.45 0.103 12.32 (4.13) 354.55 377.68 23.14 6.5% Gas Supply Charge 7.809 937.73 7.482 898.46 (39.27) GCVA Rider (0.307) (36.89) (0.307) (36.89) (0.00) 900.84 861.57 (39.27) -4.4% $10.454 /GJ $1,255.38 $10.320 /GJ $1,239.25 ($16.13) -1.3% Small Commercial: 563.7 GJ Monthly Fixed Charge @ 7.00 / mo. 0.149 84.00 0.149 84.00 0.00 Delivery Charge 1.786 1,006.49 1.950 1,098.94 92.45 GCVA Co. Use Rider (0.076) (42.84) (0.091) (51.30) -8.46 RSAM Rider 0.137 77.23 0.103 57.83 (19.40) 1,124.87 1,189.47 64.60 5.7% Gas Supply Charge 7.784 4,387.84 7.471 4,211.40 (176.44) GCVA Rider (0.307) (173.17) (0.307) (173.17) (0.00) 4,214.67 4,038.23 (176.44) -4.2% $9.472 /GJ $5,339.54 $9.274 /GJ $5,227.70 ($111.84) -2.1% Note: This bill comparison is the average of the uses per account and rates that apply to each of the Fort St. John and Dawson Creek delivery areas. Billcomparisons-08.xls FSJDC Bill Comp
Tab Rates Page 9 (Fort St. John/Dawson Creek Division) SUMMARY OF GAS DELIVERY CHARGE PROPOSED RATE CHANGES EFFECTIVE JANUARY 1, 2008 2008 2008 Allocation of Rate Changes Test Year Gross Revenue for Revenue Customer Classification Gas Deliveries Margin Sufficiency Deficiency (GJ) ($) ($) ($/GJ) Residential (RS1) 1 704 973 4,961,265 426,361 0.250 Commercial Small Commercial (RS2) 1 204 454 2,410,779 207,178 0.172 Large Commercial Firm (RS3) 232 600 353,159 30,350 0.130 Commercial Transportation (RS23) 139 965 251,393 21,604 0.154 Total Commercial 1 577 019 3,015,331 259,132 Small Industrial Sales (RS4) 210 205 219,133 18,832 0.090 Total Sales 3 492 197 8,195,729 704,325 Industrial Transport RS6 474 000 500,363 43,000 0.0907 RS7 260 000 103,028 8,854 0.0341 RS9 70 000 131,691 11,317 0.1617 RS10 428 000 348,105 29,915 0.0699 RS11 85 000 56,835 4,884 0.0575 Total Transport 1 317 000 1,140,022 97,971 TOTAL 4 809 197 9 335 751 802,296
Tab Rates Page 10 (Fort St. John/Dawson Creek Division) SUMMARY OF REVENUE, COST OF GAS, GROSS MARGIN EFFECTIVE JANUARY 1, 2008 2008 Test Year Cost of Gross Customer Classification Gas Deliveries Revenue Gas Margin (GJ) ($) ($) ($) Residential (RS1) 1 704 973 17 717 852 12 756 587 4,961,265 Commercial Small Commercial (RS2) 1 204 454 11 409 240 8 998 461 2,410,779 Large Commercial Firm (RS3) 232 600 2 064 163 1 711 004 353,159 Commercial Transportation (RS23) 139 965 251 393 0 251,393 Total Commercial 1 577 019 13 724 796 10 709 465 3,015,331 Small Industrial Sales (RS4) 210 205 1 741 438 1 522 305 219,133 Total Sales 3 492 197 33 184 086 24 988 357 8 195 729 Industrial Transport RS6 474 000 500 363 0 500,363 RS7 260 000 103 028 0 103,028 RS9 70 000 131 691 0 131,691 RS10 428 000 348 105 0 348,105 RS11 85 000 56 835 0 56,835 Total Industrial Transport 1 317 000 1 140 022 0 1 140 022 TOTAL 4 809 197 34,324,108 24 988 357 9 335 751
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 Tab Rates Page 11 Derivation of Test Year Forecast Gas Deliveries FORT ST. JOHN Test Year 2008 Estimated Test Year Test Year Average Test Year Customer Count Effective Customer Weighted Average Use Per Account Deliveries Customer Classification At Dec. 31st, 2007 Additions Customer Count (GJ) (GJ) Sales: Residential (Rate 1 ) 8,895 77 8,972 119.4 1,071,480 Commercial Small Commercial (Rate 2) 1,441 6 1,447 527.5 763,486 Large Commercial Firm (Rate 3) 118,998 Commercial Transportation (RS23) 72,140 Small Industrial Sales (RS4) 167,995 Subtotal Sales 2,194,099 Industrial Transport 2008 Test Year Gas Sales (GJ) RS6 474,000 RS7 260,000 RS9 70,000 RS10 428,000 RS11 85,000 Subtotal Transport 1,317,000 Total 3,511,099 DAWSON CREEK Test Year 2008 Test Year Test Year Average Test Year Customer Count Effective Customer Weighted Average Use Per Account Deliveries Customer Classification At Dec. 31st, 2007 Additions Customer Count (GJ) (GJ) Sales: Residential (Rate 1 ) 5,226 19 5,245 120.7 633,493 Commercial Small Commercial (Rate 2) 733 2 735 599.9 440,968 Large Commercial Firm (Rate 3) 113,600 Commercial Transportation (RS23) 67,825 Total Commercial 622,393 Small Industrial Sales (RS4) 42,210 Total 1,298,096
(Fort St. John/Dawson Creek Division) Summary of Test Year Gas Sales Supporting Schedule Updated Nov. 23'07 Tab Rates Page 12 Test Year 2008 Test Year Test Year Average Test Year Customer Count + Effective Customer = Weighted Average x Use Per Account = Deliveries Customer Classification At Dec. 31st, 2007 Additions Customer Count (GJ) (GJ) Sales: Residential (Rate 1 ) 14,121 96 14,217 119.9 1,704,973 Commercial Small Commercial (Rate 2) 2,174 8 2,182 552.0 1,204,454 Large Commercial Firm (Rate 3) 232,598 Commercial Transportation (RS23) 139,965 Total Commercial 1,577,017 Small Industrial Sales (RS4) 210,205 Subtotal Sales 3,492,195 Transport 2008 Test Year Gas Sales (GJ) RS6 474,000 RS7 260,000 RS9 70,000 RS10 428,000 RS11 85,000 Subtotal Transport 1,317,000 Total 4,809,195
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 Tab Rates Page 12 Derivation of Test Year Forecast Gross Margin 2008 Current Weighted Total Fort St. John Test Year Delivery Avg. Delivery Test Year Deliveries Charge Delivery Customer Current Fixed Charge & Fixed Charge Gross Customer Classification (GJ) $ / GJ Margin Count Fixed Charge Margin Margin Margin Sales: Residential (Rate 1 ) 1,071,480 2.283 2,446,189 8,972 * 7.00 753,648 3,199,837 3,199,837 Commercial Small Commercial (Rate 2) 763,486 2.046 1,562,092 1,447 7.00 121,548 1,683,640 1,683,640 Large Commercial (Rate 3) 118,998 1.577 187,660 14 150.00 25,200 212,860 212,860 Commercial Transport (Rate 23) 72,140 1.515 109,292 26 125.00 39,000 148,292 148,292 Total Commercial 954,624 1,859,044 1,487 185,748 2,044,792 2,044,792 Small Industrial (Rate 4) 167,995 0.778 130,700 7 410.00 34,440 165,140 165,140 Subtotal Sales 2,194,099 4,435,933 973,836 5,409,769 5,409,769 Transportation: 2008 Current Weighted Total Test Year Delivery Avg. Delivery Test Year Deliveries Charge Delivery Customer Current Fixed Charge & Fixed Charge Gross (GJ) $ / GJ Margin Count Fixed Charge Margin Margin Margin Rate 6 474,000 0.9622 456,083 9 410.00 44,280 500,363 500,363 Rate 7 260,000 0.2578 67,028 1 3,000.00 36,000 103,028 103,028 Rate 9 70,000 0.4161 29,127 1 8,547.04 102,564 131,691 131,691 Rate 10 428,000 0.2059 88,125 7 3,095.00 259,980 348,105 348,105 Rate 11 85,000 0.2317 19,695 1 3,095.00 37,140 56,835 56,835 Subtotal Transportation 1,317,000 660,058 479,964 1,140,022 1,140,022 Total Fort St. John 3,511,099 5,095,991 1,453,800 6,549,791 6,549,791 2008 Current Weighted Total Dawson Creek Test Year Delivery Avg. Delivery Test Year Deliveries Charge Delivery Customer Current Fixed Charge & Fixed Charge Gross Customer Classification (GJ) $ / GJ Margin Count Fixed Charge Margin Margin Margin Sales: Residential (Rate 1 ) 633,493 2.085 1,320,833 5,245 7.00 440,580 1,761,413 1,761,413 Commercial Small Commercial (Rate 2) 440,968 1.509 665,421 735 7.00 61,740 727,161 727,161 Large Commercial (Rate 3) 113,600 1.029 116,894 13 150.00 23,400 140,294 140,294 Commercial Transport (Rate 23) 67,825 0.967 65,587 25 125.00 37,500 103,087 103,087 Total Commercial 622,393 847,902 773 122,640 970,542 970,542 Small Industrial (Rate 4) 42,210 1.046 44,152 2 410.00 9,840 53,992 53,992 Subtotal Sales 1,298,096 2,212,886 573,060 2,785,946 2,785,946 Total Dawson Creek 1,298,096 2,212,886 573,060 2,785,946 2,785,946
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 Tab Rates Page 13 Derivation of Test Year Forecast Gross Margin 2008 Current Weighted Total FSJ / DC Combined Test Year Delivery Avg. Delivery Test Year Gas Sales Charge Delivery Customer Current Fixed Charge & Fixed Charge Gross Customer Classification (GJ) $ / GJ Margin Count Fixed Charge Margin Margin Margin Sales: Residential (Rate 1 ) 1,704,973 3,767,022 14,217 7.00 1,194,228 4,961,250 4,961,250 Commercial Small Commercial (Rate 2) 1,204,454 2,227,513 2,182 7.00 183,288 2,410,801 2,410,801 Large Commercial (Rate 3) 232,598 304,554 27 150.00 48,600 353,154 353,154 Commercial Transport (Rate 23) 139,965 174,879 51 125.00 76,500 251,379 251,379 Total Commercial 1,577,017 2,706,946 2,260 308,388 3,015,334 3,015,334 Small Industrial (Rate 4) 210,205 174,852 9 410.00 44,280 219,132 219,132 Subtotal Sales 3,492,195 6,648,820 1,546,896 8,195,716 8,195,716 Transportation: 2008 Current Weighted Total Test Year Delivery Avg. Delivery Test Year Gas Sales Charge Delivery Customer Current Fixed Charge & Fixed Charge Gross (GJ) $ / GJ Margin Count Fixed Charge Margin Margin Margin Rate 6 474,000 0.8712 456,083 9 410.00 44,280 500,363 500,363 Rate 7 260,000 0.1668 67,028 1 3,000.00 36,000 103,028 103,028 Rate 9 70,000 0.3331 29,127 1 8,547.04 102,564 131,691 131,691 Rate 10 428,000 0.1229 88,125 7 3,095.00 259,980 348,105 348,105 Rate 11 85,000 0.1487 19,695 1 3,095.00 37,140 56,835 56,835 Subtotal Transportation 1,317,000 660,058 479,964 1,140,022 1,140,022 Total Fort St. John / Dawson Creek 4,809,195 7,308,877 2,026,860 9,335,738 9,335,738
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 Tab Rates Page 14 Derivation of Test Year Forecast Gas Supply Cost 2008 Fort St. John Test Year Gas Cost Total Deliveries Charge Gas Cost Customer Classification (GJ) ($ / GJ) ($) Residential (Rate 1 ) 1,071,480 7.482 8,016,813 Commercial Small Commercial (Rate 2) 763,486 7.471 5,704,004 Large Commercial (Rate 3) 118,998 7.356 875,349 Total Commercial 882,484 6,579,353 Small Industrial (Rate 4) 167,995 7.242 1,216,620 Total Fort St. John 2,121,959 15,812,786 2008 Dawson Creek Test Year Gas Cost Total Deliveries Charge Gas Cost Customer Classification (GJ) ($ / GJ) ($) Residential (Rate 1 ) 633,493 7.482 4,739,795 Commercial Small Commercial (Rate 2) 440,968 7.471 3,294,472 Large Commercial (Rate 3) 113,600 7.356 835,642 Total Commercial 554,568 4,130,114 Small Industrial (Rate 4) 42,210 7.242 305,685 Total Dawson Creek 1,230,271 9,175,593
(Fort St. John / Dawson Creek Division) Updated Nov. 23'07 Tab Rates Page 15 Derivation of Test Year Forecast Gas Supply Cost 2008 FSJ / DC Combined Test Year Gas Cost Total Deliveries Charge Gas Cost Customer Classification (GJ) ($ / GJ) ($) Residential (Rate 1 ) 1,704,973 7.482 12,756,608 Commercial Small Commercial (Rate 2) 1,204,454 7.471 8,998,476 Large Commercial (Rate 3) 232,598 7.356 1,710,991 Total Commercial 1,437,052 10,709,467 Small Industrial (Rate 4) 210,205 7.242 1,522,305 Total Fort St. John / Dawson Creek 3,352,230 24,988,379
(Fort St. John/Dawson Creek Division) Determination of Gas Supply Cost Rate Changes Effective January 1, 2008 Using August 31, 2007 Forward Gas Strip Customer Classification Gas Supply Costs Rates Gas Supply Costs Proposed Rates Proposed Rate Changes Rates Effective October 1, 2007 Proposed Rates Effective January 1, 2008 Effective January 1, 2008 Company Company Company Demand Commodity Total Use Gas Demand Commodity Total Use Gas Demand Commodity Total Use Gas ($/GJ) ($/GJ) D&C ($/GJ) ($/GJ) ($/GJ) D&C ($/GJ) ($/GJ) ($/GJ) D&C ($/GJ) Residential (RS1) 0.025 7.784 7.809 0.091 0.053 7.429 7.482 0.083 0.028 ( 0.355) ( 0.327) ( 0.008) Small Commercial (RS2) 0.024 7.760 7.784 0.091 0.051 7.420 7.471 0.083 0.027 ( 0.340) ( 0.313) ( 0.008) Large Commercial (RS3) 0.024 7.524 7.548 0.091 0.052 7.304 7.356 0.083 0.028 ( 0.220) ( 0.192) ( 0.008) Small Industrial (RS4) 0.010 7.146 7.156 0.091 0.022 7.220 7.242 0.083 0.012 0.074 0.086 ( 0.008) Company Use 0.091 0.083 ( 0.008) Transportation Service 0.091 0.083 ( 0.008) FSJ-DC Retail Rate Changes FSJ-DC-08.xls
Tab Rates Page 17 (Fort St. John/Dawson Creek Division) ALLOCATION OF DEMAND CHARGES EFFECTIVE JANUARY 1, 2008 Peak Day Allocation of 2008 Annual Unit Demand Customer Classification Requirement Demand Charges Requirements Charge (GJ) (%) ($) (GJ) ($/GJ) Residential (RS1) 18 299 53.22% 90,176 1 704 973 0.053 Small Commercial (RS2) 12 396 36.05% 61,083 1 204 454 0.051 Large Commercial (RS3) 2 442 7.10% 12,030 232 598 0.052 Industrial Sales (RS4) 960 2.79% 4,727 210 205 0.022 Company Use Gas 287 0.83% 1,406 53 380 0.026 Total 34 384 100.0% 169,440 3 405 610 FSJ-DC-08.xls FSJ-DC Demand Chrg Allocation
Tab Rates Page 18 (Fort St. John/Dawson Creek Division) Determination of 2008 Unit Company Use Gas Cost Rate Using August 31, 2007 Forward Gas Strip Commodity Cost $385,281 B.C.S.S. Tax $12,248 Demand Cost $1,406 Total Co. Use Gas Cost $398,935 Total Company use gas requirement 53 380 GJ Deliveries 4 809 195 GJ 2008 Unit Company Use Gas Cost Rate $0.083 /GJ $398,935 4 809 195 Commodity Cost of Company Use Gas per GJ Purchased $7.218 /GJ $385,281 53 380 FSJ-DC-08.xls FSJ-DC Company Use
Tab Rates Page 19 (Fort St. John/Dawson Creek Division) Determination of 2008 Revenue Stabilization Adjustment Mechanism (RSAM) Rider Residential Small Commercial Total Actual RSAM Balance at Year-end 2006 $707,776 $492,043 $1,199,819 Estimated RSAM Recovery / Deferral in 2007 ($162,409) ($141,943) ($304,352) Estimated RSAM Balance at Year-end 2007 $545,367 $350,100 $895,467 Years of Amortization 3 3 3 RSAM Balance divided by 3 Equals Amortization $181,789 $116,700 $298,489 Forecast 2008 Deliveries 1,704,970 1,204,452 2,909,422 One Year of Amortization divided by 2008 Deliveries equals RSAM Rate Rider ($/GJ) 0.107 0.097 0.103 FSJ-DC-08.xls RSAM
Tab Rates Page 20 (Fort St. John/Dawson Creek Division) Forward Gas Price Strip August 31, 2007 STATION #2 AECO CDN$/GJ CDN$/GJ Jan-08 6.5589 6.5489 Feb-08 6.5739 6.5639 Mar-08 6.5939 6.5839 Apr-08 6.1645 6.2945 May-08 6.1865 6.3165 Jun-08 6.2713 6.4013 Jul-08 6.3641 6.4941 Aug-08 6.4364 6.5664 Sep-08 6.4803 6.6103 Oct-08 6.6030 6.7330 Nov-08 7.2417 7.2317 Dec-08 7.6986 7.6886 Average 6.5978 6.6694 FSJ-DC-08.xls Forward Gas Strip
Tab 1 Page 1 (Fort St. John/Dawson Creek Division) UTILITY INCOME & RETURN SCHEDULE 1 (000's) Line Test Year Decision Outlook No. 2008 2007 2007 Source 1 Energy sales (TJ) 3,352 3,403 3,337 Tab Rates, page 7 2 Average rate per GJ $10.03 $10.46 $10.16 3 4 Transportation service (TJ) 1,457 1,367 1,297 Tab Rates, page 7 5 Average rate per GJ $1.04 $0.96 $0.92 6 7 Total deliveries (TJ) 4,809 4,769 4,634 Tab Rates, page 7 8 9 Utility revenue 10 Energy sales $32,933 $35,524 $33,909 Tab Rates, page 10 11 Interim rates - sales 683 78 0 Tab Rates, page 9 12 Transportation service 1,391 1,300 1,187 Tab Rates, page 10 13 Interim rates - transportation 120 13 0 Tab Rates, page 9 14 15 35,126 36,914 35,097 16 Cost of sales 24,988 27,562 25,868 Tab Rates, page 10 & 15 17 18 Gross margin 10,138 9,352 9,229 19 20 Operating expenses 3,751 3,513 3,572 Tab 1, page 2, line 6 21 Maintenance expenses 290 270 267 Tab 1, page 2, line 10 22 Admin. & general expenses 1,264 1,207 1,218 Tab 1, page 2, line 16 23 Property taxes 958 887 887 Tab 1, page 6, line 4 24 Depreciation 1,349 1,308 1,321 Tab 2, page 6, line 49 25 Amortization (216) (297) (296) Tab 2, page 9, line 24 26 Investment income, other revenue (171) (177) (153) Tab 1, page 7, line 7 28 29 7,225 6,713 6,816 30 31 Earned return before income taxes 2,913 2,639 2,413 32 Income taxes 276 223 129 Tab 3, page 1, line 14 33 34 Earned return $2,637 $2,416 $2,284 35 36 Utility rate base $33,494 $31,966 $32,666 Tab 2, page 1, line 21 37 38 Return on rate base 7.87% 8.00% 6.99% Tab 5, page 1, line 23
Tab 1 Page 2 (Fort St. John/Dawson Creek Division) SUMMARY OF OPERATING, MAINTENANCE & ADMINISTRATIVE & GENERAL EXPENSES (000's) Line Test Year Decision Outlook No. Account and Description 2008 2007 2007 1 OPERATING EXPENSES 2 - wages $1,378 $1,283 $1,268 3 - gas 399 434 434 4 - transferred to capital (201) (193) (193) 5 - other 2,175 1,989 2,063 6 Total Operating 3,751 3,513 3,572 7 MAINTENANCE EXPENSES 8 - wages 108 95 95 9 - other 182 175 172 10 Total Maintenance 290 270 267 Error 11 ADMINISTRATIVE AND GENERAL EXPENSES 12 - wages - - - 13 - benefits 474 485 498 14 - transferred to capital (205) (215) (217) 15 - other 995 938 937 16 Total Admin & General 1,264 1,207 1,218 17 TOTAL EXPENSES $5,304 $4,991 $5,057
Tab 1 Page 3 (Fort St. John/Dawson Creek Division) OPERATING EXPENSES (000's) Line Test Year Decision Outlook No. Account and Description 2008 2007 2007 1 664 Communications $13 $13 $8 2 665 Pipelines 93 93 66 3 Pipelines - Gas 399 434 434 4 667 Regulating stations 108 100 102 5 Regulating stations - Gas - - - 6 Total transmission 613 639 610 7 670 Supervision 361 346 400 10 673 Removing & resetting meters 249 219 219 11 674 Service on customer premises 32 28 28 12 675 Mains and services 290 271 308 13 677 Regulating stations 17 11 14 14 679 Other - - - 15 Total distribution 949 875 969 16 684 Communications 1 1 2 17 685 General systems operations 246 228 222 Shared Services from Parent 406 334 334 18 688 Other general operations 470 450 450 18 689 Transferred to capital (201) (193) (193) 19 Total general 923 821 815 20 700 Sales supervision 13 12 7 21 701 Advertising - - 5 22 702 Demonstration and selling 1 1 1 23 709 Other 2 2 2 24 Total sales 16 16 15 25 711 Customer contracts 11 10 5 Shared Services from Parent 141 120 120 26 712 Meter reading 175 152 168 27 713 Customer billing 367 323 310 Shared Services from Parent 300 310 310 28 714 Credit and collections 18 15 17 Shared Services from Parent 82 80 80 29 718 Uncollectible accounts 156 153 153 30 Total customer accounting 1,250 1,163 1,163 31 Total operating $3,751 $3,513 $3,572
Tab 1 Page 4 (Fort St. John/Dawson Creek Division) MAINTENANCE EXPENSES (000's) Line Test Year Decision Outlook No. Account and Description 2008 2007 2007 1 864 Communications $1 $1 $1 2 865 Pipe lines 40 38 38 3 866 Compressors - - - 4 867 Regulating stations 67 41 41 5 Total transmission 108 81 81 6 872 Structures 2 2 3 7 875 Mains and services 102 112 133 8 877 Regulating stations 14 13 13 9 878 Meters 56 55 35 10 879 Other - - - 11 Total distribution 174 182 184 12 884 Communications 3 3 1 13 885 General 5 5 1 14 Total general 8 8 2 15 Total maintenance $290 $270 $267
Tab 1 Page 5 (Fort St. John/Dawson Creek Division) ADMINISTRATIVE AND GENERAL EXPENSES (000's) Line Test Year Decision Outlook No. Account and Description 2008 2007 2007 1 721 Administration $4 $2 $2 2 Shared Services from Parent 665 637 637 3 722 Audit, legal & consulting fees 58 28 28 4 723 Insurance 134 136 136 5 724 Reserve for damages - - - 6 725 Employee benefits 474 485 498 7 728 Shared Services from Parent 93 92 92 8 Regulation 36 36 36 9 Donations 5 6 6 10 729 Transferred to capital (205) (215) (217) 11 Total general and administrative $1,264 $1,207 $1,218
Tab 1 Page 6 (Fort St. John/Dawson Creek Division) TAXES OTHER THAN INCOME TAXES (000's) Line Test Year Decision Outlook No. Account and Description 2008 2007 2007 1 PROPERTY TAXES 2 Regular $698 $670 $670 3 1% in lieu 260 217 217 4 TOTAL $958 $887 $887
Tab 1 Page 7 (Fort St. John/Dawson Creek Division) MISCELLANEOUS OPERATING REVENUE (000's) Line Test Year Decision Outlook No. Description 2008 2007 2007 1 Penalty charges $110 $110 $101 2 Connection Fees 25 21 27 3 Rents - - - 4 Overheads recovered 23 22 21 5 Automotive surcharges 6 14-6 Other 7 11 4 7 $171 $177 $153
Tab 2 Page 1 (Fort St. John/Dawson Creek Division) UTILITY RATE BASE SCHEDULE 2 (000's) Line Test Year Decision Outlook No. 2008 2007 2007 Source 1 Plant in service beginning of year $61,263 $58,689 $58,689 Tab 2, page 3, line 46 2 Additions 2,549 2,625 2,862 Tab 2, page 3, line 46 3 Disposals (127) (61) (287) Tab 2, page 3, line 46 4 5 Plant in service end of year 63,685 61,253 61,263 6 Accumulated depreciation 24,378 23,000 22,801 Tab 2, page 6, line 43 7 8 Net plant in service end of year 39,307 38,253 38,462 9 10 Net plant beginning of year 38,462 37,274 37,273 Tab 2, pages 3 & 6, lines 46 & 43 11 12 Net plant in service midyear 38,885 37,763 37,868 14 Contributions for construction (7,010) (7,051) (7,092) Tab 2, page 16, line 13 15 Unamortized deferred charges 533 727 764 Tab 2, page 9, line 13 16 Deferred income taxes (553) (553) (553) 17 Reserve for damages (69) (69) (69) 18 Cash working capital 1,528 965 1,551 Tab 2, page 10, line 8 19 Other working capital 181 183 198 Tab 2, page 15, line 15 20 21 Utility rate base, midyear $33,494 $31,966 $32,666
Tab 2 Page 2 Fort St. John / Dawson Creek Division GAS PLANT IN SERVICE - 2007 Actual 2006 Line Description Balance ($ 000's) Forecast Forecast Ending Additions (incl O/H) Allocations Transfers Retirements Balance 1 Transmission plant 2 460 Land 11 11 3 461 Land rights 81 81 4 462 Compressor structures 465 465 5 463 Regulating structures 146 146 6 465 Mains 6,050 1 6,052 7 466 Compressor equipment 8 467 Regulating equipment 2,871 399 89 3,359 9 468 Communications 130 130 10 469 Other 18 18 11 9,773 400 90 10,263 12 Distribution plant 13 470 Land 37 37 14 471 Land rights 222 222 15 472 Structures 1,083 107 39 1,229 16 473 Services 13,698 245 70 14,013 17 474 House installations 4,272 38 19 4,329 18 475 Mains 20,889 1,056 323 22,269 19 476 Compressor equipment 20 477 Regulating equipment 1,339 85 1,424 21 478 Meters 1,851 76 1,927 22 479 Other 20 20 23 43,412 1,606 451 45,469 24 General plant 25 480 Land 77 77 26 481 Land rights 1 1 27 482 Structures 1,196 1,196 28 483 Office equipment 272 4 276 29 484 Transportation equipment 1,079 122 (287) 914 30 485 Heavy work equipment 592 138 730 31 486 Tools 1,018 51 1,069 32 487Computer equipment 973 973 33 488 Communications 299 299 38 489 Other (4) (4) 39 5,503 315 (287) 5,531 40 Construction overheads 41 Unallocated construction costs 43 (43) 42 System operations transfers 209 (209) 43 Administrative transfers 215 (215) 44 Depreciation 73 (73) 45 540 (540) 46 58,689 2,862 () (287) 61,263
Tab 2 Page 3 (Fort St. John/Dawson Creek Division) GAS PLANT IN SERVICE - TEST YEAR 2008 ($ 000's) Forecast Forecast Forecast Ending Line Description Balance Additions Allocations Retirements Balance 1 Transmission plant 2 460 Land 11 11 3 461 Land rights 81 81 4 462 Compressor structures 465 465 5 463 Regulating structures 146 146 6 465 Mains 6,052 6,052 7 466 Compressor equipment - 8 467 Regulating equipment 3,359 310 71 3,740 9 468 Communications 130 130 10 469 Other 18 18 11 10,263 310 71 10,644 12 Distribution plant 13 470 Land 37 37 14 471 Land rights 222 222 15 472 Structures 1,229 172 84 1,485 16 473 Services 14,013 242 76 14,331 17 474 House installations 4,329 39 23 4,391 18 475 Mains 22,269 746 253 23,268 19 476 Compressor equipment 0 0 20 477 Regulating equipment 1,424 109 21 1,555 21 478 Meters 1,927 90 2,017 22 479 Other 20 20 23 45,469 1,399 457 47,325 24 General plant 25 480 Land 77 77 26 481 Land rights 1 1 27 482 Structures 1,196 1,196 28 483 Office equipment 276 10 286 29 484 Transportation equipment 914 255 (127) 1,042 30 485 Heavy work equipment 730-730 31 486 Tools 1,069 46 1,116 32 487 Computer equipment 973 973 33 488 Communications 299 299 38 489 Other (4) (4) 39 5,531 312 (127) 5,716 40 Construction overheads 41 Unallocated construction costs 43 (43) 42 System operations transfers 201 (201) 43 Administrative transfers 205 (205) 44 Depreciation 79 (79) 45 528 (528) 46 61,263 2,549 () (127) 63,685
Tab 2 Page 4 Pacific Northern Gas (NE) Ltd. Fort St. John / Dawson Creek GAS PLANT IN SERVICE - CONTINUITY OF PLANT COST (000's) Test Year Forecast Line Description 2008 2007 1 Balance, Beginning of Year 61,263 58,689 2 CIAC Balance, Beginning of Year (11,300) (11,144) 3 Plant Cost, net of CIAC, Beginning of Year 49,963 47,545 4 Additions during year: 5 Plant Cost 2,021 2,332 6 Allocation of overheads 528 530 7 Total Plant Additions 2,549 2,862 8 Contributions in Aid of Construction (182) (157) 9 Total Additions 2,367 2,705 10 Plant Retirements: 11 Normal Course (127) (287) 12 Deactivated Assets - 13 CIAC Retirements - - 14 Total Retirements (127) (287) 15 Balance, End of Year 52,203 49,963 16 Closing balance consists of: 17 Plant Cost 63,685 61,263 18 CIAC (11,482) (11,300) 19 Balance, End of Year 52,203 49,963
Tab 2 Page 5 Line Description Rate Fort St. John / Dawson Creek Division CONTINUITY OF ACCUMULATED DEPRECIATION FOR THE YEAR 2007 ($ 000's) Forecast Actual 2006 Balance Provision Transfers Retirements Recoveries Depreciation Adjustment Forecast '07 Ending Balance 1 Gathering Plant 2 Franchises & Consents 1.00% () () 3 Gas Holders - Manufacturing 1.00% (9) (9) 4 Gas Holders - Storage (4) (4) 5 6 (13) (13) 7 Transmission plant 8 461 Land rights 3.59% (47) (3) (50) 9 462 Compressor structures 3.00% (115) (14) (129) 10 463 Regulating structures 3.00% (30) (4) (35) 11 465 Mains 2.78% (3,094) (168) (3,262) 12 466 Compressor equipment N/A 13 467 Regulating equipment 3.44% (1,211) (99) (1,310) 14 468 Communications 5.00% (79) (6) (85) 15 469 Other 3.00% (2) (1) (3) 16 17 (4,578) (295) (4,874) 18 Distribution plant 19 471 Land Rights 0.72% (16) (2) (17) 20 472 Structures 3.00% (202) (32) (234) 21 473 Services 2.04% (3,093) (279) (3,372) 22 474 House installations 2.86% (1,505) (122) (1,627) 23 475 Mains 2.44% (7,777) (509) (8,286) 24 476 Compressor equipment 0.00% () () () 25 477 Regulating equipment 3.10% (757) (42) (798) 26 478 Meters 3.00% (498) (56) (554) 27 479 Other 3.00% (5) (1) (5) 28 29 (13,851) (1,042) (14,894) 30 31 General plant 32 481 Land Rights () () () 33 482 Structures 3.00% (557) (36) (593) 34 483 Office equipment 3.04% (225) (8) (234) 35 484 Transportation equipment 12.84% (704) (139) 287 (23) (579) 36 485 Heavy work equipment 4.98% (211) (29) (240) 37 486 Tools 4.51% (456) (46) (502) 38 487 Computer equipment 4.15% (652) (40) (692) 39 488 Communications 4.59% (170) (14) (183) 40 489 Other 3.00% 3 3 41 (2,972) (312) 287 (23) (3,021) 42 43 (21,415) (1,650) 287 (23) (22,801) 44 45 Amortization of CIAC 252 46 47 Depreciation capitalized 76 48 49 Net Depreciation Expense (1,321)
Tab 2 Page 6 (Fort St. John/Dawson Creek Division) CONTINUITY OF ACCUMULATED DEPRECIATION TEST YEAR 2008 ($ 000's) Forecast Line Description Rate Balance Provision Retirements Recoveries Forecast '08 Ending Balance 1 Gathering Plant 2 Franchises & Consents 1.00% () () 3 Gas Holders - Manufacturing 1.00% (9) (9) 4 Gas Holders - Storage (4) (4) 5 6 (13) (13) 7 Transmission plant 8 461 Land rights 3.59% (50) (3) (53) 9 462 Compressor structures 3.00% (129) (14) (143) 10 463 Regulating structures 3.00% (35) (4) (39) 11 465 Mains 2.78% (3,262) (168) (3,430) 12 466 Compressor equipment N/A 13 467 Regulating equipment 3.44% (1,310) (116) (1,425) 14 468 Communications 5.00% (85) (6) (92) 15 469 Other 3.00% (3) (1) (3) 16 17 (4,874) (312) (5,186) 18 Distribution plant 19 471 Land Rights 7.19% (17) (16) (33) 20 472 Structures 7.53% (234) (93) (327) 21 473 Services 2.08% (3,372) (292) (3,663) 22 474 House installations 3.67% (1,627) (159) (1,786) 23 475 Mains 1.93% (8,286) (430) (8,716) 24 476 Compressor equipment 4438.36% () (14) (14) 25 477 Regulating equipment 3.37% (798) (48) (846) 26 478 Meters 2.07% (554) (40) (594) 27 479 Other 3.00% (5) (1) (6) 28 29 (14,894) (1,092) (15,986) 30 31 General plant 32 481 Land Rights () () () 33 482 Structures 3.00% (593) (36) (629) 34 483 Office equipment 1.18% (234) (3) (237) 35 484 Transportation equipment 11.82% (579) (108) 127 (25) (585) 36 485 Heavy work equipment 4.99% (240) (36) (277) 37 486 Tools 4.54% (502) (48) (550) 38 487 Computer equipment 2.92% (692) (28) (721) 39 488 Communications 4.78% (183) (14) (197) 40 489 Other 3.00% 3 3 41 (3,021) (275) 127 (25) (3,194) 42 43 (22,801) (1,679) 127 (25) (24,378) 44 45 Amortization of CIAC 22,778 251 46 47 Depreciation capitalized 79 48 49 Net Depreciation Expense (1,349)
Tab 2 Page 7 Pacific Northern Gas (NE) Ltd. Fort St. John / Dawson Creek GAS PLANT IN SERVICE - CONTINUITY OF ACCUMULATED DEPRECIATION (000's) Test Year Forecast Line Description 2008 2007 1 Balance, Beginning of Year (22,801) (21,415) 2 3 CIAC Accumulated Balance, Beginning of Year 4,255 4,004 Utility Accumulated Depreciation, Beginning of Year (18,546) (17,412) 4 Depreciation Provision: 5 Plant (1,679) (1,650) 6 Contributions in Aid of Construction 251 252 7 Depreciation Adjustment Deferral 8 Total Additions (1,428) (1,398) 9 Plant Retirements: 10 Normal Course 127 287 11 Deactivated Assets 12 CIAC Retirements 13 Removal Costs 14 Proceeds on Disposals (25) (23) 15 Total Retirements 102 264 16 Balance, End of Year (19,872) (18,546) 17 Closing Balance Consists of: 18 Accumulated Depreciation - Plant (24,379) (22,801) 19 Accumulated Amortization - CIAC 4,506 4,255 20 Balance, End of Year (19,872) (18,546)
Tab 2 Page 8 (Fort St. John/Dawson Creek Division) CONTINUITY OF DEFERRED CHARGES YEAR 2007 (000's) Actual Line Description Balance '06 Additions Tax Amortization Balance '07 1 Rate base items 2 Property tax variance 4 (4) 1 4 (2) 3 BCUC Hearing costs (1) 14 (5) 9 (1) 4 Contribution to WEI Taylor 56 0 0 28 28 5 Studies 0 0 0 0 0 6 RSAM 789 (304) 104 0 588 7 DC Industrial Deliveries 26 28 (10) 26 19 8 Resource Plans 1 0 0 1 (0) 9 Bill 198 Compliance Costs 13 4 (1) 4 11 10 11 888 (262) 89 72 643 12 13 Average rate base for the year $765 14 15 Interest bearing deferrals 16 BCUC Fees (10) (9) 3 (10) (6) 17 Short Term Interest Rate deferral (117) 21 (9) (82) (23) 18 Long Term Interest Rate deferral 34 23 (7) 17 33 19 Depreciation Adjustment (556) (23) - (294) (285) 20 GCVA (1,088) 658 (237) 0 (667) 21 22 (1,737) 670 (250) (369) (949) 23 24 Total deferrals (excl. debt issue) ($849) $408 ($160) ($296) ($306) 25 26 27 Debt Issue Costs 97 488 0 50 $535
Tab 2 Page 9 (Fort St. John/Dawson Creek Division) CONTINUITY OF DEFERRED CHARGES TEST YEAR 2008 (000's) Forecast Line Description Balance '07 Additions Tax Amortization Balance '08 1 Rate base items 2 Property tax variance (2) 0 0 (2) (0) 3 BCUC Hearing costs (1) 12 (4) 7 0 4 Contribution to WEI Taylor 28 0 0 28 (0) 5 Studies 0 0 0 0 0 6 RSAM 588 (262) 82 0 409 7 DC Industrial Deliveries 19 0 0 19 0 8 Resource Plans (0) 0 0 0 (0) 9 Bill 198 Compliance Costs 11 12 (4) 6 14 10 11 643 (238) 75 57 422 12 13 Average rate base for the year $533 14 15 Interest bearing deferrals 16 BCUC Fees (6) (0) 0 (6) (0) 17 Short Term Interest Rate deferral (23) 17 (6) 12 (23) 18 Long Term Interest Rate deferral 33 2 0 16 18 19 Depreciation Adjustment (285) (9) 0 (295) 0 20 GCVA (667) 1,471 (462) 0 342 21 22 (949) 1,480 (468) (273) 336 23 24 Total deferrals (excl. debt issue) ($306) $1,242 ($393) ($215) $758 25 26 27 Debt Issue Costs $535 $0 $0 $96 $438
Tab 2 Page 10 (Fort St. John/Dawson Creek Division) CASH WORKING CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2008 ($000's) Line Lag /(Lead) Working No. Description Days Expense Capital 1 Revenue 58.3 2 Expense (39.8) 3 Operating working capital 18.4 32,201 $1,627 4 Adjustments: 5 Budget Billing Plan ($195) 6 Provincial Sales Tax & ICEF Levy ($2) 7 Goods and Services Tax $98 8 Cash working capital $1,528
Tab 2 Page 11 (Fort St. John/Dawson Creek Division) REVENUE LAG DAYS FOR THE YEAR ENDED DECEMBER 31, 2008 ($000's) Revenue Line Lag Extended No. Revenues Days Revenue Revenue 1 Residential - monthly 47.4 $5,810 $275,266 2 - bimonthly 63.7 11,908 758,871 3 4 Small commercial - monthly 61.7 1,763 108,713 5 - bimonthly 63.6 9,646 613,807 6 7 Large commercial - firm 45.8 2,316 106,101 8 9 Small industrial 47.9 2,881 138,083 10 11 Revenue Deficiency 58.3 802 46,768 12 13 Other operating revenue 58.3 171 9,956 14 15 Average revenue lag days 58.3 $35,297 $2,057,565
Tab 2 Page 12 (Fort St. John/Dawson Creek Division) EXPENSE LEAD DAYS FOR THE YEAR ENDED DECEMBER 31, 2008 ($000's) Expense Line (Lead) Normalized Extended No. Expenses Days Expenses Expenses 1 Gas purchases-baseload (40.2) $279 ($11,213) 2 Gas purchases-seasonal (40.2) 25,108 (1,009,357) 3 Operating payrolls (5.0) 1,486 (7,428) 4 Employee benefits (20.9) 474 (9,914) 5 Uncollectible accounts (59.2) 156 (9,246) 6 Other operating expenses (31.4) 3,061 (96,121) 7 Expenses credited/capitalized (10.6) (406) 4,281 8 Insurance 182.5 134 24,428 9 Property taxes (1.0) 958 (958) 10 Franchise Fees (242.5) 674 (163,445) 11 Income taxes payable (15.2) 276 (4,197) 12 Average expense lag days (39.8) $32,201 ($1,283,169)