In this direction:
Act means the Utilities Commission Act;
deemed equity means, for any fiscal year, the product obtained by multiplying the rate base relating to that year by 30%;
distributable surplus has the same meaning as in Heritage Special Directive No. HC1 to the British Columbia Hydro and Power Authority;
DSM regulatory account means the regulatory account of the authority established under commission order G-55-95;
F2020 means the authority's fiscal year commencing April 1, 2019 and ending March 31, 2020;
F2021 means the authority's fiscal year commencing April 1, 2020 and ending March 31, 2021;
F2022 means the authority's fiscal year commencing April 1, 2021 and ending March 31, 2022;
F2023 means the authority's fiscal year commencing April 1, 2022 and ending March 31, 2023;
F2024 means the authority's fiscal year commencing April 1, 2023 and ending March 31, 2024;
F2025 means the authority's fiscal year commencing April 1, 2024 and ending March 31, 2025;
F2026 means the authority's fiscal year commencing April 1, 2025 and ending March 31, 2026;
F2027 means the authority's fiscal year commencing April 1, 2026 and ending March 31, 2027;
rate base means, in relation to a fiscal year of the authority, the amount determined in accordance with the following equation and notes:
rate smoothing regulatory account means the rate smoothing regulatory account approved by commission order G-48-14;
trade income has the meaning given to it in section 1.1;
trade income deferral account means the regulatory account established under commission order G-96-04 and the approval in section 4.6 of the reasons that accompany that order;
transfer pricing agreement means the energy supply contract effective April 1, 2020 between the authority and Powerex Corp., as amended from time to time.
Trade income for a fiscal year is the greater of the following:
the amount equal to the authority's consolidated net income for the fiscal year after adjusting that income in accordance with subsection (2);
zero.
For the purposes of subsection (1) (a), the authority's consolidated net income must be adjusted as follows:
by subtracting the authority's net income for the fiscal year;
by subtracting the net income for the fiscal year of every subsidiary of the authority other than Powerex Corp.;
by subtracting any foreign currency translation gains in the fiscal year on intercompany balances between the authority and Powerex Corp.;
by adding any foreign currency translation losses in the fiscal year on intercompany balances between the authority and Powerex Corp.
This direction is issued to the commission under section 3 of the Act.
In regulating and setting rates for the authority for F2020, F2021, F2022, F2023, F2024, F2025, F2026 and F2027, the commission must ensure that those rates allow the authority to collect sufficient revenue in each fiscal year to enable the authority to achieve an annual rate of return on deemed equity that would yield a distributable surplus of $712 million.
In setting rates for the authority, the commission must not disallow for any reason the recovery in rates of the balance of the authority's regulatory accounts as at March 31, 2019 and the costs incurred by the authority with respect to the following:
the construction of extensions to the authority's plant or system that came into service before April 1, 2016;
energy supply contracts entered into before April 1, 2016;
debt servicing costs on amounts borrowed in relation to the rate smoothing regulatory account.
Subsection (1) (c) does not limit the power of the commission to allow the recovery in rates of debt servicing costs related to the authority's regulatory accounts not referred to in that subsection.
In setting rates for the authority for a fiscal year, the commission must subtract from the costs to be recovered in rates an amount equal to the net incomes, for the fiscal year, of Powerex Corp. and Powertech Labs Inc.
For the purposes of subsection (3),
the net income of Powerex Corp. for the fiscal year is the amount equal to the trade income forecast by the authority for that fiscal year, and
the net income of Powertech Labs Inc. for the fiscal year is the amount forecast by the authority.
In setting rates for the authority for F2020 and F2021, the commission must not set rates for the purpose of changing the revenue-cost ratio for a class of customers.
The commission must not comply with section 4 (5) of the Clean Energy Act when setting rates for the authority for F2020 and F2021.
Except on application by the authority, the commission must not set rates for the authority that would result in the direct or indirect provision of unbundled transmission services to retail customers in British Columbia, or to those who supply such customers.
The commission may not exercise any power or perform any duty under Part 3 of the Act in regard to Powerex Corp.
In regulating and setting rates for the authority, the commission must allow the authority to continue to defer to the trade income deferral account the variances between actual and forecast trade income.
The commission may not exercise its powers under section 71 (1) (b) and (3) of the Act in respect of the transfer pricing agreement.