B-11 GAZ MÉTRO RESPONSE TO
IR No 2 from La Régie
(Gaz Métro - 1 Document 1.59 - 1.68, 2.72, 2.73, 2.35 revised)
(ENGLISH TRANSLATION)
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
References:
(i)
(ii)
(iii)
(iv)
Gaz Métro-1, Document 1, page 16, lines 7 to 12
Gaz Métro-1, Document 1, page 16, lines 20 to 22
Gaz Métro-1, Document 1.9, answer 1.9, scenario 2
Gaz Métro-1, Document 1.12, pages 2 and 3
Preamble:
Reference (i)
“2.2.2 Costs of category B - Costs of the existing distribution system
[...]
Gaz Métro thus proposes that the costs associated with the transmission function of the distribution system
continue to be billed only to the existing customers when the natural gas injected by the producers is
consumed inside the territory. Gaz Métro also proposes that expenses for use of these Gaz Métro
transmission system be billed to the producers when the natural gas is intended for use outside the territory.”
Reference (ii)
“2.2.3 Costs of category C - Distribution costs not related to the gas system
The arrival of a new category of customers has led Gaz Métro to evaluate which distribution costs not related
to the gas system should be allocated to the producers and in what proportion.”
Reference (iii)
Table of functionalization and classification - 2008/2009 budget used to determine the costs of the category C.
Reference (iv)
Page 2 - Table of the costs related to the rate base
Page 3 - Table of the costs for category B
Question:
1.1
Please indicate which are the criteria which make it possible to categorize the costs relating to the supply
system between the categories B and C. For example, certain costs allocated according to BASETARD
factors are sometimes found in category B,
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 1 of 10
and sometimes in category C. On the other hand, the costs allocated according to the IMMOBILD factor are
found only in category C.
Answer:
Some clarifications must be made to respond to this question. By definition, the costs of the distribution system
are included in the costs of the transmission system. The costs of the transmission system (including the
distribution system) are categorized in the costs of category B.
The criteria which made it possible to categorize the distribution costs between the categories B and C do not
depend on the allocation factors but on the selection of each cost as a function of the origin of the costs.
In the case of the costs of category B, they are the costs connected to the transmission system, therefore of the
transmission function of the mainlines, which were selected. The distribution system of the mainlines were
excluded. Moreover, the other costs of the gas system, such as the connections and the meters, for example,
were not selected because they will not be used by the producers.
In the case of the costs of category C, Gaz Métro, initially, identified all the costs not related to the gas system,
that is the distribution costs minus the costs of the gas system (transmission system, distribution system, meters,
connections, etc). Thereafter, Gaz Métro was questioned about which of these distribution costs not related to
the gas system should be the subject of a sharing between the service producers and the consumer customers
and this, according to the causal relationship.
Once the costs of category B and C (to be divided between the producers and the consumer customers) were
established, the classification and the current allocation factors attached to these costs (e.g. BASETARD) were
applied in order to allocate these between the producer customers and the consumer customers. At this step,
given that it was sometimes difficult to carry out the allocation of the costs (to apply the allocation factors of the
costs) as an estimate - the producers not yet being customers - Gaz Métro made some assumptions and carried
out the approximations.
Table 1 details the functionalization of the distribution costs between the costs of the gas system and those not
related to the gas system.
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 2 of 10
Table 1
TABLE OF FUNCTIONALIZATION AND CLASSIFICATION - 2008/2009 BUDGET
Distribution costs
2008/2009 BUDGET
Gas system costs
Costs not related to the
gas system
2008/2009
BUDGET
Unaccounted for system gas
Mainlines
Connections and deflections
Meters and regulators
Administration expenses
Electricity transmission
Mercaptan and others
Amortization of deferred charges
Compressed Biogas
Customer service
Contracts, customer calls and orders
Subscriber billing
Credit and collection
Bad debt provisions
Other charges – subscriber billing
Sales and entertainment expenses
Publicity expenses
TOTAL OPERATING EXPENSES
GLOBAL ENERGY EFFICIENCY PLAN
ENERGY EFFICIENCY FUNDS
7 190 000
7 190 000
0
13 820 000
5 206 000
3 364 000
81 122 000
1 666 000
300 000
1 300 000
1 040 000
12 155 000
4 796 000
4 125 000
2 830 000
1 010 000
1 749 000
10 581 000
3 842 000
13 820 000
5 206 000
3 364 000
0
1 666 000
300 000
995 785
0
0
0
0
0
0
0
0
0
0
0
0
81 122 000
0
0
304 215
1 040 000
12 155 000
4 796 000
4 125 000
2 830 000
1 010 000
1 749 000
10 581 000
3 842 000
156 096 000
32 541 785
123 554 215
14 282 000
0
14 282 000
1 892 000
0
1 892 000
GREEN FUNDS
37 957 000
0
37 957 000
Contributions
(16 358 000)
(16 358 000)
0
Mainlines
Lands and rights-of-way
Civil portion of gates
Delivery and regulation stations (regulation equipment)
Connections and deflections
Meters and regulators
45 709 000
684 000
530 000
3 626 000
25 315 000
6 559 000
45 709 000
684 000
530 000
3 626 000
25 315 000
6 559 000
0
0
0
0
0
0
General installations
Biogas
19 911 000
272 000
0
0
19 911 000
272 000
TOTAL AMORTIZATION EXPENSES
86 248 000
66 065 000
20 183 000
Provision for self-insurance
IT development - amortization
(656 000)
13 192 000
0
0
(656 000)
13 192 000
Recovery of account stabilization
NTGC Patent
Tax contributions
13 350 000
13 000
(860 000)
0
0
0
13 350 000
13 000
(860 000)
Subsidy - P.R.C.
Subsidy - P.A.I.R.E.
Global energy efficiency plan
Expenses 1st establishment
Termination payments
Expenses of the interveners
Duty to the Régie
Over-payment 2003
18 802 000
5 000
2 773 000
113 000
1 562 000
1 368 000
1 214 000
(8 006 000)
0
0
0
0
0
0
0
0
18 802 000
5 000
2 773 000
113 000
1 562 000
1 368 000
1 214 000
(8 006 000)
Reduction in operating expenses
Green fund
1 556 000
13 271 000
0
0
1 556 000
13 271 000
TOTAL AMORTIZATION OF DEFERRED CHARGES
Gas system tax
57 697 000
57 697 000
11 851 000
11 851 000
0
4 382 000
15 000
2 448 000
1 424 000
4 937 000
4 382 000
0
2 448 000
0
0
0
15 000
0
1 424 000
4 937 000
25 057 000
18 681 000
6 376 000
27 432 000
27 432 000
0
97 000
562 000
0
0
97 000
562 000
28 091 000
27 432 000
659 000
4 307 000
0
4 307 000
TOTAL INCOME TAX NOT RELATED TO RETURN
4 307 000
0
4 307 000
CASEP – subsidy for using less polluting energies
1 000 000
0
1 000 000
62 000
0
62 000
1 062 000
0
1 062 000
SUB-TOTAL DISTRIBUTION COSTS
412 689 000
144 719 785
267 969 215
RETURN ON RATE BASE
124 318 000
97 125 299
27 192 701
TOTAL DISTRIBUTION COSTS
537 007 000
241 845 084
295 161 916
1 638 631 000
1 280 205 000
358 426 000
Capital tax
Capital tax - Green fund
Transmission system
Places of businesses
Duty to the Régie of building/energy
TOTAL TAXES AND DUTY
Income tax
Income tax - Green fund
Tax connected to the sharing of productivity gain
TOTAL INCOME TAX RELATED TO RETURN
Tax on temporary and other differences
Rebate on consumption
CONSUMPTION AND OTHER REBATES
RATE BASE
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 3 of 10
In column (2) of table 2, the costs which were selected in the total budget for the year 2008/2009 as being not
related to the gas system are shown. Column (3) of table 2 represents the part of the costs which will have to be
shared between the consumer customers and the producer customers (category C costs).
Table 2
Distribution costs
2008/2009
BUDGET
(1)
OPERATIONS EXPENSES
Costs not related Costs not related to
to the gas system the gas system to be
shared
(2)
(3)
156 096 000
123 554 215
14 282 000
14 282 000
0
1 892 000
1 892 000
0
GREEN FUND
37 957 000
37 957 000
0
AMORTIZATION EXPENSES
86 248 000
20 183 000
19 911 000
AMORTIZATION OF DEFERRED CHARGES
57 697 000
57 697 000
15 466 000
TAXES AND DUTY
25 057 000
6 376 000
INCOME TAX
32 398 000
4 966 000
2 831 238
1 062 000
1 062 000
0
RETURN ON RATE BASE
124 318 000
27 192 701
12 830 777
TOTAL DISTRIBUTION COSTS
537 007 000
295 161 916
160 702 278
1 638 631 000
358 426 000
169 122 000
GLOBAL ENERGY EFFICIENCY PLAN
ENERGY EFFICIENCY FUNDS
CONSUMPTION AND OTHER REBATES
RATE BASE
107 787 000
1 876 263
Table 3 below details the steps which made it possible to obtain the costs of the gas system ascribable to the
Gaz Métro transmission function (category B). Column (1) represents all the distribution costs of the 2008/2009
budget. Column (2) is obtained after having identified all the costs of the gas system as presented in table 1. Of
these costs, all the costs associated with the meters and the connections were excluded. For the mainlines,
those being able to be distributed between the costs of the distribution system and the costs of the transmission
system, column (3) represents the costs associated with the transmission system before having to be shared
between the consumer customers and the producer customers when the natural gas is delivered outside the Gaz
Métro territory. This functionalization of the transmission and the distribution systems is obtained starting with the
allocation of the costs.
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 4 of 10
Table 3
TABLE OF FUNCTIONALIZATION AND CLASSIFICATION - 2008/2009 BUDGET
Distribution costs
2008/2009 BUDGET
Unaccounted for system gas
Mainlines
Connections and deflections
Meters and regulators
Administration expenses
Electricity transmission
Mercaptan and others
Amortization of deferred charges
Compressed Biogas
Customer service
Contracts, customer calls and orders
Subscriber billing
Credit and collection
Bad debt provisions
Other charges – subscriber billing
Sales and entertainment expenses
Publicity expenses
TOTAL OPERATING EXPENSES
GLOBAL ENERGY EFFICIENCY PLAN
ENERGY EFFICIENCY FUNDS
GREEN FUND
2008/2009
BUDGET
Gas system costs
(1)
(2)
2008/2009
BUDGET
Producers
(3)
7 190 000
7 190 000
13 820 000
5 206 000
3 364 000
13 820 000
5 206 000
3 364 000
ALLOCATION
FACTORS
2 282 778FB01D
4 387 759CONDPRIN
0FS21
0FS22
81 122 000
0
1 666 000
1 666 000
1 666 000FB01D
300 000
300 000
0EXPLOITD
0FB01D
1 300 000
1 040 000
995 785
0
0FB07D
0Biogas
12 155 000
4 796 000
0
0
0FB08
0FS23
4 125 000
2 830 000
1 010 000
0
0
0
0FS25
0FS29
0FS26
1 749 000
10 581 000
0
0
0HALF-VALUE LAYER
0FS27
3 842 000
0
156 096 000
32 541 785
14 282 000
0
0PGEE
1 892 000
0
0FAIRY
0FS28
8 336 536
0FB01FV
37 957 000
0
(16 358 000)
(16 358 000)
(5 193 557)CONDPRIN
Mainlines
Lands and rights-of-way
Civil portion of gates
45 709 000
684 000
530 000
45 709 000
684 000
530 000
14 512 306CONDPRIN
217 165CONDPRIN
168 272CONDPRIN
Delivery and regulation stations (regulation equipment)
Connections and deflections
Meters and regulators
3 626 000
25 315 000
6 559 000
3 626 000
25 315 000
6 559 000
1 151 231CONDPRIN
0FS21-A
0FS22-A
Contributions
General installations
Biogas
TOTAL AMORTIZATION EXPENSES
Provision for self-insurance
19 911 000
272 000
0
0
86 248 000
66 065 000
0IMMOBILD
0Biogas
10 855 417
(656 000)
0
0BASETARD
IT development - amortization
13 192 000
0
0BASETARD
Recovery of account stabilization
NTGC Patent
Tax contributions
13 350 000
13 000
(860 000)
0
0
0
0MODERATED
0BASETARD
0REVBRUTD
Subsidy - P.R.C.
Subsidy - P.A.I.R.E.
Global energy efficiency plan
18 802 000
5 000
2 773 000
0
0
0
0PRCA
0PAIR
0PGEE
Expenses 1st establishment
Termination payments
113 000
1 562 000
0
0
0IMMOBILD
0IMMOBILD
Expenses of the interveners
1 368 000
0
0FS31
Duty to the Régie
1 214 000
0
0FB01D
Over-payment 2003
(8 006 000)
0
0REVREQ
Reduction in operating expenses
Green fund
1 556 000
13 271 000
0
0
0EXPLOITD
0FB01FV
57 697 000
0
0
11 851 000
11 851 000
1 879 866REVBRUTD
4 382 000
4 382 000
695 095BASETARD
15 000
0
TOTAL AMORTIZATION OF DEFERRED CHARGES
Gas system tax
Capital tax
Capital tax - Green fund
Transmission system
Places of business
Duty to the building/energy régie
TOTAL TAXES AND DUTY
2 448 000
1 424 000
4 937 000
2 448 000
0
0
0BASETARD
2 448 000CAUCPA
0IMMOBILD
0FB01D
25 057 000
18 681 000
27 432 000
27 432 000
4 351 404REVNETD
97 000
562 000
0
0
0REVNETD
0REVNETD
28 091 000
27 432 000
4 307 000
0
0IMMOBILD
4 307 000
0
0
1 000 000
0
0CASEP
62 000
0
0PRC
1 062 000
0
0
SUB-TOTAL DISTRIBUTION COSTS
412 689 000
144 719 785
28 566 319
RETURN ON RATE BASE
124 318 000
97 125 299
TOTAL DISTRIBUTION COSTS
537 007 000
241 845 084
48 286 277
1 638 631 000
1 280 205 000
259 928 039
Income tax
Income tax - Green fund
Tax bill connected to the sharing of productivity gain
TOTAL INCOME TAX RELATED TO RETURN
Tax on temporary and other differences
TOTAL INCOME TAX NOT RELATED TO RETURN
CASEP – subsidy for using less polluting energies
Rebate on consumption
CONSUMPTION AND OTHER REBATES
RATE BASE
Original: 10.21.2010
5 022 962
4 351 404
19 719 958BASETARD
Gaz Métro - 1, Document 1.59
Page 5 of 10
Once the costs of category B and C were established, Gaz Métro carried out the allocation of the costs. As
mentioned, the current allocation factors attached to these costs (e.g. BASETARD, IMMOBILD) were applied in
order to allocate them between the producer customers and the consumer customers.
For example, the allocation factor IMMOBILD is only used to allocate costs of category C. In fact, this factor
makes it possible to allocate the costs associated with the fixed assets included in the rate base which were
functionalized in the costs of category C. For example, the Gaz Métro offices are capital costs which are found in
category C and which are allocated according to factor IMMOBILD. The allocation factor IMMOBILD is not a
factor used to distribute the costs associated with the transmission system of the gas system.
As regards factor BASETARD, the situation is different than for factor IMMOBILD. In fact, factor BASETARD
makes it possible to allocate as many of the costs of category B as those costs of category C between the
producers and consumer customers.
Starting from the rate base presented in table 4, one can note that the investment connected to the transmission
system (allocation according to factor CONDPRINC), accounts for 16% of the rate base. As was mentioned
previously, the functionalization of the costs of the mainlines between the distribution system and the
transmission system was made based on the cost allocation study. Thus, 32% of the costs associated with the
mainlines (factor CONDPRINC) are regarded as transmission costs of Gaz Métro. By applying this percentage to
all the costs whose allocation factor is CONDPRINC, the total of the costs obtained is $259 928 039 on the total
rate base of $1 638 631 000. This enables us to obtain a ratio of 16%. This ratio is then applied to the costs of
category B to be divided as per the allocation factor BASETARD.
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 6 of 10
Table 4
DISTRIBUTION RATE BASE
NOT AMORTIZED COSTS
Not amortized costs - others
Expenses 1st establishment
Recovery stabilization account
Recovery leveling unaccounted for gas
440 000
39 085 000
0 BASETARD
0 TEMPER
(40 000)
0 FB01D
Deferred expenses impact on Rate Case
3 207 000
0 FB01D
Provision for self-insurance
(328 000)
0 BASETARD
44 597 000
0 BASETARD
Expenses of bond issue
5 790 000
0 BASETARD
Securitization of the C/R
5 000
0 BASETARD
(84 000)
0 BASETARD
Contribution prov./fed tax
(255 000)
0 BASETARD
Termination payments
3 254 000
0 BASETARD
NTGC patents
132 000
0 BASETARD
Expenses of the interveners
684 000
0 FS31
Duty to the Régie
607 000
0 FB01D
IT development
Contribution prov./fed $ Australian
Over-payment 2007
(4 003 000)
0 REVREQ
Variation tax rate 09
(388 000)
0 REVREQ
Political impact capit. 2008
2 334 000
0 REVREQ
650 000
0 REVREQ
Recovery gap returned 2008
Programs of subsidy
Commercial program centered on finan
Subsidy - P.R.R.C.
Subsidy - P.A.I.R.E.
Subsidy - P.R.C.
Global energy efficiency plan
51 000
19 243 000
10 000
90 046 000
0 PCAF
0 PRCVN
0 PAIR
0 PRCVN
1 387 000
0 PGEE
6 636 000
0 FB01FV
Green fund
Contribution
TOTAL NOT AMORTIZED COSTS
213.060.000
FIXED ASSETS
Distribution system
Transmission
Contribution Transmission
Land, rights-of-way, structures
Mainlines and deflection
Access roads and others
Connections and deflections
Meters and regulators
General installations
34 955 000
(32 179 000)
11.097.982 CONDPRIN
(10 216.620) CONDPRIN
21 631 000
6 867 700 CONDPRIN
830 901 000
263 805 586 CONDPRIN
54 888 000
17 426 578 CONDPRIN
374.882.000
86.635.000
0 FS21
0 FS22
Land, structure and improvement
55 181 000
Various equipment and material
30 910 000
IMMOBILD
Rolling stock and machinery
34 217 000
0 IMMOBILD
Biogas
Hired apparatuses
Hired apparatuses
6 681 000
0
IMMOBILD
0 Biogas
0 APPLOC
Contributions
Contributions - infrastructures
(26 700 000)
(8 477.074) CONDPRIN
Governmental subsidies
(28 642 000)
(9 093.646) CONDPRIN
Contributions - construction
Contributions - P.E.R.D.
Works in progress
TOTAL FIXED ASSETS
(8 068 000)
(2 561 537) CONDPRIN
(36 551 000)
(11 604 701) CONDPRIN
8 453 000
2 683 772 CONDPRIN
1 407 194 000 |
259 928 039
WORKING CAPITAL
Cash and materials
Study lead/lag
7 711 000
0 EXPLOITD
Study lead/lag - Green fund
(878 000)
0 EXPLOITD
Materials & provisioning
9 505 000
0 EXPLOITD
Lead-lag tax & tax on the capital
12 000
0 REVNETD
Lead-lag tax & tax on the capital
3 468 000
0 REVNETD
Lead/lag - tax (linked to BT) and taxes on the capital
TOTAL WORKING CAPITAL
SELF-INSURANCE
TOTAL DISTRIBUTION RATE BASE
Original: 10.21.2010
19 818 000
(1 441 000)
1 638 631 000
0
0 BASETARD
259 928 039 16%
Gaz Métro - 1, Document 1.59
Page 7 of 10
As BASETARD also makes it possible to allocate costs of category C, table 5 below presents the same financial
year as in table 4 but with the rate base for the costs of category C.
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 8 of 10
Table 5
DISTRIBUTION RATE BASE
NOT AMORTIZED COSTS
Not amortized costs - others
Expenses 1st establishment
Recovery stabilization account
Recovery leveling unaccounted for gas
440 000
39 085 000
(40 000)
Deferred expenses impact causes on Rate Case
3 207 000
Provision for self-insurance
(328 000)
IT development
0 BASETARD
0 TEMPER
0 FB01D
0 FB01D
(328 000)BASETARD
44 597 000
44 597 000 BASETARD
Expenses of bond issue
5 790 000
0 BASETARD
Securitization of the C/R
5 000
0 BASETARD
(84 000)
0 BASETARD
Contribution prov./fed $ Australian
Contribution tax bill prov./fed
(255 000)
0 BASETARD
Termination payments
3 254 000
3 254 000 BASETARD
NTGC patents
132 000
Expenses of the interveners
684 000
684 000 FS31
607 000
607 000 FB01D
Duty to the Régie
0 BASETARD
Over-payment 2007
(4 003 000)
0 REVREQ
Variation tax rate 09
(388 000)
0 REVREQ
Political impact capit. 2008
2 334 000
0 REVREQ
650 000
0 REVREQ
Recovery gap returned 2008
Programs of subsidy
Commercial program centered on finan
Subsidy - P R R C
Subsidy - P A I R E
Subsidy - P R C
Global energy efficiency plan
51 000
19 243 000
10 000
90 046 000
1 387 000
0 PCAF
0 PRCVN
0 PAIR
0 PRCVN
0 PGEE
Green fund
Contribution
TOTAL NOT AMORTIZED COSTS
6 636 000
213 060 000
0 FB01FV
48 814 000
FIXED ASSETS
Distribution system
Transmission
34 955 000
0 CONDPRIN
(32 179 000)
0 CONDPRIN
21 631 000
0 CONDPRIN
Mainlines and deflection
830 901 000
0 CONDPRIN
Access roads and others
54 888 000
0 CONDPRIN
Contribution Transmission
Lands, rights-of-way, structures
Connections and deflections
Meters and regulators
General installations
374 882 000
86 635 000
0 FS21
0 FS22
Land, structure and improvement
55 181 000
55 181 000 IMMOBILD
Various equipment and material
30 910 000
30 910 000 IMMOBILD
Rolling stock and machinery
34 217 000
34 217 000 IMMOBILD
Biogas
6 681 000
0 Biogas
Hired apparatuses
Hired apparatuses
0
0 APPLOC
Contributions
Contributions - infrastructures
(26 700 000)
0 CONDPRIN
Governmental subsidies
(28 642 000)
0 CONDPRIN
(8 068 000)
0 CONDPRIN
(36 551 000)
0 CONDPRIN
Contributions - construction
Contributions - P E R D
Works in progress
TOTAL FIXED ASSETS
8 453 000
1 407 194 000
0 CONDPRIN
120 308 000
WORKING CAPITAL
Cash and materials
Study lead/lag
7 711 000
0 EXPLOITD
Study lead/lag - Green fund
(878 000)
0 EXPLOITD
Materials & provisioning
9 505 000
0 EXPLOITD
Lead-lag tax bill & tax on the capital
12 000
0 REVNETD
Lead-lag tax bill & tax on the capital
3 468 000
0 REVNETD
Lead/lag - income tax (connected to BT) and taxes on the capital
TOTAL WORKING CAPITAL
SELF-INSURANCE
TOTAL DISTRIBUTION RATE BASE
Original: 10.21.2010
19 818 000
(1 441 000)
1 638 631 000
0
0 BASETARD
169 122 000 10%
Gaz Métro - 1, Document 1.59
Page 9 of 10
The costs of category C identified in the rate base are distinct from those used previously in category B.
As there is no sub-functionalization in the costs selected, the total of the costs obtained of $169 122 000
on the total of the rate base of $1 638 631 000 makes it possible to obtain a ratio of 10%. The allocation
factor BASETARD thus consists of 10% of investments based on the costs of category C. This
percentage is then applied to the costs of category C to be shared as per the allocation factor
BASETARD.
Question:
1.2
Please indicate if the costs allocated according to derived factors BASETARD and IMMOBILD are costs
associated, completely or partly, with the transmission function of the distribution system and that
consequently, they should be functionalized in the costs of category B. Please justify your answer.
Answer:
No. See the answer to question 1.1.
Original: 10.21.2010
Gaz Métro - 1, Document 1.59
Page 10 of 10
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from: Régie de l’energie
References:
(i) Gaz Métro-1, Document 1, page 39
(ii) Gaz Métro-1, Document 1.20, page 3
(iii) Gaz Métro-1, Document 1.4, page 2
Preamble:
Reference (i), for the costs of category “B”:
“As the level and the stability of the volumes injected into the system by the producers is similar to
characteristics of consumption of the current customers with D4 rate, Gaz Métro chose to use the average
unit costs of the D4 rate, excluding step 4.10, to identify the unit rate of the volume delivered outside the
territory applicable to the producer customers.”
Reference (ii), for the costs of category “C”:
“For details of the costs having to be divided between the producers and the consumer customers, as well
as the corresponding factor, see the answer to the request for information 8.1. For the sharing of the costs
in columns (3), (4) and (5), the concept of marginal costs was used. A pro rata was applied to each cost
depending on whether they varied according to the number of customers, volumes or revenues. Gaz Métro
made the assumption that the incomes are proportional to volumes. For example, to obtain the amount of
$256 929 in column (5) of the costs associated with the income tax, the reasoning is as follows: 516 475
000 m3 (volume envisaged for a case-type) / (5 174 833 000 m3 (total volume envisaged 2008-2009 budget)
+ 516 745 000 m3 (volume envisaged for a case-type))* $2,831,238. For the costs whose allocation factor is
not a function of the rate basis (volume, number of customers and income), the part of the cost assumed by
the customers at rate 4.09 (for each factor) was applied to each cost.”
Reference (iii)
“It would have been possible to recover the costs of category C via a “postage stamp”-type rate but the rate
would undoubtedly have to be revised in a substantial way [...]. The inclusion, to the studies of revenues
required, of the portion of operating and maintenance costs (distribution costs not related to the gas system)
ascribable to the producers seemed at the same time simpler, more stable over time [...].”
Question:
2.1
Please explain that the costs of category “C” are not established in the same way as the costs of
category “B”; i.e. by using the average unit cost of the D4 rate (excluding step 4.10) as a “proxy”.
Original: 10.21.2010
Gaz Métro - 1, Document 1.60
Page 1 of 6
Answer:
It would have been possible to establish this rate, just like that of category B, according to a “proxy” based
on the D4 rate, excluding step 4.10. Yet, according to Gaz Métro, this assumption does not offer the best
guarantee of being close to the reality which could be observed at the time of the arrival of the producers
as per the method suggested by Gaz Métro. In fact, the establishment of a rate based on a combined
ratio, itself based on scenarios of completion of projects of investment is, according to Gaz Métro, a more
acceptable solution and closer to a realizable scenario.
In fact, the method suggested by Gaz Métro partially uses a “proxy” related to a distribution rate (step 4.9
in this case). In this case, the costs associated with the rate basis are allocated according to parameters
of consumption based on hypothetical producer customers. The portion of the other costs - not
associated with the rate basis - supported by the current customers of step 4.9 are used to determine the
part of these other costs which are also allocated to the producers.
Question:
2.2
Please indicate if the average unit cost of the D4 rate (excluding step 4.10) could constitute a good
approximation to establish a flat rate (¢/m3) for the costs of category “C”. If this is not the case, please
indicate which would be the best “proxy”.
Answer:
Gaz Métro proposes the method which is, according to it, the most fair and constitutes the best estimate
but several other methods could actually have been considered. See the answer to question 2.1 above.
Question:
2.3
Please indicate which would be the flat rate (¢/m3), for the costs of category “C”, established with the
average unit cost of the D4 rate (excluding step 4.10) or the best approximation according to the answer
to the preceding question.
Answer:
By using the costs of category C allocated to the D4 rate (excluding step 4.10), the average unit cost
(¢/m3) would be 0.70 ¢/m3 (see the table below).
Original: 10.21.2010
Gaz Métro - 1, Document 1.60
Page 2 of 6
TABLE OF FUNCTIONALIZATION AND CLASSIFICATION - 2008/2009 BUDGET
Distribution Costs
2008/2009
BUDGET
Unaccounted for system gas
2008/2009 BUDGET
TO BE SHARED
Producer
Average rate of the tariff
4*
ALLOCATION
FACTORS
7 190 000
0
FB01D
0
Mainlines
Connections and deflections
Meters and regulators
Administration expenses
Electricity transmission
Mercaptan and others
Amortization of deferred charges
Compressed Biogas
13 820 000
5 206 000
3 364 000
81 122 000
1 666 000
300 000
1 300 000
1 040 000
0
0
0
81 122 000
0
0
0
0
CONDPRIN
FS21
FS22
EXPLOITD
FB01D
FB01D
FB07D
Biogas
0
0
0
5 377 970
0
0
0
0
Customer service
Contracts, customer calls and orders
Subscriber billing
Credit and collection
Bad debt provisions
Other charges – subscriber billing
Sales and entertainment expenses
Publicity expenses
12 155 000
4 796 000
4 125 000
2 830 000
1 010 000
1 749 000
10 581 000
3 842 000
12 155 000
4 796 000
4 125 000
2 830 000
1 010 000
1 749 000
0
0
FB08
FS23
FS25
FS29
FS26
HALF-VALUE LAYER
FS27
FS28
5 655
2 231
50 389
4 072
50 219
14 542
0
0
TOTAL OPERATING EXPENSES
156 096 000
107 787 000
GLOBAL ENERGY EFFICIENCY PLAN
ENERGY EFFICIENCY FUNDS
GREEN FUND
Contributions
14 282 000
1 892 000
37 957 000
(16 358 000)
0
0
0
0
PGEE
FAIRY
FB01FV
CONDPRIN
0
0
0
0
45 709 000
684 000
530 000
3 626 000
25 315 000
6 559 000
19 911 000
272 000
0
0
0
0
0
0
19 911 000
0
CONDPRIN
CONDPRIN
CONDPRIN
CONDPRIN
FS21-A
FS22-A
IMMOBILD
Biogas
0
0
0
0
0
0
2 077 286
0
86 248 000
19 911 000
(656 000)
(656 000)
BASETARD
-62 675
13 192 000
13 350 000
13 000
(860 000)
18 802 000
5 000
2 773 000
113 000
1 562 000
1 368 000
1 214 000
(8 006 000)
1 556 000
13 271 000
13 192 000
0
0
0
0
0
0
0
1 562 000
1 368 000
0
0
0
0
BASETARD
MODERATED
BASETARD
REVBRUTD
PRCA
PAIR
PGEE
IMMOBILD
IMMOBILD
FS31
FB01D
REVREQ
EXPLOITD
FB01FV
1 260 386
0
0
0
0
0
0
0
162 961
351 471
0
0
0
0
57 697 000
15 466 000
11 851 000
0
REVBRUTD
0
4 382 000
15 000
2 448 000
1 424 000
4 937 000
452 263
0
0
1 424 000
0
BASETARD
BASETARD
CAUCPA
IMMOBILD
FB01D
43 210
0
0
148 564
0
25 057 000
1 876 263
27 432 000
2 831 238
REVNETD
384 581
97 000
562 000
28 091 000
0
0
2 831 238
REVNETD
REVNETD
0
0
384 581
4 307 000
0
IMMOBILD
0
4 307 000
0
1 000 000
0
CASEP
0
62 000
0
PRC
0
1 062 000
0
0
SUB-TOTAL DISTRIBUTION COSTS
412 689 000
147 871 501
9 870 863
RETURN ON RATE BASE
TOTAL DISTRIBUTION COSTS
124 318 000
537 007 000
12 830 777
160 702 278
Mainlines
Land and rights-of-way
Civil portion of gates
Delivery and regulation stations (regulation equipment)
Connections and deflections
Meters and regulators
General installations
Biogas
TOTAL AMORTIZATION EXPENSES
Provision for self-insurance
IT development - amortization
Recovery of account stabilization
NTGC patent
Tax contributions
Subsidy - P.R.C.
Subsidy - P.A.I.R.E.
Global energy efficiency plan
Expenses 1st establishment
Termination payments
Expenses of the interveners
Duty to the Régie
Over-payment 2003
Reduction in operating expenses
Green fund
TOTAL AMORTIZATION OF DEFERRED CHARGES
Gas system tax
Capital tax
Capital tax - Green fund
Transmission system
Places of business
Duty to the building/energy régie
TOTAL TAXES AND DUTY
Income tax
Income tax - Green fund
Tax bill connected to the sharing of productivity gain
TOTAL INCOME TAX RELATED TO RETURN
Tax on temporary and other differences
TOTAL INCOME TAX NOT RELATED TO RETURN
CASEP – subsidy for using less polluting energies
Rebate on consumption
CONSUMPTION AND OTHER REBATES
5 505 080
2 077 286
1 712 142
191 774
0
BASETARD
1 225 874
11 096 737
¢/m³ 0.70
Original: 10.21.2010
Gaz Métro - 1, Document 1.60
Page 3 of 6
Question:
2.4
Please explain that a “postage stamp”-type rate for the costs of category “C” must be revised in a
substantial way and is less stable over time. Please illustrate by means of examples.
Answer:
The objectives of Gaz Métro regarding the establishment of rate at the receipt point (including the costs
of category C) are to minimize the cross subsidization of the producers at the receipt point and to ensure
a stability of the applicable rates. The proposal of Gaz Métro makes it possible to determine a different
rate for each producer, which makes it possible to meet these objectives. The establishment of a postage
stamp rate reflecting the costs of category C would have created cross subsidization between the
producers and instability, which Gaz Métro tries to avoid.
Another objective of Gaz Métro regarding the proposed establishment of the invoicing of the costs of
category C was to determine an applicable rate according to a more precise method for the allocation of
the costs. The purpose of this was to potentially reduce the possibility of a rate variation in the event that
a later allocation of the costs - following the inclusion of producers in the cost allocation study - would
provide results very different from that of this document. Let us note that to maintain minimal cross
subsidization, Gaz Métro proposes, as a rate strategy, to annually revise the rates according to the
results of the cost allocation study.
It is important to note that, regardless of the way the rate is calculated, a variation of the rate will exist
because of the simple fact that the cost allocation study will re-allocate, each year, the costs according to
the existing rate classes.
However, another element of variation is related to the establishment of a postage stamp rate since it
would be the result of the allocation of costs of a new rate in full evolution (following the arrival of
producers who can have different consumption profiles). A rate, determined for each producer, as
proposed by Gaz Métro, reduced the risk of variation.
When the customers of the producers are “sufficiently” numerous or stable, the rates should stabilize, just
as is the case in the existing distribution rates, when the consumption profile of their customers remains
relatively stable over the years.
The table below makes it possible to visualize the potential variations of a postage stamp rate. The
starting data are those coming from section 3.4.1.2 of the Gaz Métro-1, Document 1 document. The data
of the subsequent years for the fixing of the rate are, of course, hypothetical.
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Gaz Métro - 1, Document 1.60
Page 4 of 6
TABLE 1 - Tariffing at the receipt points, 1st years
Fixing of the tariff
(1)
2012 Rate Case
(2)
(3)
2013 Rate Case
(4)
(5)
(6)
Rate factor
Costs C
Rate factor
Costs C
Rate factor
4% invest
Postage stamp
4% invest
Postage stamp
alloc costs
¢/m3
¢/m3
¢/m3
¢/m3
¢/m3
Costs C
Postage stamp
¢/m3
Rate at receipt point
Costs of category A
1.13
1.13
1.13
1.13
1.20
1.20
Costs of category C
0.37
0.70
0.37
0.72
0.40
0.40
TOTAL
1.50
1.83
1.50
1.85
1.60
1.60
On the basis of the same hypotheses as those presented in section 3.4.1.1 as evidence, the hypothesis is made
that a postage stamp rate for the costs of category C of 0.70 ¢/m3 is the result of a “proxy” established on the
basis of the D4 rate, excluding step 4.10 (see column (2)).
Let us suppose that the arrival of a producer is envisaged in the framework of the 2012 Rate Case but is not
included in the financial year of the allocation of the costs, this one being staggered over one year, all things
being equal otherwise:
>
the calculation of the rate related to the costs of category C will remain unchanged in the case of the
proposal of Gaz Métro (columns (1) and (3)) since it will remain a function of the hypothesis set out in
section 3.4.1.1 of the proof
>
calculation according to a postage stamp rate could result in a different rate since it would be the result
of the cost allocation study which reallocated the costs according to the existing rates (columns (2) and
(4))
Let us suppose that there is no other producer envisaged in the 2013 Rate Case. The producer envisaged at the
time of the Rate Case 2012 will thus be considered in the cost allocation study filed in the 2013 Rate Case. Also
let us suppose that the profile of consumption of this producer is very different from the profile of consumption of
the D4 rate, excluding step 4.10.
Notwithstanding the variations due to simple reallocation of the costs which will have an effect on the rate of the
costs of category C, the variation of rate following the inclusion of the producer in the cost allocation study could
be minimized in the case of a calculation of a rate of the costs of category C according to the ratio of 4% of the
investment since this one is based on a combined ratio, itself based on scenarios of completion of investment
projects.
However, the risk of occurrence of great variations would occur during the subsequent years, as illustrated in the
table below.
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Gaz Métro - 1, Document 1.60
Page 5 of 6
TABLE 2 - Tariffing at the receipt point, subsequent years
2014 Rate Case
(1)
(2)
(3)
(4)
(5)
Rate allocation factor of the costs
(6)
Costs Postage stamp
C-
Prod 1
¢/m3
Prod 2
¢/m3
Prod 3
¢/m3
Prod 1
¢/m3
Prod 2
¢/m3
Prod 3
¢/m3
Tariffing at receipt point
Costs of category A
1.20
1.10
2.30
1.20
1.10
2.30
Costs of category C
0.40
0.30
0.80
0.50
0.50
0.50
TOTAL
1.60
1.40
3.10
1.70
1.60
2.80
Let us suppose that there are two new renowned producers in the cost allocation study of the 2014 Rate Case.
According to the proposal of Gaz Métro, new rates will be established for the costs of category C according to
the results of the cost allocation study. Thereafter, these rates will not substantially vary from year to year for
each producer (subject to the allocation of the costs).
According to a postage stamps rate, the rate for category C, resulting from reallocation of the costs for a
category of customers which now includes three producers, will reflect the average costs of this category. The
producer who paid 0.40 ¢/m3 formerly (Table 1, column (6)) will now pay 0.50 ¢/m3 (Table 2, column (4)).
Without redoing the table, one can conceive that the arrival of every new producer having a profile very different
from all those existing will have the effect of varying the rate paid by all the existing class, which can be avoided
according to the proposal of Gaz Métro.
Original: 10.21.2010
Gaz Métro - 1, Document 1.60
Page 6 of 6
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 1 dated October 14, 2010
Inquiry from:
Régie de l’énergie
References:
(i)
(ii)
(iii)
(iv)
Gaz Métro-1, Document 1.1, page 1
Gaz Métro-1, Document 1.1, page 3
Gaz Métro-1, Document 1.2, page 3
Gaz Métro-1, Document 2.20, page 2
Preamble:
(i)
“This paragraph only aims to emphasize the “connection pipeline” component of the receipt service
offered by Gaz Métro. Gaz Métro does not make reference here to its exclusive right of distribution” (we
have underlined for emphasis)
(ii) “Yes, it would be possible for a producer to inject his gas directly into the TQM system. In fact, in the
event of Gaz Métro constructing and operating a new pipeline connecting the installations of the
producers to the TQM system, the tariff principles requested in this request would be applicable. [...]”
(iii) “[...] the distributor determines the location of its distribution system, which includes the receipt point.”
(we have underlined for emphasis)
(iv) “[...] the new connection pipelines will join the existing transmission system at the point of interconnection
to the Gaz Métro system. In fact, the new connection pipelines could also be joined directly with the
TCPL/TQM transmission system. [...]” (we have underlined for emphasis)
3.1 Please indicate if Gaz Metro considers that by virtue of its exclusive right of distribution, it has, within
its franchise, the monopoly on the construction, operation and maintenance of any connecting line
between a point of reception (whose location is determined by Gaz Metro) and the existing Gaz Metro
network or the TCPL / TQM network.
All the possible circumstances, known and unknown, present or future cannot be assessed at this time. The
reference to "ANY pipeline”, or mains, used eventually to move natural Gaz between a "receipt point" and the
existing system is premature at this stage of the development of a new industry, for both Gaz Métro and the
producers.
The exclusive right conferred to Gaz Métro under the Act respecting the Régie de l'énergie (the "Act") is treated in
section 63 thereof. It states that:
“Exclusive natural Gaz distribution rights confer on the holder, within the territory where they obtain and to the
exclusion of anyone else, the right to operate a natural Gaz distribution system and to transmit and deliver by
pipeline natural Gaz intended for consumption.”
In Gaz Metro’s view, the exclusive right covers not only the construction of pipelines, as supported by the
requirement imposed by the Article 73 of the Act to obtain an authorization from the Régie before constructing a
new asset intended for distribution, but also their operation and maintenance.
To answer more precisely the question of the Régie, Gaz Métro expresses its position concerning the
construction, operation and maintenance of pipelines in the case of a connection line between a receipt point and
its current natural Gaz system. Subsequently, the matter related to connection lines between a receipt point and
the TCPL / TQM system is discussed.
In the first scenario, there is no doubt that a connection line between a receipt point and Gaz Metro’s current
system is within its exclusive jurisdiction and this for two reasons:
First, the exclusive right gives Gaz Metro the right to operate a natural Gaz distribution system. The section 2 of
the Act defines the term «natural Gaz distribution system" as:
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Gaz Métro - 1, Document 1.61
Page 1 of 3
"network of conduits, equipment, apparatus, structures, Gaz meters, meters and other devices and accessories
for the supply, transmission or delivery of natural Gaz in a given territory, excluding any Gaz pipe or line installed
in, under or on the outer surface of a house, plant, building or other structure of a consumer.”
Considering this definition, connection lines between a receipt point and the current Gaz system are part of the
latter, as well as all Gaz Metro pipelines, starting at each interconnect point with the TCPL / TQM system, and
eventually branching out to allow the distribution of natural Gaz to one or several consumer customers.
Second, Article 63 of the Act gives Gaz Metro not only the exclusive right to operate a distribution system, but
also to transport by pipeline natural Gaz intended for consumption. The natural Gaz produced in Quebec would
be transported by Gaz Metro, once dried and, where appropriate, filtered, downstream to the receipt point, in new
pipelines to the existing Gaz system, either for consumption along this new line or after the interconnect point
where it is ready for use by customers. Therefore, the new Gaz Métro’s facilities, under this scenario, would be
transmission and distribution facilities of natural Gaz, which is intended to be delivered by pipeline to a consumer
as defined in the Act. Thus, these facilities would be part of Gaz Métro’s exclusive right from this angle.
Considering that the first scenario is clearly within the exclusive right of Gaz Metro and that the Régie therefore
has jurisdiction to establish a receipt rate, Gaz Metro does not deem it necessary to take position with respect to
a connection line going from a well to the TCPL / TQM system. The present file which is a ratemaking case is
probably not the most appropriate case to address this question; it will be addressed later, for instance as part of
an investment request case. That being said, Gaz Métro considers that a connection line between a well and the
TCPL / TQM system on which consumers are connected is within Gaz Métro’s exclusive right.
3.2 In connection with the answer to the previous question, please indicate if a producer could decide to
transport its own natural Gaz to Gaz Metro's existing network or to the TCPL / TQM network by building
his own duct, without referring to Gaz Métro and therefore without this duct being part of the Gaz Métro
distribution network. Please give a detailed explanation
According to Gaz Metro, the connection line between the receipt point and its current Gaz system is part of its
exclusive right. Consequently, no producer shall build such pipelines, and the rate will be regulated by the Régie
under the established principles
The receipt point is normally at the junction of the gathering system and the connection line. The gathering
system and connection lines are distinguished by their primary function. The gathering system helps producer(s)
to route the volumes of natural Gaz extracted from separate wells to a single point. Normally, producer(s) will
build and operate natural Gaz drying and filtration facilities from which natural Gaz will be injected into the Gaz
Metro’s connection lines, whose function is to transport natural Gaz to the existing system.
The specific geographic point where producer’s gathering system will end and where Gaz Metro’s natural Gaz
distribution system begins should in most cases be at or near the place where the Gaz is dried and if necessary
filtered. The positioning of this filtration and dewatering facilities will in turn depend on many parameters, many of
which are under the control of producers, (i.e.) the density of wells in a given region, the distance between well
zones and anticipated volumes. Gaz Metro understands from its discussions with producers that this point will be
suggested by one or more producers to be as efficient as possible from an economic, environmental and
operational perspective in order to minimize the duplication of such facilities and maximize their use. Gaz Métro
will then decide to present a scenario which the Régie will approve or reject. The gathering system may be longer
or shorter depending on the scenario.
As discussed in the response to Question 3.1, the connection lines between producers' facilities (gathering
system) and the existing Gaz system will be used to transport and deliver by pipeline natural Gaz intended for
consumption, activities that are within Gaz Metro’s exclusive right. Gaz Metro would carry natural Gaz ready for
consumption, (i.e.) dried and filtered if necessary through new pipelines either for consumption along these
pipelines, or to another location for consumption. These pipelines would therefore be transportation and
distribution pipelines for natural Gaz which is intended to be delivered by pipeline to a consumer as defined in the
Act. These facilities will be part of the natural Gaz distribution system as well as other pipelines that start at each
interconnect point of our Gaz system with the TCPL / TQM system and which ramify to allow the distribution of
natural Gaz to consumer customers.
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Gaz Métro - 1, Document 1.61
Page 2 of 3
3.3 In connection with the answers to both previous questions, please indicate if Gaz Metro considers
that its exclusive distribution rights give it a monopoly on all natural gas transportation within the
geographical limits of its franchise. Please give a detailed explanation.
As mentioned initially in 3.1, the term "any transportation" of natural Gaz requires an absolute answer, in all
possible circumstances, known and unknown, present or future, which is not possible or required for the present
case to establish the regulated and applicable rates under the Act. The article 63 of the Act gives Gaz Métro an
exclusive right to operate a natural Gaz distribution system and to transmit and deliver by pipeline natural Gaz
intended for consumption. Should all the conditions mentioned in this section be met, natural Gaz transportation
within Gaz Metro’s territory is within its exclusive jurisdiction. One way to illustrate the position of Gaz Metro is to
say that any branch of its current Gaz system is under its exclusive right. As for any connection lines directly
connected to the TCPL / TQM system, Gaz Metro, respectfully reiterates that it is not necessary to address this
issue at this stage, because the circumstances required to make an informed decision in each investment case
are not known.
Original: 10.21.2010
Gaz Métro - 1, Document 1.61
Page 3 of 3
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
References: (i) Gaz Métro-1, Document 1.1, page 3
(ii) Gaz Métro-1, Document 2.1, page 3
Preamble:
Reference (i):
“Yes, Gaz Métro intends to allocate the operating and maintenance costs of these new pipelines to the
producers. These costs are part of the costs of category “C”.”
Reference (ii):
“A connection pipeline is an integral part of the Gaz Métro gas system.”
Question:
4.1
Please explain that the operating and maintenance costs of the new pipelines are integrated into the
distribution costs not related to the transmission system (Costs of category “C”) and not to the costs of
the transmission function of the gas system (Costs of category “B”).
Answer:
The connection pipelines are used to connect the installations of the producers at the receipt point to the
existing gas system. According to the law of causality of costs, the cost of new connection pipelines
(amortization, financial expenses, output, taxes and duties) used only by the producers is allocated to
them at 100%. A direct allocation of these costs is proposed.
These new connection pipelines are an integral part of the Gaz Métro gas system. Thus, operating and
maintenance costs of the new pipelines must be allocated to the producers. The operating and
maintenance costs of these new pipelines cannot, however, be distinguished from the maintenance and
the operation of the existing gas system. It is not possible to carry out a direct allocation of these costs,
as suggested for the costs of category A (amortization, output, tax, etc), because they are common
costs.
Since the operating and maintenance costs are associated with the complete gas system including the
new connection pipelines, they cannot be only allocated to the costs of category B.
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Gaz Métro - 1, Document 1.62
Page 1 of 2
On the other hand, the costs of category C are distribution costs “other” than the costs of the gas system
and applicable to all the customers served by the gas system, including the new connection pipelines. It
appears logical then to integrate the operating and maintenance costs into this category of costs.
Original: 10.21.2010
Gaz Métro - 1, Document 1.62
Page 2 of 2
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 1 dated October 14, 2010
Inquiry from:
Régie de l’énergie
References: (i) Gaz Métro-1, Document 1.2, page 1
(ii) Gaz Métro-1, Document 2.7, page 1
Preamble:
(i)
“No involvement of Gaz Métro will be necessary for the system of collection, i.e. the connection of the wells to
the receipt point. The producers will be responsible for the construction, installation, operation and
maintenance of the wells, the collection system, the compressor stations as well as the pumping and cleaning
stations.” (we have underlined for emphasis)
(ii) “[...] an “injection point” will be always located at the “receipt point” in a request for standard investment. Gaz
Métro would be inclined to examine the exceptional situations where the “injection point” could be downstream
from the dedicated installations, the connection pipeline, built by Gaz Métro. Gaz Métro does not see an
exceptional situation where the injection point could be upstream of the receipt point because the pipeline
would then be built by non-regulated entities.”
5.1 Please explain what distinguishes the collection network of connection lines including with respect to
the exclusive distribution rights of Gaz Metro. Please explain how Gaz Métro justifies the fact that the
duct, to get to a point of reception, does not fall within its exclusive distribution rights, while the duct
located between the reception point and the existing network would fall within its exclusive distribution
rights .
The gathering system differs from connection lines by its primary function. The gathering system helps
producer(s) to route the volumes of extracted natural Gaz from separate wells to a single point. Normally,
producer(s) should build facilities in which the extracted natural Gaz is filtered to remove impurities and dried to
be ready to be consumed before being injected into the new Gaz Metro pipeline which function is to bring natural
Gaz to the existing Gaz system.
Producer’s gathering system may, in our view, be treated as Gaz pipes or lines installed under a house, plant,
building or other structure of a consumer. Article 2 of the Act defining “natural Gaz distribution" expressly
excludes such lines. Therefore, they are not part of the exclusive right of Gaz Metro to operate natural Gaz
system as defined by Article 63 of the Act.
5.2 Please explain how Gaz Métro’s exclusive distribution rights allow it to decide where the collection
network ends (by determining the location of the reception point).
Regardless of its exclusive right, Gaz Metro does not desire to unilaterally decide about the receipt point location.
The determination of the receipt point is a decision that will be taken in collaboration with the producer customers
to the extent of what is possible in order to promote collective interest.
The answer to question 2.4 of the Régie in the exhibit Gaz Metro-1, Document 1.2, concerning the receipt point
determination process details the steps that will be taken to prepare an investment request prior to its filing at the
Régie.
Should there be a dispute; the Régie will always keep its jurisdiction to decide on investment requests from Gaz
Metro which will eventually include the position of the receipt point.
Original: 10.21.2010
Gaz Métro - 1, Document 1.63
Page 1 of 1
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
Reference: Gaz Métro-1, Document 1.2, pages 2 and 3
Preamble:
“Please describe the circumstances which would indicate that the injection point is different from the receipt
point.
Answer:
Except for exceptions which will have to be justified and approved by the Régie within the framework of the
future requests for investment, the injection point will always be equivalent to the receipt point.
Gaz Métro proposes this distinction between the injection point and the receipt point as its evidence in order to
allow producers who would possess production sites relatively close to each other to transport the gas
produced towards common equipment for cleaning and/or pumping, and this in order to make it possible to
reduce the production costs of the producers. In fact, the construction of common cleaning equipment instead
of two or three pieces of equipments could be economical. The costs of installation and operation of the
cleaning equipment will always be to the account of the producers and will not be subject to tariffing by Gaz
Métro.”
Question:
6.1
Please schematically represent the situation described in the preamble by indicating the position of the
injection point and that of the receipt point.
Answer:
Diagram I below, coming from the APGQ (page 11) case, presents the stages of the gas production
before the receipt point. As mentioned in the answer to question 2.3 of the Régie in the Gaz Métro-1,
Document 1.2 document, barring exceptions which will have to be justified and approved by the Régie
within the framework of future requests for investment, the injection point will always be equivalent to the
receipt point.
Original: 10.21.2010
Gaz Métro - 1, Document 1.64
Page 1 of 3
Diagram I
Diagram II below illustrates the exception where the injection point is different from the receipt point.
Original: 10.21.2010
Gaz Métro - 1, Document 1.64
Page 2 of 3
Diagram II
Production site #1
(Diagram 1 =
Production)
Cleaning and/or
pumping
factory
(Diagram 1 =
Production)
Production site #2
(Diagram 1 =
Production)
Producers
1)
2)
3)
4)
5)
Original: 10.21.2010
Gaz Métro
Producers
Gaz Métro
Receipt point
Connection pipeline
Injection point
Interconnection point with the existing Gaz Métro gas system
Existing Gaz Métro gas system
Gaz Métro - 1, Document 1.64
Page 3 of 3
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from: Régie de l’énergie
Reference: Gaz Métro-1, Document 1.6, pages 4 and 5, question 6.4
Preamble:
Gaz Métro answers negatively to the following question of the Régie:
“Please indicate if Gaz Métro intends to ask for indemnities to cover, throughout the contract period, the
possible compensation payable by the producer. If the answer is positive, please describe these indemnities. If
the answer is negative, please discuss the advantages and disadvantages of requiring such indemnities.” (we
have underlined for emphasis)
Question:
7.1 Please complete your answer to question 6.4.
Answer:
From a strictly economic viewpoint, Gaz Métro is of the opinion that the new tariff proposed, including all
the modalities and associated applicable conditions, is a just and fair sharing of profit or loss risks
between the current customers, the producer customers and the Gaz Métro shareholders. The tariff
principles proposed limit the risk over the lifespan of the assets dedicated to the receipt of natural gas.
Requiring indemnities to cover the possible compensation payable would in fact have the advantage of
reducing the risk for the consumer customers and the Gaz Métro shareholders. This sharing of risk
would, however, be unfair for the producers according to the already existing practices at Gaz Métro and
could have a considerable impact on the development of this industry. Highly discouraging barriers could
restrain this nascent industry.
In order to ensure a sharing of risk between the parties, Gaz Métro proposes various conditions
applicable to the producers, namely:
> A 10-year initial contract term without the possibility of tariff reduction applicable to the rate for
the producers;
> An indemnity in order to ensure recovery of marginal costs due to the producers;
Original: 10.21.2010
Gaz Métro - 1, Document 1.65
Page 1 of 2
> No possibility of lowering of the contractual maximum capacity (CMC) for the term of the
contract, unless Gaz Métro agrees to transfer it to another producer;
> The establishment of fixed revenues to more than 95% for the component “pricing at the receipt
point”;
> The possibility of requiring a deposit at the time of the service request or during the course of the
contract;
> The fixing of the deposit amount based over 12 months of service instead of the two months,
required for the consumer customers; and
> A retention period of 60 consecutive months instead of the 12 or 36 months necessary for the
consumer customers.
These indemnities seem fair and reasonable in comparison to those demanded from the other customers.
With the proposal of an indemnity and the other elements enumerated above, the risk is limited to the risk of
failure. The risk of failure remains a residual risk, as much for Gaz Métro as for the existing customers and the
other producers. This risk of failure exists for all the consumer customers of Gaz Métro.
At the level of profits, one should not, however, lose sight of the fact that the receipt rate will have a beneficial
impact for all the existing customers because a share of the distribution costs now borne by the consumer
customers will be borne by the consumer customers as well as by the producers (costs of category B and C).
Gaz Métro reaffirms that the principles which guided the development of the receipt rate are stability, simplicity
and equity. Gaz Métro considers that requiring rules which are more constraining than those proposed would go
against the principle of equity between the customers.
Original: 10.21.2010
Gaz Métro - 1, Document 1.65
Page 2 of 2
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
Reference: Gaz Métro-1, Document 1.7, page 1
Preamble:
“[...] please confirm that, regardless of whether the gas injected by the producers is consumed outside the
consumption zone or in the consumption zone, the transmission system of Gaz Métro must be used, whether
to convey gas to another zone or to ensure the reliability of the supply of the customers of the distributor in the
event of production decrease by the local gas producers.
Answer:
Yes, the transmission system of Gaz Métro is used.”
Question:
8.1
Please consider the case in which 2 natural gas producers share the same injection point on the Gaz
Métro system. The first producer sells natural gas to a customer outside the franchise. The second
producer sells within the franchise and part of its gas is sent to another consumption zone. The natural
gas produced by these 2 producers uses exactly the same route to use the TQM/TCPL system. How,
from the point of view of equity between the gas producers in Quebec, can one justify that under the
proposal of Gaz Métro, a producer doesn't pay anything for the use of the transmission part of the Gaz
Métro system and the other producer, 0.7 cent/m3?
Answer:
Gaz Métro considers its proposal fair. In fact, as explained in answer to question 1.7 of the Régie (Gaz
Métro-1, Document 1.7), the producer who delivers his gas in the Gaz Métro territory does not use the
existing transmission system of Gaz Métro and thus does not have to bear its expenses. It is only the
consumer customers who use it and, consequently, must bear its expenses. This practice is consistent
with the current one of routing of natural gas coming from outside of the territory (Western Canadian). In
fact, the producers outside of the territory do not use the transmission system of Gaz Métro and do not
bear its costs since they deliver within the territory. It is only the consumer customers who use it and who
bear its expenses.
Original: 10.21.2010
Gaz Métro - 1, Document 1.66
Page 1 of 3
In the case in which the natural gas is intended to be delivered outside the territory of the distributor, the
existing transmission system of Gaz Métro is used by the producer for his own use in order to route the
natural gas outside the territory towards another location where the natural gas could be consumed. In
this case, the consumer customers do not use the system and do not have to bear its expenses. These
expenses, for the use of the existing transmission system of Gaz Métro, must then be borne by the
producers delivering outside the territory only.
In order to illustrate the equity of the proposal of Gaz Métro, let us imagine a hypothetical situation in
which the TCPL transmission system starting from Saint-Polycarpe is the first point of delivery on the
TCPL transmission system of the southern zone of the Gaz Métro territory (and now the only point of
delivery on the TCPL transmission system for the southern zones in our example), as well as the TQM
transmission system, belong to Gaz Métro. In this case, there would have been only one consumption
zone, that is to say the Gas Métro territory (exemption made to the northern zone). The gas delivered
within the territory and intended for the Gaz Métro customers, irrespective of the receipt point, would
have been regarded within the territory as natural gas arriving from outside the territory (Western
Canadian) by the Saint-Polycarpe delivery point on TCPL. In both cases, whether the gas comes from
within the territory or outside the territory of Gaz Métro, the producer would not have to bear the costs of
the existing transmission system of Gaz Métro because he does not use it. It is the consumer customers
who use it and who must bear its expenses. Still from this example and in the case in which the point of
delivery would be outside the Gaz Métro territory, gas would be routed up to the Saint-Polycarpe
interconnection point of the TCPL transmission system and the producers should then bear the Gaz
Métro transmission costs because the gas system would be used by those as means of transmission in
order to route the gas outside the territory. In this case, the consumer customers do not use the system
and do not have to bear its expenses.
In conclusion, it would be unfair to make the existing transmission system of Gaz Métro charge a
customer who produces natural gas inside the territory and delivers in the Gaz Métro territory and not to
make this same transmission system charge a producer whose gas is coming from outside the territory
and is also delivered in the territory. In both cases, the transmission system of Gaz Métro is not used by
the producers but by the consumer customers and they alone must bear its costs.
Question:
8.2
Please consider the case in which 2 producers share the same injection point. The first producer exports
natural gas outside the franchise and uses the transmission portion of the Gaz Métro system to reach the
TQM/TCPL system. The second producer sells within the franchise in the injection zone but his natural
gas uses, all the same, the transmission part of the Gaz Métro system for delivering to the customers.
How, from the point of view of equity among the gas producers in Quebec, can one justify that under the
proposal of Gaz Métro, a producer doesn't pay anything for the use of the transmission part of the Gaz
Métro system and the other producer, 0.7 cent/m3?
Original: 10.21.2010
Gaz Métro - 1, Document 1.66
Page 2 of 3
Answer:
Just as in the example provided in the answer to question 8.1, Gaz Métro considers its proposal fair. The
producer who delivers in the territory without using the transmission system of Gaz Métro does not have to bear
its expense. Gaz Métro considers that the costs of the existing transmission system of Gaz Métro must be
entirely allocated to the consumer customers, as for the natural gas currently coming from outside the territory,
because it is they who use the transmission system.
For more details, see the answer to question 8.2 above as well as the answer to question 7.1 of the Régie in the
Gaz Métro-1, Document 1.7 document.
Original: 10.21.2010
Gaz Métro - 1, Document 1.66
Page 3 of 3
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
Reference: Gaz Métro-1, Document 1.23, page 1
Preamble:
“Theoretically, once the initial investments are completely amortized, the rate applicable at the receipt point
should be adjusted downwards and thus permit recovering only the distribution costs not related to the gas
system. On the other hand, the reality is likely to be slightly different. In fact, the initial rates of amortization of
the pipelines will probably be readjusted along the way following changes to the useful lifespan of the
pipelines. For example, if five years are remaining in the amortization period but the customer signs a new
agreement and wishes to inject gas from the 15th to the 25th year, Gaz Métro will re-examine the amortization
period of the asset as well as the rate applicable to the receipt point.”
Question:
9.1
Please confirm that the lifespan of a connection pipeline could be amortized over a period exceeding 20
years in certain circumstances.
Answer:
Yes. Gaz Métro proposes to initially amortize the connection pipelines over a 20-year period, which is the
estimated lifespan of use of a production site. If additional information about the lifespan of the wells was
obtained and it justified a revision of the useful lifespan of the pipeline to serve certain wells, Gaz Métro
could then revise the amortization period.
Moreover, the amortization period could be the subject of debate during specific requests for investment
if the characteristics of the project require a shorter or longer period. The Régie can rule on the
determination of the amortization period during the requests for investment.
Question:
9.2
If yes, please indicate what will be the effect, on the tariff break-even point and the inherent risk to the
project for the consumer customers, in a situation in which the lifespan of the pipelines becomes longer
than 20 years.
Original: 10.21.2010
Gaz Métro - 1, Document 1.67
Page 1 of 2
Answer:
A higher amortization period would imply a longer tariff break-even point since Gaz Métro proposes to fix
the rate applicable to the receipt point in order to recover the revenues necessary over a period equal to
the envisaged lifespan of the assets (that is to say, a tariff break-even point equal to the lifespan of the
asset for the costs of category A).
According to the initial contract and indemnity, Gaz Métro notes that the residual risk is equal to the risk
of failure. This risk for the consumer customers would not be substantially modified since the producers
should, all the same, sign a 10-year contract and should pay an indemnity if they do not renew their
contract and this, until the tariff break-even point is reached, at which point the consumer customers will
have been entirely compensated.
Question:
9.3
Please indicate what is the maximum lifespan which could be used to amortize the initial investment.
Answer:
Gaz Métro does not have this information. Amortization can be based either on the estimated lifespan of
the operation of a production site (as proposed by Gaz Métro) or over the lifespan of the pipeline itself (if
it is used until the end of its lifespan). The amortization of the majority of the pipelines of the gas system
is 40 years at present, that is to say, the estimated lifespan of these pipelines. It would be very surprising
if a lifespan longer than the lifespan of the current pipelines of the system is used.
Question:
9.4
Please indicate if, on the contrary, certain circumstances could justify that the amortization period is less
than 20 years. Please elaborate.
Answer:
Yes. Gaz Métro proposes to initially amortize the connection pipelines over a 20-year period. If additional
information over the lifespan of the wells was obtained and it justified a revision of the useful lifespan of
the pipeline to serve certain wells, Gaz Métro could revise the amortization period downwards. See also
the answer to question 9.1.
Original: 10.21.2010
Gaz Métro - 1, Document 1.67
Page 2 of 2
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
References: (i) Gaz Métro-1, Document 1.40, page 1
(ii) Gaz Métro-1, Document 1.20, page 2
Preamble:
Reference (i):
“The allocation factors can be linked directly (output on the rate base) or indirectly (administration expenses)
according to the investments. The allocation factors which vary according to the revenue or volumes also have
a link, but indirectly with the investments.”
Question:
10.1
For each cost which has been identified as belonging to category “C”, among those listed in reference
(ii), please indicate what is the proportion related to the investments.
Answer:
Approximately 45% (that is to say, $73 M/$161 M) of the costs of category C are identified as being
related to the investments.
The costs which are a function of the allocation factors IMMOBILD (capital assets) and BASETARD (rate
base) allocate 100% of the costs based on the investments.
The allocation factor EXPLOITD is a derived factor which allocates the cost of the administration
expenses according to the same distribution as all the other costs of the operating expenses. The
operating expenses are composed of a set of costs, three of which are related to capital costs:
Mainlines:
$13 820 000
Connections and deflections:
$ 5 206 000
Meters and regulators:
$ 3 364 000
Total:
$ 22 390 000
Thus, $22 M out of $74 M ($156 096 000 - $81 122 000) are costs associated with investments, that is to
say, 30% of the operating expenses.
Original: 10.21.2010
Gaz Métro - 1, Document 1.68
Page 1 of 2
TABLE OF FONCTIONNALISATION AND CLASSIFICATION - 2008/2009 BUDGET
Distribution Costs
2008/2009 BUDGET
Unaccounted for system gas
2008/2009
BUDGET TO BE
SHARED
Costs related to
investments
% related to
investments
ALLOCATION
FACTORS
7 190 000
0
FB01D
13 820 000
0
CONDPRIN
Connections and deflections
5 206 000
0
FS21
Meters and regulators
3 364 000
0
81 122 000
1 666 000
81 122 000
0
Mainlines
Administration expenses
Electricity transmission
Mercaptan and others
FS22
24 226 019
30% EXPLOITD
FB01D
300 000
0
FB01D
Amortization of deferred charges
1 300 000
0
FB07D
Compressed Biogas
1 040 000
0
12 155 000
12 155 000
0% FB08
Contracts, customer calls and orders
4 796 000
4 796 000
0% FS23
Subscriber billing
4 125 000
4 125 000
0% FS25
Credit and collection
2 830 000
2 830 000
0% FS29
Bad debt provisions
1 010 000
1 010 000
0% FS26
Other charges – subscriber billing
1 749 000
1 749 000
0% HALF-VALUE LAYER
Sales and entertainment expenses
10 581 000
0
3 842 000
0
156 096 000
14 282 000
107 787 000
0
24 226 019
0
1 892 000
0
0
FEE
37 957 000
0
0
FB01FV
(16 358 000)
0
CONDPRIN
45 709 000
0
CONDPRIN
Land and rights-of-way
684 000
0
CONDPRIN
Civil portion of gates
530 000
0
CONDPRIN
3 626 000
0
CONDPRIN
25 315 000
0
FS21-A
6 559 000
0
19 911 000
272 000
19 911 000
0
19 911 000
100% IMMOBILD
Biogas
86 248 000
(656 000)
13 192 000
13 350 000
19 911 000
(656 000)
13 192 000
0
19 911 000
(656 000)
13 192 000
100%
100% BASETARD
100% BASETARD
MODERATED
Customer service
Publicity expenses
TOTAL OPERATING EXPENSES
GLOBAL ENERGY EFFICIENCY PLAN
ENERGY EFFICIENCY FUNDS
GREEN FUND
Contributions
Mainlines
Delivery and regulation stations (regulation equipment)
Connections and deflections
Meters and regulators
General installations
Biogas
TOTAL AMORTIZATION EXPENSES
Provision for self-insurance
IT development - amortization
Recovery of account stabilization
NTGC Patent
Biogas
FS27
FS28
22%
PGEE
FS22-A
13 000
0
BASETARD
Tax contributions
(860 000)
0
REVBRUTD
Subsidy - P.R.C.
18 802 000
0
PRCA
5 000
0
PAIRE
2 773 000
0
PGEE
Expenses 1st establishment
113 000
0
Termination payments
Expenses of the interveners
Duty to the Régie
1 562 000
1 368 000
1 214 000
1 562 000
1 368 000
0
(8 006 000)
0
REVREQ
1 556 000
0
EXPLOITD
13 271 000
0
TOTAL AMORTIZATION OF DEFERRED CHARGES
Gas system tax
Capital tax
Capital tax - Green fund
Transmission system
Places of business
Duty to the building/energy régie
TOTAL TAXES AND DUTY
Income tax
57 697 000
11 851 000
4 382 000
15 000
2 448 000
1 424 000
4 937 000
25 057 000
27 432 000
15 466 000
0
452 263
0
0
1 424 000
0
1 876 263
2 831 238
Income tax - Green fund
Tax connected to the sharing of the productivity gain
TOTAL INCOME TAX RELATED TO RETURN
Tax on temporary and other differences
97 000
562 000
28 091 000
4 307 000
0
0
2 831 238
0
4 307 000
1 000 000
62 000
1 062 000
412 689 000
124 318 000
537 007 000
1 638 631 000
0
0
0
0
147 871 501
12 830 777
160 702 278
169 122 000
Subsidy - P.A.I.R.E.
Global energy efficiency plan
Over-payment 2003
Reduction in operating expenses
Green fund
TOTAL INCOME TAX NOT RELATED TO RETURN
CASEP – subsidy for using less polluting energies
Rebate on consumption
CONSUMPTION AND OTHER REBATES
SUB-TOTAL DISTRIBUTION COSTS
RETURN ON RATE BASE
TOTAL DISTRIBUTION COSTS
RATE BASE
Original: 10.21.2010
IMMOBILD
1 562 000
0
100% IMMOBILD
0% FS31
FB01D
FB01FV
14 098 000
452 263
1 424 000
1 876 263
91%
REVBRUTD
100% BASETARD
BASETARD
CAUCPA
100% IMMOBILD
FB01D
100%
0% REVNETD
REVNETD
REVNETD
0
0%
0
0%
IMMOBILD
CASEP
PRC
0
60 111 283
12 830 777
72 942 060
169 122 000
0%
41%
100% BASETARD
45%
100%
Gaz Métro - 1, Document 1.68
Page 2 of 2
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 1 dated October 14, 2010
Inquiry from:
Régie de l’énergie
Reference: Gaz Métro-1, Document 2.11, page 3
Preamble:
« Why is there a requirement in Gaz Métro's definition that the natural gas is injected into the gas
system for transportation and distribution given that gas could be delivered at a Receipt point for
delivery outside the territory of Gaz Métro and as such, the gas would not be "distributed" by Gaz
Métro? (nous soulignons)
Answer:
The definition of “Producer” should be read in the following manner: “Customer who injects natural gas in
the gas system in order to allow its transmission and/or distribution” (we have underlined for emphasis)
Question:
11.1 Please explain in what way the transport up to a point of interconnection with the TCPL / TQM
network of natural gas that is to be carried outside the Gaz Metro franchise, is an activity that falls within
Gaz Métro’s exclusive distribution rights.
Answer:
We refer the Régie to Gaz Metro's response to question 3.1 in the exhibit Gaz Métro-1, Document 1.61.
Original: 10.21.2010
Gaz Métro - 1, Document 2.72
Page 1 of 1
RESPONSE FROM GAZ MÉTRO TO A REQUEST FOR INFORMATION
Origin:
Request for information No. 2 dated October 14, 2010
Inquiry from:
Régie de l’énergie
Reference: Gaz Métro-1, Document 2.35, page 1
Preamble:
“Then, two distinct analyses have been made. The first relates to an analysis to obtain the part of the costs of
the gas system ascribable to the transmission function (cost of category C). The second relates to the
distribution costs not related to the gas system (cost of category B) but in which producers must bear a part of
the costs all the same.”
Question:
12.1
Please confirm that Gaz Métro makes a correct reference to the cost of category B, when it mentions the
analysis to obtain the part of the costs of the gas system ascribable to the transmission function and that
it refers to the cost of category C when it deals with the analysis of the distribution costs not related to the
gas system.
Answer:
Gaz Métro confirms that it refers to category B when it mentions the part of the costs of the gas system
ascribable to the transmission function and that it refers to category C when it deals with the analysis of
the distribution costs not related to the gas system.
Original: 10.21.2010
Gaz Métro - 1, Document 2.73
Page 1 of 1