GAZIFÈRE INC.
PRE-FILED EVIDENCE OF JACKIE COLLIER AND ANTON KACICNIK
2006 RATE CASE
Q.1
A.1
Please state your full names, and your current position with the Company.
My name is Jackie Collier, and I am Manager Rate Design, at Enbridge Gas
Distribution Inc. I am Anton Kacicnik, and I am Manager Cost Allocation at
Enbridge Gas Distribution Inc.
Q.2
What are your professional qualifications, experience, and previous
appearances before this or other regulatory tribunals?
Please refer to our Curriculum Vitae filed at GI-2, document 14 and GI-3,
document 5.
A.2
Q.3
A.3
What is the purpose of this testimony?
This testimony addresses the determination of Gazifère’s 2006 Interim rates
and proposed treatment of the 2006 Final Rates. In addition, the evidence
addresses the proposed cost allocation and rate design methodology which
will be applied during their comprehensive performance based regulation
(“CPBR”). Gazifère is proposing a revenue cap mechanism which will be in
effect from 2006 to 2010.
Q.4
A.4
How were the Interim 2006 distribution rates developed?
In its March 31, 2006 decision (D-2006-58), the Régie approved an interim
distribution rate increase of 3% for Gazifère’s 2006 test year. A 3% increase was
applied to Gazifère’s 2005 Board approved delivery revenue to determine the
increase in revenue requirement. The increase in delivery revenue requirement
divided by the 2005 delivery volumes produced the per unit rate adjustments
which were applied to Gazifère’s April 1, 2006 variable delivery rates.
Q.5
How will Gazifère’s Final 2006 rates be developed?
A.5
Gazifère’s final 2006 rates will be based on a CPBR mechanism which is
submitted to the Régie for approval in Phase II of its R-3587-2005 proceeding.
The difference between the interim delivery revenue requirement and the final
delivery revenue requirement generated by the proposed formula will need to
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GAZIFÈRE INC.
PRE-FILED EVIDENCE OF JACKIE COLLIER AND ANTON KACICNIK
2006 RATE CASE
be recovered from customers. Gazifère is proposing to record the difference
in revenue requirement in a deferral account. The deferral account balance
will be disposed of through Gazifère’s 2006 Closing of the Books.
Q6.
Is Gazifère proposing any cost allocation methodology changes as part of its
R-3587-2005 Phase II proceeding.
A6.
Gazifère will continue to use its 2005 Board approved cost allocation
methodology inclusive of the cost allocation approved in the D-2006-58
decision. In Phase I of the R-3587-2005 proceeding, the Régie approved
Gazifère’s proposed cost allocation changes relating to upstream
transportation and load balancing costs effective January 1, 2006. Gazifère
has reviewed its cost allocation methodology and is not proposing any further
changes as part of this proceeding because the approved methodology
accurately reflects cost causality. During the duration of the CPBR term,
Gazifère will continue to monitor its cost allocation methodology and will bring
forth any changes if warranted.
Q.7
How will the rates be designed under the revenue cap from 2007 to
2010?
A.7
The Company will continue to update its gas supply commodity, transportation
and load balancing rates through its quarterly rate change mechanism.
Gazifère is also proposing to maintain its existing methodology for designing
the delivery component of its rates. The delivery component of Gazifère’s
rates will be developed for each test year under CPBR using the results of the
fully allocated cost study (“FACS”).
The test year revenue requirement will be based on the CPBR formula.
Gazifère will continue to internally prepare an operating budget at an account
level for internal management purposes. The total operating budget will equal
the Company’s revenue requirement determined under the formula. The
internal operating budget will not be filed with the Régie during the CPBR
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PRE-FILED EVIDENCE OF JACKIE COLLIER AND ANTON KACICNIK
2006 RATE CASE
period. As a detailed operating budget will be available for internal purposes,
the Company will continue to perform a FACS study based on the test year
forecast of volumes and the detailed operating budget. This will ensure that
cost causality will be maintained during the CBPR period. As the internal
budget will not be filed with the Régie, the detailed results of the fully allocated
cost study will also not be available during the CPBR period. Gazifère is
proposing to only file the allocation of the total cost of service at a rate class
level. The results from the FACS study will be used to design the test year
delivery rates and Gazifère will continue to file all of its current rate design
exhibits.
Q.8
Does this conclude your evidence?
Q.8
Yes.
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