P.U.  9 (2001-2002)

 

 

 

 

IN THE MATTER OF the

PUBLIC UTILITIES ACT,

R.S.N. 1990, c. P-47, as amended

("the Act")                                           

 

        AND

 

IN THE MATTER OF the application by

Newfoundland Power Inc. (“the Applicant”)

for approval of the balance of the Weather

Normalization Reserve as of  December 31, 2000

pursuant to Sections 69(3) and 78 of the Act.

 

 

 

 

 

 

WHEREAS the Applicant is a corporation duly organized and existing under the laws of the Province of Newfoundland and Labrador, is a public utility within the meaning of the Act, and is also subject to the provisions of the Electrical Power Control Act, 1994; and

 

WHEREAS by Order No. 1 (1974) the Board ordered the Applicant to combine the balance of the Degree Day Normalization Reserve, established pursuant to the same order, with the balance of the Hydro Production Equalization Reserve, provided pursuant to Order No. P.U. 32 (1968).  This combined reserve is referred to as the Weather Normalization Reserve; and

 

WHEREAS by Order No. P. U. 6 (2000-2001), the Board approved a negative balance in the Weather Normalization Reserve as at December 31, 1999 in the amount of  $7,361,747; and

 

WHEREAS after inquiry by the Board in 1999, the Applicant commissioned in 2000 a study of its hydroelectric generation systems, the preliminary findings of which  indicated that the normal hydro production of 450 GWh/yr used in the calculations for the Hydro Production Equalization Reserve was too high, and resulted in the Applicant lowering the figure used for normal hydro production from 450 GWh/yr to 431 GWh/yr for 2000; and

 

WHEREAS the final study (Acres Water Management Study) which was filed with the Board in December 2000, indicated that the normal hydro production should be further lowered to 423 GWh/yr; and

 

WHEREAS the Board continues to have concerns with the growing deficit balance in the Hydro Production Equalization Reserve but will monitor the effect of the revised normal hydro production figure for 2001; and

 

WHEREAS the Applicant, based on the calculations attached to the application, has reported to the Board that its combined Weather Normalization Reserve as at December 31, 2000 is a negative balance of $8,739,745; and


WHEREAS the Board is satisfied from the Application and Affidavit that the reserve at December 31, 2000, properly reflects the effect that degree days and hydro equalization have had on the operations of the Applicant from January 1, 2000 to December 31, 2000; and

 

WHEREAS the Board further wishes to review the Weather Normalization Reserve.

 

IT IS THEREFORE ORDERED THAT:

 

1.         The Applicant=s Weather Normalization Reserve of a negative balance of $8,739,745 as at December 31, 2000, be and the same is hereby approved.

 

2.         At their next general rate review, the function and methodology of the Weather Normalization Reserve will be reviewed by the Board whereby the Applicant shall present its views on the function and methodology of the reserve and its proposal for the disposition of the deficit balance contained in the reserve account.

 

 

            DATED at St. John's, Newfoundland, this 26th day of July 2001.

 

 

                                                                                                     

                                                                       

Robert Noseworthy,

Chair & Chief Executive Officer.

 

 

                                                                 

                                             Darlene Whalen, P.Eng.,

                                                                                          Vice-Chairperson

 

 

                                                                                                                                                           

                                                                                          Raymond A. Pollett,

                                                                                          Commissioner.

 

 

                                                                                                                                                           

                                                                                          G. Fred Saunders,

                                                                                          Commissioner.

 

 

                                                                                                

G. Cheryl Blundon,

Board Secretary.

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