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.