SURREY, BC, May 13, 2013 /CNW/ - FortisBC utilities, indirect and wholly
owned subsidiaries of Fortis Inc., (TSX: FTS) announced they have received the British Columbia Utilities Commission
(BCUC) decision on the first phase of the BCUC's generic cost of
capital review for B.C. utilities.
The rate of return on equity (ROE) for FortisBC Energy Inc. has been set
at 8.75%, effective January 1, 2013. Additionally, the common equity
component in capital structure for rate-making purposes has been set at
38.5%, effective January 1, 2013. The ROE and common equity component
in capital structure will remain in effect through December 31, 2015.
Effective January 2014, the BCUC is also introducing an automatic
adjustment mechanism (AAM) to set the ROE on an annual basis for
FortisBC Energy Inc. The AAM will take effect when the actual long-term
Government of Canada bond yield exceeds 3.8%. The formula will be in
effect until December 31, 2015.
The BCUC maintained FortisBC Energy Inc. as the benchmark for
calculating the ROE allowed for certain B.C. utilities. The ROE for
FortisBC Inc., FortisBC Energy (Vancouver Island) Inc. and FortisBC
Energy (Whistler) Inc. will be impacted by this decision (these
utilities along with FortisBC Energy Inc. are referred to as the
"FortisBC utilities" herein.) The allowed ROE for these utilities, as
of January 1, 2013, will reflect the benchmark 8.75% allowed ROE and
the risk premiums associated with each of these utilities.
As part of the Generic Cost of Capital review, the BCUC has commenced
Phase Two, in which it will determine an appropriate individual risk
premium and capital structure for FortisBC Inc., FortisBC Energy
(Vancouver Island) Inc. and FortisBC Energy (Whistler) Inc.
The decision and orders are available on the BCUC website at www.BCUC.com
FortisBC Energy Inc. is a regulated utility focused on providing safe
and reliable energy, including natural gas, propane and thermal energy
solutions. FortisBC Energy Inc. employs almost 1,550 British Columbians
and serves approximately 843,000 customers in 100 B.C. communities.
FortisBC Energy Inc. is indirectly wholly owned by Fortis Inc., the
largest investor-owned distribution utility in Canada. FortisBC Energy
Inc. owns and operates approximately 40,000 kilometres of natural gas
transmission and distribution pipelines. Fortis Inc. shares are listed
on the Toronto Stock Exchange and trade under the symbol FTS.
Additional information can be accessed at www.fortisinc.com or www.sedar.com.
FortisBC Inc. is a regulated utility focused on providing safe and
reliable electricity at the lowest reasonable cost. FortisBC Inc.
employs over 500 British Columbians and serves approximately 163,000
direct and indirect customers in B.C.'s South Interior. FortisBC Inc.
is indirectly wholly owned by Fortis Inc., the largest investor-owned
distribution utility in Canada. FortisBC Inc. owns and operates four
regulated hydroelectric generating plants, as well as approximately
7,000 kilometres of transmission and distribution power lines. Fortis
Inc. shares are listed on the Toronto Stock Exchange and trade under
the symbol FTS. Additional information can be accessed at www.fortisinc.com or www.sedar.com.
For further information:
Joyce Wagenaar, Director of Communications