FortisBC utilities receive BCUC return on equity and capital structure decision

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.

 

SOURCE: FortisBC

MEDIA CONTACT:
Joyce Wagenaar, Director of Communications
FortisBC
[phone]
Email: [email protected]
fortisbc.com