W E I S B E R G L A W C O R P O R A T I O N

2730 Ailsa Crescent

North Vancouver, B.C. V7K 2B2 Reply to: Fred J. Weisberg

Telephone: (604) 980 – 4069 Fax: (604) 980 – 6357 Email: weislaw@shaw.ca BY E-MAIL AND COURIER July 16, 2007 Attention: Robert Pellatt Commission Secretary British Columbia Utilities Commission 6th Floor, 900 Howe Street Vancouver, B.C. V6Z 2N3 Dear Sirs/Mesdames: Re: Heiltsuk Tribal Council and Shearwater Marine Limited (“Heiltsuk/Shearwater”) Complaint Pursuant to Section 25 of the Utilities Commission Act

We are writing on behalf of our clients the Heiltsuk/Shearwater to register a complaint regarding Central Coast Power Corporation (“CCPC”) and BC Hydro pursuant to section 25 of the Utilities Commission Act R.S.B.C. 1996, c. 473 (“Act”) alleging unreasonable or unreasonably discriminatory service by Central Coast Power Corporation (“CCPC”) to BC Hydro and by BC Hydro to its customers in the “Bella Bella Non-Integrated Area”.

We submit that matters at issue in the BC Hydro 2007 Rate Design Application proceeding (“2007 RDA”) have given rise to reasonable, well-founded concerns that the combination of service:

1. By CCPC to BC Hydro and CCPC’s other customers in Ocean Falls; and

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2. By BC Hydro to CCPC (i.e. CCPC purchases back-up supply from BC Hydro under an Interruptible Electricity Supply Agreement.1) and BC Hydro’s customers in Waglisla and Shearwater

results in unreasonable or unreasonably discriminatory service received by customers in Waglisla and Shearwater from BC Hydro, and from CCPC through its service to BC Hydro exclusively on their behalf. Background

The writer, counsel for the Heiltsuk/Shearwater, has made oral submissions regarding the section 25 complaint in the public hearing of the 2007 RDA. In light of submissions made by Mr. Christian and Mr. Fulton on Friday, July 13, 20072, we are filing this complaint to provide greater certainty.

Statutory Basis for this Complaint

Commission Order No. G-30-02 confirms that CCPC is not exempt from Section 25 of the Act, which states:

“Commission may order improved service 25 If the commission, after a hearing held on its own motion or on complaint, finds that the service of a public utility is unreasonable, unsafe, inadequate or unreasonably discriminatory, the commission must (a) determine what is reasonable, safe, adequate and fair service, and (b) order the utility to provide it.” (emphasis added)

BC Hydro is subject to full regulation, including section 25 of the Act, by the Commission.

Basis for Finding Unreasonable or Unreasonably Discriminatory Service

A considerable amount of evidence regarding the circumstances of CCPC and BC Hydro’s service arrangements has been adduced in the 2007 RDA and issues related to those arrangements have been significantly expanded and refined in the Commission Panel’s Hearing Issues List.3 The evidence and issues that support a finding of unreasonable or unreasonably

1 2007 RDA, Exhibit B-37, p. 2. 2 2007 RDA T6, p. 1036, l. 26 – p. 1040, l. 21. 3 2007 RDA Exhibit A-23.

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discriminatory service from BC Hydro and CCPC in the “Bella Bella Non-Integrated Area” include the following:

1. Unreasonable or unreasonably discriminatory service resulting from the combination of service from two public utilities may be somewhat less apparent at first glance. However, that complicating circumstance does not preclude a finding of unreasonable or unreasonably discriminatory service.

2. It is unfair and unjust for two public utilities, both subject to regulation by the

Commission,4 to each point to the other when issues of unreasonable or unreasonable discrimination arise in respect of their combined service. At the suggestion that rates and service in Waglisla and Shearwater are unreasonable or unreasonably discriminatory, both BC Hydro and CCPC are quick to point out factors beyond their control. BC Hydro can’t stop CCPC from charging some of its Ocean Falls customers rates that are equal to or below BC Hydro’s Zone I rates for similar service. CCPC can’t stop BC Hydro from charging rates that customers in Waglisla and Shearwater believe are excessive, inappropriately based on diesel generation costs, unfair, unjust, unreasonable or unreasonably discriminatory. Apparently, neither public utility feels it must address the concerns, and the customers in Waglisla and Shearwater are frustrated in their efforts to seek relief.

3. The Heiltsuk/Shearwater assert, and expect that the evidence in the 2007 RDA will

establish, that Ocean Falls (i.e. the location of CCPC’s hydroelectric plant) is within the “Bella Bella NIA”. If so, it appears that CCPC’s service territory is wholly within BC Hydro’s service territory.

4. The Heiltsuk/Shearwater assert, and expect that the evidence in the 2007 RDA will

establish, that CCPC’s transmission line to the substation serving Waglisla and Shearwater is wholly within BC Hydro’s service territory.

5. Order G-30-02, section 1 establishes specific limits on the negotiated rates that may be

charged by CCPC to “industrial customers”. Is BC Hydro an “industrial customer” within the meaning of that term in Order G-30-02? If so, why hasn’t BC Hydro, as the most obvious Transmission Service customer of CCPC, negotiated rates from CCPC that don’t exceed BC Hydro’s Rate Schedule 1823 (formerly 1821)?

6. Order G-30-02 establishes that CCPC’s “industrial customers” are to be charged

negotiated rates that don’t exceed BC Hydro Rates Schedules 1200, 1201, 1210, and 1211. Those four Rate Schedules apply to General Service 35 kW and Over.5 Therefore, CCPC is permitted to charge its industrial customers rates that may be lower than Zone I

4 Although CCPC has a limited exemption. 5 2007 RDA, Exhibit B-1, Appendix D, pages 6-7.

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rates. BC Hydro’s industrial customers in Waglisla and Shearwater are charged the Special Contract rate, which is higher than any other rate charged by BC Hydro in BC, with the exception of a penalty rate charged to irrigation customers for pumping water in winter!6 We submit that the glaring disparity between one set of customers paying what may be the lowest rate in BC for that class of service, and another group of customers paying what is the highest (non-penalty) rate in BC for similar service, and both sets of customers in adjacent communities physically connected by a transmission line are served by electricity generated at the same facility, is more than sufficient in itself to justify a finding of unreasonable or unreasonably discriminatory service by BC Hydro and CCPC in the “Bella Bella NIA”.

7. Would the rates available to CCPC’s “industrial customers” be commercially possible if

not for the reliable flow of revenue for over twenty years from customers in Waglisla and Shearwater paid to BC Hydro, and in turn paid to CCPC?

8. Why does there appear to be no public explanation of or justification for the disparity in

rates charged by CCPC to its customers in Ocean Falls and by BC Hydro to its customers in Waglisla and Shearwater for the same class of service supplied by the same hydroelectric plant in the same Non-Integrated Area?

9. What rationale, if any, exists that would justify apparently unreasonable or unreasonably

discriminatory service from two public utilities that are:

• not integrated to any supply or load outside of the “Bella Bella NIA”; • but physically integrated with each other by a transmission line; and • are each a customer of the other (i.e. CCPC purchases back-up supply from BC

Hydro under an Interruptible Electricity Supply Agreement.7 BC Hydro purchases supply from CCPC to serve customers in Waglisla and Shearwater.)

Requested Relief In light of the concerns identified and discussed above, the Heiltsuk/Shearwater respectfully ask the Commission to act on this complaint by specifically examining whether BC Hydro’s and CCPC’s service or the combination of service in the “Bella Bella NIA”, which we assert includes Ocean Falls, is unreasonable or unreasonably discriminatory. We respectfully submit that if the Commission finds service by CCPC, BC Hydro, or both in combination is unreasonable or unreasonably discriminatory, section 25 of the Act requires that the Commission must determine what is reasonable and fair service and order one or both utilities to provide it. We respectfully submit that the net result of such orders should be that BC Hydro charges rates in the “Bella

6 2007 RDA, T6, p. 932 l. 26 – p. 933, l. 7. 7 2007 RDA, Exhibit B-37, p. 2.

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Bella NIA” no higher than its Zone I rates and consistent with Order G-30-02 provides for negotiated rates that may be lower than Zone I rates. Process

In the event that the Commission conducts the requested examination of alleged unreasonable or unreasonably discriminatory service, we submit that such examination should take place in the second oral phase of the 2007 RDA. If an examination takes place in a separate proceeding, we are concerned that receipt of some information and availability of relief pursuant to section 25 of the Act required to make the Heiltsuk/Shearwater’s case in the 2007 RDA may be frustrated by differences in the timing of the two proceedings.

We also observe that the majority of the evidence in support of this complaint already is, or is anticipated to be, on the record in the 2007 RDA. Further, we note that CCPC is now a late Intervenor in the 2007 RDA.

We look forward to receipt of the Commission’s directions with respect to the status of and process for this complaint.

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The Heiltsuk/Shearwater wish to reserve the right to make further submissions, as directed by the Commission with respect to the matters discussed herein. Yours truly, (original signed by) Fred J. Weisberg Barrister & Solicitor Weisberg Law Corporation cc. BC Hydro

Registered Intervenors in 2007 RDA Mr. A. Knott, CCPC