I was midway through my reading of Wednesday's transcript when whammo, I hit
the wrong keys, and all of my diligent summarizing and excerpting was lost.
So, instead of getting notes that cover most of Day 3's proceeding, you get
one issue only.
The background is, for three years Steve Miller has been requesting of BC
Hydro at least four things:
- actual historical peak loads
- temperature adjusted peak loads
- methodology for the temperature adjustment
- forecast methodologies and drivers
He has been thwarted continuously, not responded to, given partial, or
incorrect, or misleading answers.
In the GSX proceeding, earlier this year, a table of historical peaks and
temperature adjusted values was provided, and sworn to, under oath. In the
BCUC information requests, BC Hydro also provided those numbers. Then in
April, in Nanaimo, the elusive Henry Mak, BC Hydro's forecasting expert, was
put on the panel to to explain how temperature adjustments and forecasts are
derived.
Shortly after that, Henry Mak was apparently "disappeared" from his
role in
BC Hydro, and on June 8 Dennis Nelson assumed the role as Mak's acting
replacement.
Then, on Monday morning this week, a new set of temperature adjusted figures
were distributed to interveners and made available, with a different
methodology described.
Bill Andrews, counsel for the GSX Concerned Citizens Coalition, tried to
explore this matter on Wednesday.
Bill cites an earlier BCUC decision (in the transcript, page 629)
MR. ANDREWS: "For any future CPCN applications, the Commission expects BC
Gas to use a model which can be independently verified by
intervenors and the Commission."
THE CHAIRPERSON: And what's your question, Mr. Andrews?
MR. ANDREWS: Q: My question is: Does B.C. Hydro take that as a direction to
improve or increase, not to put it pejoratively, to increase the
transparency of its load forecasting.
MR. B.J. WALLACE: Mr. Chairman, clearly this is a comment on a different
applicant's model, and I am not aware that there's been evidence filed with
the Commission casting aspersions on B.C. Hydro's model in this application.
I'm not sure the basis of my friend's question here.
MR. ANDREWS: Perhaps the reference would be to the Miller evidence and to a
considerable amount of testimony and controversy at the GSX hearings, and
continuing in this hearing as to the fundamental proposition which the
intervenor, at least the GSX CCC seeks to support, which
is that Hydro overestimates its peak demand forecast.
THE CHAIRPERSON: The latter issue that you spoke to is an issue for this
panel to hear, so you have already but if you wish to pursue that line of
questioning, you may. You may also pursue the line of questioning that you
raise with respect to transparency. But it doesn't assist this Commission
Panel for you to review previous decisions of the Commission. Speak to the
facts. If you wish to deal with previous decisions of the Commission, do so
in argument.
MR. ANDREWS: Thank you.
MR. ANDREWS: Q: One of the key elements of Hydro's load forecasting, would
you agree, is the weather adjustment of the actuals.
MR. ANDREWS: Q: Well, we're going to get into that in great detail, so the
question is an introduction to the topic, which is to confirm that weather
adjustment has an impact on your load forecasting. Let's put it as neutrally
as we can to get started.
MR. NELSON: A: Weather adjustment for the most recent year affects the
starting point for the peak load forecast, yes.
MR. ANDREWS: Q: Thank you.
MR. NELSON: A: I was not [involved in the evidence provided in the GSX
proceeding]. I obviously reviewed it as we approached the IRs for this
hearing and found that the technique was lacking, and we have made the
appropriate adjustments. We should remind you it has no effect on the
forecast, however, but it does not reflect well on us to have provided those
numbers.
MS. HEMMINGSEN: A: I think I'd like to just add to what Dennis says. ...
when we looked at them further and we looked at them in terms of
how we represent those weather adjustments in our forward forecast, we found
them to be inappropriate.
MR. ANDREWS: Q: And then, without so much as a word of explanation, you
replaced that entire package with a new one that uses a different meaning of
the term weather adjusted actual, correct?
MR. ANDREWS: Q: Do you have two different weather adjusted actual concepts?
MR. NELSON: A: No. We had one before, which was done to answer specific
questions, was done in a logical way. When we looked at it, or when I looked
at it, because I come with a different set of eyes [from the eyes of the now
disappeared Henry Mak], it was not the appropriate tool to use. We would
actually like to not name that one any longer, and that would make this
hearing a lot simpler.
MS. HEMMINGSEN: A: I would just like to clarify that. The information that
we have refiled is consistent. The information that was previously filed was
inconsistent. The new information is consistent. We do not have two bases
for representing weather adjusted values.
MR. ANDREWS: Q: Yes.
MS. HEMMINGSEN: A: As the record stands now.
MR. ANDREWS: Q: That's right, and you presented this information to the GSX
hearing, and your panel swore under -- under sworn testimony that it was
accurate information. And now you're presenting to this Commission
information which I am testing the credibility of. My friend would like
to --
MR. B.J. WALLACE: No, I don't think that was the question, so I don't have
to suggest it's not the answer.
THE CHAIRPERSON: I have asked you, Mr. Andrews, to move on.
Two tables of temperature adjusted peak load. The earlier one, Hydro
doesn't want to talk about anymore, and Chairman Hobbs appears to also not
want Andrews to talk about anymore. The earlier one, helped Hydro's case
that our demand may outstrip supply. The most recent numbers are less than
the earlier ones, on average, showing peak demand that is 68 MW less than
the earlier numbers.
MR. ANDREWS: Q: And that number is 68 megawatts, indicating that on average
the difference between the two weather adjustment methods is 68 megawatts,
correct?
MR. NELSON: A: That's correct.
MR. B.J. WALLACE: ... But getting back into the history of what happened in
the old one and why it's wrong, and we know what the changes were. They've
been explained. I'm not sure where this goes.
MR. ANDREWS: May I respond? Because I believe my friend is under a --
THE CHAIRPERSON: No, no you may not.
MR. ANDREWS: -- misapprehension.
THE CHAIRPERSON: I've already spoken on this issue. I'm not going to speak
on it again. I agree with Mr. B.J. Wallace, and I encouraged you to leave
your questions to the new material that's been filed. ... But it doesn't
help for you to be reviewing what was filed prior to the materials that we'
re dealing with in this proceeding. Deal with the new evidence that's here.
MR. ANDREWS: May I make a submission on the point? Please?
THE CHAIRPERSON: I think we've been through this several times now. ...
And
I think it's in your interests to pursue this on the basis of the new
evidence that's been filed.
Especially galling is this next comment from Dennis Nelson, because the
stuff he says no one picked up on, Miller was picking up on, and trying to
ask questions about and get transparency on, and got nowhere, precisely
because he was stonewalled by BC Hydro.
MR. NELSON: A: Let me just add a little bit to this point. We always tell
people when we teach statistics that you need to look at your data. What we
have for two and a half years was nobody lining up the weather normalized
numbers with the forecasts. The reason we used the actual numbers we start
the load forecast with was that the 30 to 40 adjustment left you with a
number that was about 100 megawatts higher than your average
starting point for the last four years. It's interesting that no one picked
up on this. I apologize for yourselves not picking up on it until we
reviewed
these IRs. But that is why we had to go and get into the basic numbers, as
to how the forecast starts, where does the data come from, what do we build
the entire process on. And that is now what we use to do historical weather
normalization information that people ask for. The fact that no one graphed
the data for two and a half years is unfortunate.
MR. ANDREWS: Q: And I would suggest to you that it was because of Mr. Miller
pursuing the point that you did look at this and did discover what you now
testify to the Commission?
MR. B.J. WALLACE: Mr. Chairman, what possible use is a
response to this question?
MR. ANDREWS: This is an issue of transparency, and Hydro's methodology, we
will argue, and the data they use, is not transparent. And an individual has
been working hard in the face of a lot of opposition from B.C. Hydro for a
number of years to get to the bottom of what exactly is going on with the
weather adjusted data, and what we have just discovered is that when someone
finally looked at what was going on, Hydro's response of "Trust us, we know
what we're doing," turns out to be incorrect, and now they're doing it in
another way. Whether it's better or not, the transparency is something that
Mr. Miller had to work on for a long time, and transparency is the only
method by which the Commission and the public can gauge the accuracy of
Hydro's load forecast on which Hydro would like to add a significant
expenditure to the rate base in British
Columbia. So I submit that this is entirely relevant to the Commission's
inquiry.
THE CHAIRPERSON: This is the third time, Mr. Andrews. This, I hope, will
be
the last time. Your question with respect to Mr. Miller and the impact he
has had on the evidence that's before this Panel is not helpful ....
Andrews eventually gets to the point at which historical data, actual and
adjusted, ends, and forecasts begin. Here, picture yourself as Mario in a
computer game where you have to leap to get to the next level.
MR. ANDREWS: Q: Turning to the use of a weather adjusted actual as a
starting point for the forecasting, can you -- is that it appears to be true
that the first forecasted number is substantially higher than the weather
adjusted actual. Is that correct?
MS. HEMMINGSEN: A: Which first forecasted number are you referring you?
MR. ANDREWS: Q: In any of the forecasts.
MR. NELSON: A: Yeah, when we look at page 4 of 4 on your 1.2, the
resubmission, the only place we see an actual peak number and a forecast
number adjacent to each other is for 2001-2002 we have an adjusted peak
actual of 2,066 megawatts; and for the forecast for 2002-2003 we
have a forecast of 2152.
MR. ANDREWS: Q: Direct your attention to the revised
MR. ANDREWS: This is an issue of transparency, and Hydro's methodology, we
will argue, and the data they use, is not transparent. And an individual has
been working hard in the face of a lot of opposition from B.C. Hydro for a
number of years to get to the bottom of what
exactly is going on with the weather adjusted data, and what we have just
discovered is that when someone finally looked at what was going on, Hydro's
response of "Trust us, we know what we're doing," turns out to be
incorrect,
and now they're doing it in another way. Whether it's better or not, the
transparency is something that Mr. Miller had to work on for a long time,
and transparency is the only method by which the Commission and the public
can gauge the accuracy of Hydro's load forecast on which Hydro would like to
add a significant expenditure to the rate base in British Columbia. So I
submit that this is entirely relevant to the Commission's inquiry.
THE CHAIRPERSON: This is the third time, Mr. Andrews. This, I hope, will be
the last time. Your question with respect to Mr. Miller and the impact he
has had on the evidence that's before this Panel is not helpful to this
proceeding. So I agree with --
MR. ANDREWS: I take that as a ruling.
THE CHAIRPERSON: I agree with Mr. B.J. Wallace. Please do not ask the
question. There is room for you here with respect to the new evidence that's
been filed. If you wish to challenge the statistical basis that's being
presented in the revised materials, that's one thing. But
endeavouring to challenge the witness panel with respect to the changes that
you're seeing between the revised material and the original material is not
helpful. That's the third time that I've said that. Now, I encourage you at
this stage, Mr. Andrews, to follow my suggestion.
MR. ANDREWS: Well, I will endeavour to, and I will say in my defence that I
had not anticipated that asking that question was inconsistent with your
previous rulings, and I accept your ruling on this point.
THE CHAIRPERSON: Thank you.
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