7 July 2006 Mr. Robert J. Pellatt Commission Secretary British ...

Marcel RegheliniDirector, Regulatory AffairsPhone: 604 699-7331Fax: 604 699-7537E-mail: marcel.reghelini@bctc.com7 July 2006Mr. Robert J. PellattCommission SecretaryBritish Columbia Utilities CommissionSixth Floor, 900 Howe StreetBox 250Vancouver, BC V6Z 2N3Dear Mr. Pellatt:Re: British Columbia Transmission Corporation (“BCTC”)Transmission Revenue Requirement Application – Project 3698424Responses to BCUC Information Request No. 1BCTC provides the remaining eleven responses to BCUC Information Request No. 1:16.0, 21.0, 34.2.2, 35.3, 35.4, 42.2, 53.3, 57.0, 61.0, 65.4 and 65.5.BCTC also files an amended response to BCUC IR 1.35.2 to correct numbers in the“F2006 Actual” column.EnclosureCopy: Registered IntervenorsSincerely,Original signed by:Marcel RegheliniDirector, Regulatory AffairsBritish Columbia Transmission Corporation,Suite 1100 Four Bentall Centre, 1055 Dunsmuir Street,Vancouver, BC V7X 1V5www.bctc.com

British Columbia Utilities CommissionInformation Request 1.16.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application16.0 Reference: Exhibit B-1 Section 4, page 40 – Detailed Transmission RevenueRequirement SummaryRESPONSE:Please explain the significant increase in BCTC’s F2006 forecast allowedreturn compared to F2006 Approved. Please explain the decrease inBCTC’s F2006 forecast OMA compared to F2006 Approved. WereF2006 activities postponed to F2007?The F2006 forecast allowed return on line 3, column (e) of Table 4-2 is incorrectly statedas $13.3 million. The correct value is $12.6 million. BCTC will file a corrected version ofTable 4-2.Table 1 provides the forecast variance in allowed return by cost item.Table 1 – Increase in Allowed Return by Cost ItemLineNo.$ millionsF2006ApprovedF2006ForecastImpact onAllowedReturn1 OMA 166.2 155.8 10.4 (a)2 Finance Charges 0.5 1.1 (0.6) (b)3 Cost of Market 5.8 4.7 1.1 (c)4 Depreciation & Amortization 21.5 20.1 1.4 (d)5 Grants & Taxes 0.3 0.3 -6 Less Non-OATT Revenue and Recoveries (35.2) (36.7) 1.5 (e)7 Less: Transfer to Deferral Accounts (4.8) (f)8 Increase in Allowed Return 9.0The F2006 forecast allowed return of $12.6 million is $9.0 million higher than the F2006approved return of $3.6 million due to the following factors:(a) Please refer to the explanations following Table 2 regarding the $10.4 million OMAvariance. $3.7 million of this variance is transferred to the deferral accounts.(b) The F2006 approved finance charge was based on forecast interest on deemed debtwhereas the F2006 forecast amount is based on accounting cost. The $1.1 millionforecast finance charge change reflects lower interest during construction as a resultof lower SCMP capital expenditures and interest on deferral accounts. As explainedin (e) below, BCTC also earned higher investment income.(c) Cost of market is lower due to reduced customer demand for Loss CompensationServices. The variance is transferred to the Cost of Market deferral account.(d) Depreciation expense is lower due to lower than expected accelerated depreciationon existing control center assets partially offset by higher depreciation on otherexisting assets.Note

British Columbia Utilities CommissionInformation Request 1.16.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application(e) Non-OATT Revenue and Recoveries are higher due to higher investment incomeassociated with higher than forecast cash available for short term investment.The major items contributing to the $10.4 million decrease in BCTC’s F2006 forecastOMA compared to F2006 Approved are summarized below in Table 2.Table 2 – F2006 Forecast OMA Compared to F2006 Approved OMA1 $millions2 F2006 Forecast $ 155.83 Favourable Cost Variances (excludes transfers to deferral accounts)4 Maintenance costs 2.25 Legal 1.27 Key Agreement Implementation 0.38 System Operations 2.69 System Planning 1.210 Other costs 0.411 Unfavourable Cost Variances (excludes transfers to deferral accounts)12 Grid West loan write-off (0.9)13 Insurance (0.3)14 Other costs -15 Transfers to Deferral Accounts16 Regulatory actual spending compared to annual Plan 1.717 Grid West actual spending compared to annual Plan 0.718 Emergency maintenance funding actual spending compared to annual Plan 1.319 F2006 Plan $ 166.2Maintenance - $2.2 million favourableMaintenance variance is primarily attributable to the capitalization of costs forrefurbishing gas insulated switchgears and airblast circuit breakers.Legal - $1.2 million favourableLegal expenses were lower than expected due to lower than anticipated costs for claimsmanagement, OATT implementation and the delay in the Accenture Business Servicescontract re-negotiation until F2007.Key Agreement Initiative - $0.3 million favourableExpenditures under the Key Agreement Implementation initiative were $0.7 millioncompared to a Plan of $1.0 million.

System Operations - $2.6 million favourableBritish Columbia Utilities CommissionInformation Request 1.16.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement ApplicationApproximately $1.8 million is due to work not performed due to resource constraints byBC Hydro and ABSU service providers. A further $0.5 million in work was reduced inscope in F2006 and $0.3 million in membership costs were favourable due to the reversalof a F2005 year end accrual and stronger Canadian dollar.System Planning - $1.2 million favourableApproximately $1.2 million relating to work not performed due to BCTC resourceconstraints caused by increased workload associated with interconnection studies andthe BC Hydro Open Call for Power. This internal resource constraint resulted in lesssurvey and investigation work being assigned to BC Hydro Engineering Services. Thework will be addressed in F2007.Grid West Loan Write-off - $0.9 million unfavourableBCTC provided funding to Grid West as part of its participation in Grid West. In January2006 BCTC decided to suspend funding for the next phase of Grid West’s development.On April 11, 2006, Grid West Board of Directors voted to dissolve the corporation andwind-up affairs. Grid West currently has few tangible assets that would serve ascollateral for the outstanding loans. As a result of these events BCTC decided to writeoff the loan in F2006. See Section 13.2 of the Application for more information.Insurance expense - $0.3 millionForecast insurance expense was higher than planned based on additional premiums toextend coverage to the end of the fiscal year. BCTC’s insurance coverage waspreviously based on a year ending December 1 and BCTC revised the coverage period tomatch the fiscal year period.Transfers to Deferral AccountsARegulatory - $1.7 millionThe F2006 annual budget for Regulatory expenditures was $3.3 million. Asdescribed in Section 12.2.4 the transfer to the Regulatory Deferral Account waslargely as a result of expenses that were planned as OMA but charged to capitalas they related to VITR. Reflecting on the experience gained in F2006, theRegulatory F2007 expenses have been budgeted to support the expected level ofnon-capital activity.BGrid West - $0.7 millionThe F2006 annual budget for Grid West expenditures was $1.5 million. Asdescribed in Section 12.2.5 and Section 13 of the Application, the transfer to theGrid West Deferral Account was largely the result of BCTC’s decision to suspendthe funding of the next phase of Grid West development. BCTC does not plan to

British Columbia Utilities CommissionInformation Request 1.16.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Applicationincur costs for Grid West in F2007 and has not included any Grid West costs in itsdetermination of the F2007 revenue requirement.CEmergency Maintenance - $1.3 millionThe F2006 annual budget for Emergency Maintenance was $2.0 million. Asdescribed in Section 12.2.2, the transfer to the Emergency Maintenance DeferralAccount is a result of BCTC experiencing one incident requiring the use of theemergency maintenance funding. Use of the annual budget for EmergencyMaintenance varies from year to year and has averaged $2.8 million over the lastfive years; as such BCTC continues to budget for Emergency Maintenance at theF2006 level of $2.0 million.

British Columbia Utilities CommissionInformation Request 1.21.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application21.0 Reference: Exhibit B-1 Section 5 pages 45 and 46 BCH Owner’s RevenueRequirement Cost ComponentsRESPONSE:“ii the transfer of approximately $150 million in substation distribution and otherassets in F2005 from Transmission to Distribution within BC Hydro which reducesTransmission depreciation expense by $10 million; and”Please provide the cost reductions in the Approved F2006 TotalTransmission Cost by cost item and the changes in the Total Non-TariffedRevenues and Recoveries by type of Revenue/Recovery in Table 5-1 dueto the transfer of $150 million in substation distribution and other assets inF2005 from Transmission to Distribution.In F2005 and F2006 approximately $150 million in Substation Distribution Assets (SDA)were transferred from Transmission to Distribution within BC Hydro. The other assetsreferenced are of a minor nature and do not materially impact the revenue requirement.These other transfers were Powertech lab assets ($2.9 million net book value) transferredto BC Hydro Corporate and UHF/VHF radio assets ($2.1 million net book value)transferred to Field Services.As a result of the SDA asset transfer certain costs were transferred from Transmission toDistribution. The impact of the transfer of SDAs on the F2006 BCH Owners RevenueRequirement is summarized in Table 1:Table 1 – Impact of SDA Transfer on the BCH Owners Revenue RequirementLineNo.$ millionsF2006Approved(T5-1,col.(d))ImpactSDATransfer toDistributionF2006AdjustedF2007ChangeF2007 SDACharge(a) (b) (c) (d) (e)1 Allowed Return 116.0 (6.6) 109.42 Finance Charges 133.3 (7.6) 125.73 OMA 4.8 - 4.84 Corporate Costs 14.7 14.75 Depreciation and Amortization 134.4 (10.0) 124.46 DSM Amortization 3.6 - 3.67 Grants and Taxes 90.5 - 90.58 497.3 (24.2) 473.19 Less: Non-tariffed revenues and recoveries10 Generation Related Transmission Assets (33.1) - (33.1)11 Substation Distribution Assets (56.5) 26.0 (30.5) 5.2 (25.3)12 Secondary Revenues (3.8) - (3.8)13 Lease Revenues from BCTC and other (0.2) - (0.2)14 (93.6) 26.0 (67.6) 5.2 (25.3)15 BCH Owner's Revenue Requirement 403.7 1.8 405.5 5.2 (25.3)

British Columbia Utilities CommissionInformation Request 1.21.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement ApplicationThe change in the SDA annual charge components is further defined in Table 2:Table 2 – SDA Annual Charge Change by ComponentLineNo.$ millionsF2006SDACharge(Note 1)Change inAllocationMethodology(Note 2)F2006 Est.Impact of SDATransfer(Note 3)F2006 CostAdjMethodologyto Charge forCommonsAssets Only(Note 4)Adjust toF2007 Costs(Note 5)F2007SDAChargeBCH Owner's Cost (a) (b) (c) (d) (e) (f)1 Allowed Return 6.7 7.8 (6.6) (3.2) (0.4) 4.32 Finance Charges 15.2 1.5 (7.6) (3.7) (0.2) 5.23 Corporate Costs 1.7 (0.1) - - (0.1) 1.54Depreciation &Amortization21.7 - (10.0) (4.2) (1.9) 5.65 Grants & Taxes 11.3 - - - (2.6) 8.767 Total 56.5 9.2 (24.2) (11.0) (5.2) 25.3Table 1, L8,Col (b)Table 1, L15, Col (b)$1.8 millionTable 1, L15,Col (d)Note 1:Note 2:Note 3:Note 4:Note 5:Detailed cost components for F2006 SDA charge from BC Hydro Transmissionto BC Hydro Distribution, refer to Table 5-1, line 14, column (d).Revise allocation methodology to be consistent with the BC Hydro’s allocationof Allowed Return, Finance Charges and Corporate costs to Transmission.Estimated impact reflecting the transfer of $150 million net book value for SDA.No change in methodology.F2006 costs, allocation methodology and rate base adjusted to reflectassignment of a portion of forecast expenses relating to common assets toSDA. The transfer of the SDAs impacts the annual charge to Distribution fromTransmission. With the identification and transfer of the SDAs, BCTC and BCHydro also identified those assets that are common to both SDAs andTransmission. Common assets include but are not limited to buswork, land,buildings, fences, gravel and land. The analysis of the substation assets in thecombined transmission and distribution stations indicates a percentage splitof 42.5% for Transmission and 57.5% for Distribution for common stationassets.Detailed cost components for F2007 SDA charge from BC Hydro Transmissionto BC Hydro Distribution, refer to Table 5-1, line 14 column (f). Grants and

British Columbia Utilities CommissionInformation Request 1.21.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement ApplicationTaxes also reflect a reduction due to the refinement of the percentage splitbetween transmission and distribution assets within each station. BC HydroTransmission is charged the total taxes for substations and, in turn, charges aportion of these costs to Distribution through the SDA charge. In F2006Distribution was charged a portion of the asset related expenses for the entiresubstation. The percentage split between transmission and distribution withineach station was determined through an engineering assessment. Thisanalysis produced a split of 63.3% for Transmission and 36.7% for Distribution.In F2007 with the transfer and identification of SDAs and common assets thepercentage split within the substations is 72.7% Transmission and 27.3%Distribution. In F2007 this percentage split impacts the grants and taxesassigned to Distribution for SDAs and common assets.

British Columbia Utilities CommissionInformation Request 1.34.2.2Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application34.0 Reference: Exhibit B-1 Section 9.4.2.1, page 136 - General and AdministrationRESPONSE:“Reclassification of $2.4 million in certain employee benefits and concessioncosts from all the departments to a corporate cost center…”34.2 In F2007, 30% of Business Improvement cost has been allocated to G&Areflecting work activities for risk management while the balance of 70% isassigned to Asset Management / Maintenance whereas in F2006, 100% ofthese costs were assigned to Asset Management / Maintenance.34.2.2 Which area performed these risk management activities in F2006?In F2006, risk management activities were performed by the Financial Service Manager,within Corporate Services, as a General and Administration (“G&A”) cost. Subsequently,through a reorganization, the position of Financial Service Manager was eliminated andthe risk management function was assigned to Business Improvement for F2007. The30% of Business Improvement costs associated with the risk management functioncontinue to be a G&A cost.

British Columbia Utilities CommissionInformation Request 1.35.3Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application35.0 Reference: Exhibit B-1 Section 9, p. 140 - General and Administration – ITBC Hydro F07/F08 Revenue Requirements Application p. 5-20Table 5-6RESPONSE:35.3 Please reconcile and explain ABSU’s total annual costs incurred byBCTC from the question above to Table 5-6 of BC Hydro F07/08Revenue Requirement Application which shows the removal of ABSUcosts for BCTC of $7.8 million in F2006 and F2007.The ABSU baseline cost of $7.8 million as stated by BC Hydro reflects the original cost ofinternal Transmission shared services from BC Hydro’s F2003 budget (i.e.,Transmission’s share of BC Hydro’s cost of performing the services in-house).Please see BCTC’s response to BCUC IR 1.35.2 for BCTC’s costs and an explanation ofchanges to the scope of services provided.

British Columbia Utilities CommissionInformation Request 1.35.4Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application35.0 Reference: Exhibit B-1 Section 9, p. 140 - General and Administration – ITBC Hydro F07/F08 Revenue Requirements Application p. 5-20Table 5-6RESPONSE:35.4 Please explain how and identify where the ABSU cost reduction fromTable 5-6 of BC Hydro’s F07/08 Revenue Requirements Application isreflected in BCTC’s Application.The cost reductions or savings in Table 5-6 of BC Hydro’s F2007/F2008 RevenueRequirements Application relate solely to BC Hydro and are not reflected in BCTC’sapplication. BCTC is operating under the terms of the BC Hydro / ABS agreement on aninterim basis until BCTC and ABS negotiate a separate contract. A letter agreement hasbeen signed between BC Hydro / ABS / BCTC which defines the service volume and costallocation agreed to between BC Hydro and BCTC under a new Permanent Pricing Modelwithin the existing agreement. BCTC is in the process of negotiating the separatecontract with ABS.

British Columbia Utilities CommissionInformation Request 1.42.2Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application42.0 Reference: Exhibit B-1 Section 9, pages 158-159 – M&P F2007 SalaryRESPONSE:Figure 9.6-4 provided a comparison of M&P’s salary scales in comparison toTowers Perrin’s Power Services Industry survey which suggested that M&P salaryscales will need to be adjusted by 2% in F2007 to maintain the salary scale midpointsat the targeted market position.42.2 Please file comparisons used from Towers Perrin’s Power ServicesIndustry survey which supports the requirement for a 2% salary increasefor M&P in F2007. What does the 2% salary increase represent in costsfor F2007?Attached is a larger scale version of Figure 9.6-4 which better shows the separationbetween the Market Median line and the BCTC Control Point line (mid-points of BCTC'sestablished salary ranges).The Market Median line is derived from data provided by Towers Perrin and represents acalculated single market median rate for an underlying cluster of actual market mediandata points for benchmark jobs within each salary grade (see table below). For F2007BCTC compared 36 jobs to market which collectively cover approximately 70% of BCTC’sM&P workforce. The calculated market median rates for each job group (72 through 79)are compared to BCTC’s salary scale mid points (BCTC’s control points for salarymanagement) in order to determine the adjustment, in this case 2%, to bring the BCTCsalary scale control points to the calculated market median.Please note that a 2% salary scale adjustment does not directly result in a 2% “salaryincrease”. BCTC adjusts individual salaries through a separate process which linksindividual salary adjustments to a combination of performance assessment and theposition of an individual’s salary relative to the mid point of the appropriate salary scale.Please also see the response to BCUC IR 1.42.3.It should also be noted that the market data provided by Towers Perrin and used byBCTC to determine market median comparisons is subject to a confidentiality agreement.

160,0002006 M&P Market Analysis140,000120,000Annual Base Salary ($)100,00080,00060,00040,00020,000072 73 74 75 76 77 78 79Job GradeBCTC Control Point 2006 Market Median BCTC Policy Line 2006 Market LineAttachment 1 to BCUC IR 1.42.2BCTC Transmission Revenue Requirement Application7 July 2006

F2007 Market Comparisons by Job GroupGroup 72 Group 73 Group 74 Group 75 Group 76 Group 77 Group 78 Group 79Administrative Administrative Communications Engineer 2 Client Services Community Manager, Legal CorporateAssistant 2 Assistant 3 CoordinatorManager RelationsManagerServices ControllerEngineer 1FacilitiesManagerIT Planner &CoordinatorFinancialManagerManager, AssetProgramDirector,CommunicationsExecutiveSecretaryHR Advisor Senior Engineer HumanResourcesPractice LeaderManager,Regional SystemPlanningManager, RealTime OperationsRecruiterSystemOperations ShiftSupervisorManager, Safetyand EnvironmentProcurement &ContractsManagerManagingEngineerManager, InteriorControlOperationsManager, SupplyChainManager, SystemPlanning andPerformanceAssessmentSpecialistEngineerLead EngineerSeniorRegulatoryAdvisorTechnologyManagerManager, LowerMainland ControlOperationsManager, SystemControl CenterManager, AssetManagementManager, AssetProgramDefinitionAttachment 2 to BCUC IR 1.42.2BCTC Transmission Revenue Requirement Application7 July 2006

British Columbia Utilities CommissionInformation Request 1.53.3Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application53.0 Reference: Exhibit B-1 F2006RESPONSE:53.3 Does the existence of the actuals change the revenue requirements orthe rates? If so, how?The F2007 forecast revenue requirement and resulting rates may change as a result ofusing the F2006 actuals, although the F2006 forecasted amounts in the Application aregenerally based on 11 months actual plus a one month forecast, and is not expected todiffer greatly from the actuals.Revenue requirement components based on balance sheet amounts such asdepreciation, finance charges and allowed return, would be most likely to show animpact from the use of F2006 actuals as changes from the forecast would impact theF2007 opening balances for cost determination.

British Columbia Utilities CommissionInformation Request 1.57.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application57.0 Reference: Exhibit B-1 Section 9.4.1, page 134 – Regulatory Deferral AccountRESPONSE:“Table 9.4-1 following summarizes the general and administrative costs for F2007and comparative figures for F2006 before transfer of balance to the RegulatoryDeferral Account.”Please provide detail and cost for the transfer to the Regulatory DeferralAccount.LineNo.F2006 F2006 F2006 F2006 F2006Total Charged OMAREDABalance$ millions Expenditures to Capital Actual Plan (note 1)(a) (b) (a)-(b)=(c) (d) (d)-(c)=(e)1 Labour 0.9 0.0 0.9 0.8 (0.1)Business Expenses2 Office Supplies 0.0 0.0 0.0 0.1 0.13 Printing 0.2 0.1 0.1 0.0 (0.1)4 0.2 0.1 0.1 0.1 0.0Outside Services5Advertising, Promotion &External Communications0.2 0.1 0.1 0.1 0.06 Consultants 0.1 0.0 0.1 1.3 1.27 Contractors 0.2 0.1 0.1 0.0 (0.1)8 Legal 1.2 1.0 0.2 1.0 0.89 Others 0.1 0.1 0.0 0.0 0.010 1.8 1.3 0.5 2.4 1.911 ABS 0.1 0.0 0.1 0.0 (0.1)12 Total OMA Before Deferral 3.0 1.4 1.6 3.3 1.7Note 1: F2006 REDA balance before accrued interest.

British Columbia Utilities CommissionInformation Request 1.61.0Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application61.0 Reference: Exhibit B-1 Section 7, Table 7-7 page 72, Depreciation StudyAppendix B, page III-3RESPONSE:Please reconcile the F2007 Depreciation expense on Table 7-7 with theAnnual Accrual Amounts from page III-3 of the Depreciation Study.Please express these reconciling differences in terms of Annual AccrualAmounts and depreciation rates by Profile ID.The Annual Accrual Amounts on page III-3 of the Depreciation Study are generallydetermined by dividing the Surviving Original Cost at March 31, 2005 over the LifeEstimate for Current Plant by Profile ID. These amounts therefore assume full yeardepreciation based on the original cost of assets as at March 31, 2005. However theAnnual Accrual Amounts do not take into consideration those assets that are fullydepreciated at March 31, 2005 as well as F2006 and F2007 asset retirements, assetadditions and accelerated depreciation associated with SCMP assets.The F2007 forecast depreciation expense in Table 7-7 is determined based on forecastassets in service as at March 31, 2006 adjusted for impacts of F2007 additions andretirements, accelerated depreciation on SCMP assets and composite rates in Table 7-9as determined from the Depreciation Study results on page III-3. As a result of thesedifferences, it is unclear whether it would be possible to reconcile the differences at theProfile ID level. If possible, the reconciliation would involve an extensive effort.

British Columbia Utilities CommissionInformation Request 1.65.4Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application65.0 Reference: Exhibit B-1, Appendix B, pages III-3 and III-14, Depreciation Study.RESPONSE:65.4 Please confirm that the BCTC depreciation rates used in the F2007 testperiod are shown on page III-3. If not, please explain by Profile ID.Yes, BCTC uses the “Life Estimate for Current Plant” shown in column 6 of the table onpage III-3 of Appendix B to the Application to calculate the depreciation rates for F2007.Please note that the life estimate shown for Profile ID 80104 on line 18 of the table isincorrect. It should read 4 years rather than 5 years. BCTC will file a corrected sheet indue course.

British Columbia Utilities CommissionInformation Request 1.65.5Dated 19 June 2006British Columbia Transmission CorporationResponse Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application65.0 Reference: Exhibit B-1, Appendix B, pages III-3 and III-14, Depreciation Study.RESPONSE:65.5 Please identify the assets by group on page III-3 that will be replaced inthe System Control Modernization Project and the correspondingaccelerated depreciation rates.The accelerated depreciation for assets that will be replaced as part of the SCMP wasdetermined by apportioning the net book value as at 31 March 2005 over three and a halfyears from April 1, 2005 to September 30, 2008. The accelerated depreciation rate is28.6%.Profile IDSurviving OriginalCost at 03/31/2005Existing assets to bereplaced by SCMPProject - NBV as at03/31/2005$22005 - Buildings,Composite Pool $ 11,311,7085,561,67048003 - Generator - composite Pool 642,889 492,89359001 - Power Supply - Uninterruptible 2,017,107 857,59459301 - Storage Batteries - bank 256,864 181,33161101 - Alarm Security Systems 41,258 35,86065101 - Fault Locating and Reporting 11,602 10,34568201 - Control centre (Master Equip) 58,764,047 15,504,92368202 - Remote Terminal Unit - Slave 582,029 195,26868302 - Radio - Microwave, Digital 576,101 -68501 - Radio Systems - UHF/VHF 269,799 192,33968901 - Telephone Equipment, PBX/PAX 203,151 181,14370001 - Cable - Entrance Protection 24,373 14,62475202 - Fuel Storage Tank 30,748 21,39675204 - Tanks - Concrete 183,409 135,87280101 - Computer Hardware - Micro (PC) 536,552 201,63080102 - Computer Hardware - Mini 1,059,912 889,30180103 - Computer Hardware - Input/Output 77,835 50,14180104 - Computer Hardware - Comp. Pool, PCS 526,837 23,63080105 - Laptops 381,987 -80302 - Software Mainframe 436,708 178,73380303 - Application Software - Mid-Range Sys 20,174,944 6,390,13480304 - PC Software 17,850 -80305 - Software System Upgrades, Mid Range Systems 1,510,722 490,93180401 - Simulator Training 2,149,950 1,525,25780503 - Switches 130,200 120,90080504 - Servers 569,793 381,75380508 - Misc. Network Equipment 15,001 13,12685001 - Furniture and Equipment Office 1,785,615 1,079,78185002 - Office Equipment 34,887 13,955Total $ 104,323,880 $34,744,527

British Columbia Utilities CommissionInformation Request 1.35.2Dated 19 June 2006British Columbia Transmission CorporationRevised Response Issued 7 July 2006British Columbia Transmission CorporationTransmission Revenue Requirement Application35.0 Reference: Exhibit B-1 Section 9, p. 140 - General and Administration – ITBC Hydro F07/F08 Revenue Requirements Application p. 5-20Table 5-6RESPONSE (REVISED):35.2 Provide a list of the services / functions that ABSU or other outsourcingservice vendors provide to BCTC for years F2005 to F2007 and the costsfor these services in each of these years.The following table provides an overview of services provided by ABSU to BCTC foryears F2005, F2006 and F2007.Line No. OMA expenditures F2005 Actual F2006 Actual F2007 Plan1 Technology Services 7,401,837 6,166,320 7,071,1252 Building Office Services 1,028,633 802,022 664,2673 Human Resources 870,801 334,099 97,0004 Finance & Accounting 1,528,171 722,518 695,0005 Purchasing 218,889 29,051 419,9326 Totals 11,048,331 8,054,010 8,947,324Changes to service provision from F2005 through F2007 include:(a) F2006 – HR Services – payroll and employee information were outsourced to alternateservice provider (Ceridian).(b) F2006 – F&A Services – through transition to Oracle some finance services werewithdrawn from ABS and brought in-house.(c) F2007 – HR Services – employee assistance programs (except EFAP) were contracteddirectly with ABS service providers.(d) F2007 – BOS Services – security services (except substation patrols), printing,graphic design and temporary office staff were outsourced to alternate serviceproviders.(e) F2007 – Purchasing Services – increase is due to increased transaction volume(BCTC assumed BCH contracts) as well as cost to manage Oracle procurement whichis unique to BCTC.