The Alberta Utilities Commission (AUC) issues a decision at the end of each regulatory proceeding. A decision takes into consideration all information from the application and hearing process. The result is approval or denial of the application in full, in part, or with conditions.
The following decision summaries are provided by the Office of the Utilities Consumer Advocate (UCA) and are intended to provide a general overview of more significant proceedings. The Alberta Utilities Commission (AUC) publishes the full reports and official decisions for all proceedings on its website.
AUC Decision 25663-D01-2021, March 1, 2021
ATCO Pipelines (“AP”) filed its general rate application (“GRA”) on June 16, 2020 for the 2021-2023 test period. AP was seeking a combined revenue requirement of $991.2 million for 2021-23, averaging a 4 per cent increase per year. The revenue requirement is recovered through a transmission charge that appears on all gas consumers’ monthly bills.
The AUC Commission, after an open and public process, ruled that 14 areas of the initial application will not be approved as filed. The UCA argued against the new Pipeline Facilities Security Program and increased costs for the existing Pressure Vessel Inspection Program. The AUC agreed and directed $6.5 million be removed from ATCO’s capital spending budget. In total, $21.6 million was cut from AP’s capital spending and its revenue requirement was reduced by $16.7 million. The UCA also successfully argued against the need for a Large Asset Purchase deferral account as there had not been a significant acquisition in ten years. The AUC agreed with the UCA that pandemic-related costs and property taxes should be handled using a deferral account to ensure actual costs are recorded and ordered further reductions to the proposed property tax forecast. Lastly, the UCA argued and the AUC agreed that salary escalations should be reduced to reflect the current economic conditions.
AUC Decision 25870-D01-2020, November 19, 2020
AltaLink filed an application seeking a review and variance of a previous Commission decision pertaining to AltaLink’s 2019-2021 General Tariff Application, dealing with net salvage costs. Net salvage is the net value of various assets to be retired from utility service, which have been typically pre-collected from customers through rates. AltaLink proposed to refund $81.5 million dollars of net salvage collection back to customers and modify its approach to collecting these amounts. The Utilities Consumer Advocate (UCA) supported the proposed methodology and refund as it would provide much needed rate relief for Alberta consumers during the challenges brought on by Alberta’s economic downturn and the COVID pandemic.
The Alberta Utilities Commission (Commission) issued decision on November 19, 2020 (25870-D01-2020) that approved the $81.5 million refund to consumers, through transmission rates. As part of the decision, the Commission approved AltaLink Management Ltd’s (AltaLink) proposed net salvage methodology for future collection of net salvage costs.
AUC Decision 24820-D01-2020, August 28, 2020
ENMAX Power Corporation (ENMAX) filed its Distribution Tariff Phase II Application, on August 19, 1999. Phase II applications design rates based on cost allocation studies to determine how much of a utility’s revenue requirement should be recovered from each rate class of customers, through their rates, as well as modify the distribution utility’s terms and conditions of providing service. ENMAX had proposed to increase the fixed proportion of rates for its residential and small commercial rate classes by over 10 percent to 87 percent and 88 percent respectively, with a goal to transition to fully fixed rates in future applications. In addition, ENMAX re-organized, re-structured and changed certain provisions in its terms and conditions.
After an open and public process, the Commission issued Decision 24820-D01-2020 which denied the proposed increase to the proportion of fixed costs in rates. In addition, the Commission accepted several of ENMAX’s terms and conditions, some which were revised during the course of the proceeding, while directing further changes to other aspects of the terms and conditions dealing with definitions, utility discretion, and adding further clarity. The Commission also issued directives for ENMAX to provide more transparency in costs for installing new infrastructure on behalf of developers. These revisions to the terms and conditions of service are to be filed in an upcoming compliance application that will follow the directives contained in the decision.
AUC Decision 25380-D01-2020, June 29, 2020
On February 18, 2020, the Commission received a review application from ATCO Gas requesting a review and variance of its Decision 24333-D01-2019. In this proceeding the Commission had to determine whether to grant a review application filed by ATCO Gas, the distribution division of ATCO Gas and Pipelines Ltd., requesting a review and variance of specific findings in Commission Decision 24333-D01-2019. ATCO Gas’s review application concerned findings and directions pertaining to assets transferred from ATCO Pipelines, the transmission division of ATCO Gas and Pipelines Ltd., to ATCO Gas, and the removal of certain capital additions associated with costs of that transfer. In its review application, ATCO Gas submitted that the hearing panel made numerous findings that were errors of law, fact or jurisdiction, that it made procedural errors, and that it failed to give adequate reasons.
The Commission, after considering the submission of the Utilities Consumer Advocate in this proceeding and in Proceeding 24333 and the evidence presented to and determinations of the hearing panel, decided that ATCO Gas had not met the requirements for a review of the findings of the hearing panel in Decision 24333-D01-2019 and therefore their application for review was dismissed.
AUC Decision 23966-D01-2020 (Corrigenda), June 5, 2020
ENMAX Power Corporation (“EPC”) filed its general tariff application (“GTA”) on December 12, 2018, for the period of January 1, 2018, to December 31, 2020. EPC was seeking revenue requirement in 2018 of $85.68 million, of $95.67 million in 2019 and 2020 revenue requirement of $106.36 million along with approval of forecast capital additions and rate base for the test period and approval to continue or create additional deferral and reserve accounts. The revenue requirement is recovered from utility consumers through transmission rates.
The Commission, after an open and public process, decided to accept EPC’s negotiated settlement agreement with the Utilities Consumer Advocate and the Consumers Coalition of Alberta. Of the six issues excluded from the negotiated settlement agreement, the Commission denied EPC’s proposed new flowthrough deferral account and Remington project deferral account and changes to its existing major storms and natural disasters deferral account. The Commission ruled that all matters regarding the replacement of its Substation No. 1 were to be removed from the revenue requirement for this GTA. The Commission also did not approve EPC’s proposed treatment for capital leases. Lastly, the Commission provided guidance with respect to the application of EPC’s capitalization policy and confirmed the Utilities Consumer Advocate’s assertion that only assets that are used and required to be used are to be capitalized into rate base.