Rule 004 Exemption
AltaGas Utilities Inc. (“AltaGas”) requested exemptions from certain requirements of Rule 004: Alberta Tariff Billing Code (“Rule 004”), which defines the business processes and mechanics of how bill-ready information is to be produced and transmitted to retailers by electricity and natural gas distributors in Alberta.
AltaGas applied for the following exemptions of Rule 004 from December 5, 2015, to December 31, 2018:
(a) Section 3.2, Table 3-1, lines (Ref IDs) 14 and 15;
(b) Section 4.3.1(4);
(c) Section 5.4.1(1); and
(d) Section 5.4.1(2).
AltaGas had previously applied for a permanent exemption from Rule 004, which was denied by the AUC in Decision 2008-084. In that decision, the AUC directed AltaGas to proceed with preparing a compliance plan to achieve full compliance with Rule 004. In response, AltaGas filed a compliance plan on May 28, 2010, which the AUC approved by letter, granting temporary exemptions from the same requirements as AltaGas requested in this application.
AltaGas stated that while it plans to achieve full compliance, it noted that the vendor of its customer billing software was not available to implement an updated version of its software, and that the cost of doing so was prohibitive. As a result, in AltaGas’ submission, it made the internal decision to continue utilizing its current billing system in conjunction with the continuation of its requested Rule 004 exemptions.
AltaGas stated that its replacement billing system, which will address the non-compliance issues, is currently scheduled for implementation in 2019.
AltaGas submitted that it is continuing to seek the temporary exemption from Ref ID 14 in Table 3-1 of Rule 004, since, when a rider rate change occurs in a single billing period, its current customer billing system is not capable of applying the different rates within the same period. However, AltaGas noted that only non-energy based charges like franchise fees and property tax rate riders cannot be split within a month, so the non-compliance does not result in any errors on billings.
With respect to Ref ID 15 of Table 3-1, AltaGas submitted that it is requesting an exemption as its current billing system is not able to split energy usage when an RRT change occurs. However, AltaGas clarified that this inability exists only when a site is idle or de-energized, therefore energized sites with billed usage will have their charges billed correctly.
A number of retailers expressed concern that they are required to incur man-hour costs to manually correct these non-compliances, and deal with elevated numbers of customer complaints as a result.
AltaGas reiterated that a continuation of the exemptions is reasonable pending the implementation of its long-term solution. AltaGas submitted that the exemptions strike a reasonable balance between distributors, retailers and end use customers and will avoid costly temporary fixes.
With respect to cancellations and rebills, AltaGas submitted that its billing system was unable to complete a one-step cancel and rebill that affects more than one billing period. AltaGas stated that it has had a workaround in place on its system since 2010 to accommodate such cancellations and rebills. AltaGas noted that the overall incidence of such cancel and rebill events are quite low, affecting 0.0985 percent of retail sites billed annually.
Several retailers that intervened in the proceeding commented that the current workaround results in the timing risk and cash flow recovery of such rebills falling to retailers and end-use consumers. Interveners submitted that approximately 200 hours per year are incurred by accommodating AltaGas’ workaround, composed of 80 hours of training, 100 hours for dealing with billing exception, and 20 hours participating in the associated regulatory process. Others submitted that the workaround process introduces the risk of further error into the billing process.
AltaGas replied to these concerns, submitting that it plans to become fully compliant, but stressed the need to balance temporary non-compliance costs with the cost of expedited compliance.
The AUC held that full compliance with Rule 004 was important to ensure an open, fair and effective retail market. However, the AUC noted that some circumstances warrant temporary exemptions pursuant to section 6.1.5 of Rule 004, which expressly allows temporary exemptions.
The AUC held that the impacts of AltaGas’ non-compliance with the provisions of Rule 004 for which AltaGas requested exemptions was manageable. The AUC further held that granting AltaGas’ requested exemptions did not affect AltaGas’ obligation to comply with the Regulated Default Supply Regulation, and therefore found that granting the temporary exemptions was in the public interest.
However, with respect to the requested exemption from section 5.4.1(2) related to cancellations and rebillings, the AUC held that this exemption would have a greater impact on retailers and end-use consumers in AltaGas’ service territory. The AUC held that since the proposed workaround would affect a small number of customers, and that no viable alternatives were presented, it approved the requested temporary exemption from section 5.4.1(2) of Rule 004.
The AUC stressed that it remained concerned about AltaGas’ repeated applications for temporary exemptions from Rule 004, extending over a decade. However, given AltaGas’ evidence related to the costs of implementing a temporary solution, the AUC approved the requested exemptions.
The AUC noted that it was approving AltaGas’ temporary exemptions in reliance on AltaGas’ proposed compliance timeline. Therefore the AUC directed AltaGas to advise the AUC on an annual basis whether the proposed compliance timeline is still correct, and to advise of any measures taken to address schedule slippage.
AltaGas’ compliance timeline indicated that it would achieve full compliance with Rule 004 in 2019, but did not provide a specific date. Noting the numerous prior applications for temporary exemptions, the AUC held that based on the evidence before it, it expected a date no later than June 30, 2019, but imposed a deadline of December 31, 2018 in order to avoid the regulatory burden of a further temporary exemption application. The AUC therefore directed AltaGas to refile its compliance timeline to reflect this decision.
Accordingly, the AUC ordered that:
(a) AltaGas be granted a temporary exemption from the requirements of Section 3.2, Table 3-1, Ref IDs 14 and 15; Section 4.3.1(4), Section 5.4.1(1) and Section 5.4.1(2) of Rule 004 effective from the date of the decision until December 31, 2018;
(b) AltaGas be directed to monitor and provide annual reports simultaneously with its Rule 002: Service Quality and Reliability Performance Monitoring and Reporting for Owners of Electric Distribution Systems and for Gas Distributors annual report:
(i) Whether its compliance timeline is still correct, and if not, what measures AltaGas has undertaken to prevent schedule slippage;
(ii) The number of non-compliances for the approved exemptions on a quarterly basis; and
(iii) Concerns raised by retailers or any possible customer dissatisfaction as a result of the exemptions and any mitigation measures taken in response; and
(c) AltaGas be directed to file an updated compliance plan within 30 days of this decision.
