Water Rates
Horse Creek Water Services Inc. (“Horse Creek”) filed an application with the AUC requesting approval to continue charging its existing approved water rates, and to update its terms and conditions.
The rates previously in place were approved by the AUC in Decision 2011-061, which approved rates, as well as terms and conditions for Regional Water Services Ltd. (“RWSL”), to operate a water utility serving the residential development known as MonTerra on Cochrane Lakes in Cochrane, Alberta (“MonTerra”).
Horse Creek purchased RWSL under a receivership order on August 6, 2014, and adopted RWSL’s rates, as well as its terms and conditions. Horse Creek indicated to the AUC that it intended to file a rate application in 2016 to obtain higher water rates.
A number of stakeholders objected to the application, submitting that Horse Creek’s existing water rates were much higher than those of comparable communities in Western Canada, and opposed Horse Creek’s request to continue with its current rates.
The AUC determined that there was no persuasive factual basis upon which to conclude that the rates approved in Decision 2011-061, which expire on February 18, 2016, were no longer just and reasonable. The AUC also noted that the costs of a procedure to determine new rates (that would only remain applicable for a six-month period) would likely exceed any potential net cost savings. Therefore the AUC granted the approval for the continuation of the existing water rates until February 18, 2016.
The AUC also found that since Horse Creek had not yet filed its application for rates beyond February 18, 2016, it would be unlikely that the AUC would reach a final decision in relation to that application prior to February 18, 2016. Accordingly, the AUC determined that the continuation of the approved rates on an interim basis starting February 18, 2016 was warranted, conditional upon Horse Creek filing a general rate application on or before February 18, 2016.
The AUC determined that for the purposes of regulatory efficiency, it would consider Horse Creek’s revised terms and conditions as part of Horse Creek’s general rate application in 2016.
Accordingly, the AUC approved:
(a) The continuation of water rates as set out in Decision 2011-061 for the operation of the water utility serving MonTerra by Horse Creek;
(b) The approval of the water rates as set out in Decision 2011-061 for the operation of the water utility serving MonTerra by Horse Creek on an interim and refundable basis effective February 18, 2016; and
(c) The continuation of the terms and conditions of service approved in Decision 2011-061 for the operation of the water utility serving MonTerra by Horse Creek until otherwise directed by the AUC.
