General Tariff Application – Refiling
TransAlta Corporation, as Manager of the TransAlta Generation Partnership (“TransAlta”) applied for approval of its 2013-2014 general tariff application (“GTA”) refiling pursuant to the directions issued in Decision 3466-D01-2015. TransAlta’s GTA refiling included three parts:
(a) Section A – Tariff adjustments;
(b) Section B – Responses to the Commission’s directions; and
(c) Section C – Revised 2013-2014 schedules.
With respect to direction 1, the AUC directed TransAlta to revise its calculations of the legal expenses associated with the Blood Reserve fire, as it had been double counted. TransAlta submitted that it removed the portion of those amounts associated with the Blood Reserve fire from its account for outside services employed (i.e. USA 923).
The AUC held that it was satisfied that TransAlta had reduced the amounts as directed. TransAlta’s amounts for outside services employed were therefore approved as filed.
TransAlta submitted that it would address directions 2 and 3 from Decision 3466-D01-2015 in its next GTA.
With respect to direction 4, the AUC directed TransAlta to make any further changes to working capital amounts as a result of the remaining directions in Decision 3466-D01-2015. TransAlta submitted that it had revised its 2013 and 2014 working capital amounts. TransAlta noted that it identified an error in its schedule for calculating amounts on its initial filing, but submitted that it had no impact on the return on rate base as requested in the GTA refiling, as the impact of the error was beyond the level of precision shown in the schedules.
The AUC held that it was satisfied that the updated calculation of necessary working capital reflects the adjustments necessitated by direction 4, and approved TransAlta’s working capital amounts as filed.
In direction 5, the AUC directed TransAlta to make any further changes to depreciation amounts as a result of the remaining directions in Decision 3466-D01-2015. TransAlta submitted that none of the AUC’s directions in Decision 3466-D01-2015 affected its calculation of depreciation amounts.
The AUC approved TransAlta’s depreciation amounts as filed.
In direction 6, the AUC directed TransAlta to update its return on equity amounts to reflect the AUC’s findings in Decision 2191-D01-2015 establishing a generic return on equity percentage of 8.3 percent for 2013, 2014 and 2015. TransAlta submitted that it had updated the return on equity calculations in schedules 3-1, 9-1, and 28-1 of the GTA refiling.
The AUC held that the updated calculations in TransAlta’s GTA refiling reflect the AUC’s findings in Decision 2191-D01-2015 and therefore approved TransAlta’s return on equity as filed.
In direction 7, the AUC directed TransAlta to make any further changes to income tax amounts as a result of the remaining directions in Decision 3466-D01-2015. TransAlta submitted that it had revised its income tax expenses to reflect the AUC’s filing. TransAlta further noted that due to the ongoing one-year deferral effect of its annual income tax expense, the impacts of the revisions for 2013 are deferred to 2014, and the 2014 revisions will be reflected in TransAlta’s 2015 test year.
The AUC approved TransAlta’s refilled income tax expenses for 2013 and 2014 as filed.
In direction 8, the AUC directed TransAlta to discuss whether TransAlta would be able to develop a reasonable test period forecast by removing the requirement for TransAlta to wait until AltaLink has filed its GTA before filing its tariff application. TransAlta submitted that while it currently works with AltaLink to develop a one-year forecast for capital maintenance and capital additions, it would require additional resources to develop a similar two-year forecast. TransAlta submitted that the required investment to develop and defend such an extended forecast period would not provide much, if any, reduction in the regulatory lag associated with approval of TransAlta’s GTAs.
The AUC held that, given the small size of TransAlta’s revenue requirement, the regulatory lag associated with its GTAs are not harmful to consumers. The AUC held that any associated reduction in regulatory lag would not be sufficient to justify the costs, and therefore the AUC did not order any change to TransAlta’s filing requirements.
In Decision 3466-D01-2015, the AUC directed TransAlta to reconcile its 2013 and 2014 revenue requirements against the interim tariff rates authorized in Decision 2014-053. TransAlta calculated a revenue shortfall of $506,377 for both 2013 and 2014, and requested approval for a one-time lump sum payment from the Alberta Electric System Operator. TransAlta calculated its net shortfall as follows:
(a) 2013 refund amount of $27,978;
(b) 2014 shortfall of $478,410; and
(c) Deferral account reconciliations for 2013 and 2014 of $55,945.
The AUC held that the deferral account reconciliations were already approved in Decision 3466-D01-2015. The AUC agreed with TransAlta’s calculations for balances in 2013 and 2014 by comparing the approved interim rates with TransAlta’s requested final revenue requirement in its GTA refiling. Accordingly, the AUC approved the final tariff reconciliation in the amount of $506,377.
As a result the reconciliation and approval of the revenue requirements on a final basis for 2013 and 2014, the AUC ordered TransAlta to invoice the Alberta Electric System Operator for a one-time lump sum payment of $506,377.
