Updated Transmission Facility Owner Tariff – Interim Basis
ATCO Electric Ltd. (“ATCO”) applied for its updated 2015 transmission facility owner (“TFO”) tariff on an interim basis, effective June 1, 2015. ATCO initially applied a revenue requirement for its TFO tariff in the amount of $694.3 million for 2015, a figure which has subsequently been updated to $695.7 million. ATCO had also previously received approval for an interim 2015 TFO tariff revenue requirement of $579.0 million in Decision 2014-356. ATCO’s updated interim TFO tariff requested approval for recovery of the full updated $695.7 million in the current application.
ATCO submitted that its requested increase in revenue requirement was both probable and material, and the collection of revenue deficiencies would ensure that ATCO has adequate cash on hand to cover operational expense increases in the interim. The increase in revenue requirement was driven primarily by an increased depreciation expense from new capital additions going into service, and a change in net salvage parameters.
ATCO submitted that 100 percent of its 2015 revenue requirement was consistent with past AUC decisions, noting that the six year average of approved final revenue requirement amounts was 94 percent of the applied-for amounts.
The AUC held that the identified revenue shortfall of $116.7 million was a material amount, and that some relief was warranted for ATCO’s interim 2015 TFO tariff. However, the AUC approved only 90% of ATCO’s requested increase, in keeping with its past practice of only approving some portion of the requested interim rate. The AUC noted that controversial issues may arise in the course of ATCO’s general tariff application. The AUC also held that an approval of 90 percent of the requested increase would balance the need to maintain rate stability, while avoiding imposing financial hardship on the applicant.
The AUC therefore approved ATCO’s 2015 TFO tariff on an interim basis in the amount of $54,982,857 per month, effective June 1, 2015 until otherwise ordered by the AUC.
