Compliance Filing – Non-energy Regulated Rate Tariff
Pursuant to the AUC’s directions made in Decision 2014-303 (“Decision 2014-303”), EPCOR Energy Alberta GP Inc. (“EEA”) filed a compliance filing with respect to its 2014-2015 non-energy regulated rate tariffs (“2014-2015 RRT”).
EEA requested that the AUC approve its:
(a) Refiled 2014-2015 RRT non-energy revenue requirement;
(b) Refiled rates and price schedules, effective July 1, 2015;
(c) True-up mechanisms for 2013, 2014 and 2015; and
(d) Terms and conditions.
The AUC noted that directions 1, 8, 9, 12, and 16 from Decision 2014-303 related to future non-energy tariff applications, and therefore were not addressed. The AUC also found that EEA corrected a total of eight errors and omissions in its 2014-2015 RRT, the combined effect of which caused an increase in EEA’s revenue requirement of $0.29 million in 2014, and $0.67 million in 2015, which were approved as filed.
The AUC directed EEA, as part of direction 2 in Decision 2014-303, to adjust its site count forecast to reflect the current eligibility criteria in the Regulated Rate Option Regulation of 250 MWh annual consumption. EEA submitted in its refiling, that it updated its site counts, and removed attrition assumptions for site counts related to the changes in the regulated rate option eligibility. EEA submitted that the impact of this change increased its revenue requirement by $0.29 million in 2014 and $1.55 million in 2015.
However, after taking into account changes directed by the AUC in directions 3 and 4 related to forecast site count attrition rates and utility associates site counts, EEA submitted that the overall impact to its revenue requirement was an increase of $0.04 million for 2014 and $0.21 million for 2015.
The Office of the Utilities Consumer Advocate (“UCA”) disagreed with EEA’s refiling, noting that EEA had failed to use the most up to date site count information from its 2014 actual data, which it submitted was at variance with the EEA’s forecasts.
The AUC determined that it traditionally requires a utility’s revenue requirement schedules to be updated for any year-end actual rate base figures that become available prior to the close of the record, but does not generally apply those figures as a substitute for the applied-for forecasts. Accordingly, the AUC held that EEA’s site count and attrition figures using November 2012 to October 2013 actual data was sufficient.
The AUC found that EEA’s proposed forecasts were reasonable, and that EEA complied with directions 2, 3, and 4 from Decision 2014-303.
As part of Decision 2014-303, the AUC directed EEA to provide an update of salary escalators for its unionized employees to account for the finalization and ratification of its agreements with the Civic Service Union 52. EEA submitted that, at the time of the refiling, it still did not have a ratified agreement, and requested that the AUC approve its initial request for salary escalators of 3.1 percent for 2014 and 3.4 percent for 2015.
The UCA submitted that the proposed salary escalators from EEA were outdated, and must be reviewed in light of the current state of Alberta’s economy. The UCA submitted that recent quarterly forecasts provided a more reasonable forecast rate for 2015 of 0.7 percent. Accordingly, the UCA submitted that the salary escalators for 2014 and 2015 be adjusted downwards to 1.0 percent and 2.0 percent respectively. The Consumers’ Coalition of Alberta (“CCA”) argued that the AUC should conduct a further process after reply argument for parties to make submissions with respect to any further update on EEA’s negotiated union agreements.
The AUC determined that it was not efficient to further delay the approval of non-energy rates by adding any further process, and held that it would make its decision based on the information available with respect to forecast salary escalators. The AUC rejected the alternative proposal of the UCA, noting that the downward adjustments were not supported by evidence. The AUC determined that EEA’s requested salary escalators were reasonable, as they were consistent with previous applications, and therefore found that EEA had complied with direction 6 from Decision 2014-303.
Direction 10 in Decision 2014-303 directed EEA to finalize its embedded corporate services costs for 2015 in its compliance filing. EEA submitted that its updated embedded corporate services costs resulted in a reduction of $0.18 million from EEA’s initial filing, primarily as a result of recentralizing human resource services within its parent organization.
The CCA argued that EEA’s embedded corporate services costs were over-forecasted for 2014 by approximately 7.9 percent compared to preliminary actual data. As a result, the CCA submitted that if the 2015 forecasts are based on the 2014 forecast data, that the 2015 forecasts should be reduced accordingly.
The AUC declined to make the adjustments requested by the CCA, as the adjustment would be for a single line item. The AUC considered that no adjustments were necessary to EEA’s costs for embedded corporate services, and approved them as filed.
With respect to the remainder of the directions in Decision 2014-303, the filings were not contentious, and were approved as filed.
With respect to the true-up mechanisms and calculations requested by EEA, EEA proposed a true-up of the difference between interim and final charges over the period from July 1, 2015 to December 31, 2015. The AUC noted that EEA’s submissions were not contested by any party, and were found to be reasonable upon review.
As a result, the AUC approved EEA’s 2014-2015 RRT filings, true-up mechanisms, and terms and conditions, as filed.
