Terms and Conditions of Service – Liability of Rural Landowners for Abandoned Energy Facilities – Farmers Advocate
In this decision, the AUC considered proposed amendments to the terms and conditions of service of EPCOR Energy Alberta GP Inc. (“EPCOR”), Direct Energy Regulated Services (“DERS”), ATCO Electric Ltd. (“ATCO”) and FortisAlberta Inc. (“Fortis”) (collectively, the “Companies”). Specifically, the AUC considered the proposed amendments to ensure that rural property owners would not be liable for electrical distribution charges related to an energy company’s oil and natural gas facilities located on their land in circumstances where the rural property owner has not requested the service.
In this decision, for the reasons further summarized below, the AUC:
(a) Approved, with slight modification, the amendments proposed by EPCOR and DERS, to be effective no later than December 1, 2017; and
(b) Conditionally approved the amendments proposed by ATCO and Fortis, pending the outcome of any resulting from AUC Rule 021: Settlement System Code Rules (“Rule 21”) and AUC Rule 028: Natural Gas Settlement System Code (“Rule 28”) consultations.
Background
On October 20, 2016, the AUC issued notice that it would, on its own initiative, review certain terms and conditions of the regulated rate service of EPCOR (the “EPCOR T&Cs”) and DERS (the “DERS T&Cs”). The proceeding was initiated after the Farmers’ Advocate Office (“Farmers’ Advocate”) advised the AUC that some rural landowners were being billed by regulated rate service providers as the customer of record for oil and gas sites located on their property after the energy companies had abandoned their facilities and stopped paying the electric distribution charges.
In a process letter issued on January 9, 2017, the AUC expanded its review to include the terms and conditions of service distribution companies ATCO (the “ATCO T&Cs”) and Fortis (the “Fortis T&Cs”), after receiving a complaint from the Farmers’ Advocate that a rural property owner had been charged an oilfield rate by ATCO for service requested by a now insolvent energy company.
EPCOR and DERS Proposed Amendments to Terms and Conditions
The AUC found that EPCOR and DERS’ proposed amendments achieved the objective set out in the AUC’s notice of proceeding. Specifically, the AUC found, that, with the slight modifications shown above (blue), the amendments proposed by EPCOR and DERS would ensure that rural property owners were not charged for distribution charges related to an abandoned oil and gas site located on their property.
The AUC directed that DERS and EPCOR adjust the proposed amendments by inserting the word “directly” between “Property Owner” and “requested,” where the proposed amendments of EPCOR and DERS state “…unless the rural Property Owner requested the Service…” (“service” in DERS’ case).
ATCO’s and Fortis’ Retailer Terms and Conditions
The AUC found that the amendments proposed by ATCO and Fortis would ensure that rural property owners are not improperly billed for service to an oil and gas site located on their property. However, the AUC noted that this issue was also raised in the context of a review of Rule 021 and Rule 028 in an industry consultation session held in February 2017. A working group was formed to examine the matter, but its review was suspended pending the completion of this proceeding. The AUC considered that a resumption of the review by stakeholders might result in recommendations that directly impact the business processes proposed by ATCO and Fortis in the amendments to their own terms and conditions.
Therefore, the AUC conditionally approved the amendments proposed by ATCO and Fortis, subject to the outcome of the Rule 021 and Rule 028 consultations, at which time the AUC would revisit its conditional approval and determine whether the present amendments should remain in force or be further amended.
Order
The AUC ordered the companies to make their proposed amendments with the changes directed by the AUC.
