Terms & Conditions – Compliance Filing
In this decision, the AUC considered ENMAX Power Corporation’s (“ENMAX”) compliance filing to Decision 22032-D01-2016 regarding ENMAX’s proposed changes to its distribution terms and conditions (“T&Cs”).
Background
On December 18, 2015, ENMAX filed an application with the AUC for approval of a performance-based regulation (“PBR”) plan for its electric distribution services for the period of January 1, 2015 to December 31, 2017 (the “Original Application”). However, by letter dated January 20, 2016, ENMAX advised that it had met with the Consumers’ Coalition of Alberta (“CCA”) and the Office of the Utilities Consumer Advocate (the “UCA”), and that all parties were willing to explore a negotiated settlement agreement (“NSA”) with respect to the Original Application.
On May 12, 2016, ENMAX filed for approval its negotiated settlement agreement (“NSA”) with the CCA and UCA (the “NSA Application”). The NSA did not include the X factor component to be used in the PBR rate-setting formula, which was considered by the Commission separately.
In Decision 21149-D01-2016, the AUC approved the NSA between ENMAX and consumer groups with respect to ENMAX’s proposed 2015-2017 PBR plan (the “NSA Approval”). Because the X factor component of the PBR rate-setting formula was not part of the NSA, in the same decision the AUC also approved an interim X factor.
On September 28, 2016, ENMAX filed an application with the AUC requesting approval of additional changes to its T&Cs.
In that application (the “T&Cs Application”), ENMAX requested approval of changes to several sections of its T&Cs and to the quantum of fees in its distribution tariff schedules. ENMAX attached to the T&Cs Application emails from the CCA and the UCA confirming that, as part of the NSA negotiations, both the CCA and the UCA agreed to the proposed T&Cs changes, with the exception of item 15 of the distribution tariff fee schedule.
In an information request response, ENMAX clarified that it included the proposed T&Cs changes as part of the Original Application, but not as part of the NSA Application. ENMAX stated that it had interpreted the wording of paragraph 38(g) of the NSA Approval as approving the proposed T&Cs changes.
Given that the proposed T&Cs changes were not filed as part of the NSA Application, the AUC did not consider these proposed changes in its review of the NSA Application or approve them in the NSA Approval.
On October 21, 2016, the AUC issued Decision 22032-D01-2016, which considered ENMAX’s proposed changes to its T&Cs. In that decision, the AUC directed ENMAX, in a compliance filing, to:
(a) File a revised T&Cs application, to be considered under a new proceeding, with supporting explanations regarding the proposed changes; and
(b) Refund customers’ fees that were found to be not approved in the NSA Approval and in excess of the fees in the ENMAX fee schedules approved in Decision 2013-247.
On November 10, 2016, in response to directions set out in Decision 22032-D01-2016, ENMAX filed its compliance Compliance Filing is the subject of this Decision 22141-D01-2017 summarized below.
Force Majeure Clause
ENMAX proposed to include the following addition in Section 5.5.1 of its T&Cs:
If an event or circumstance of Force Majeure occurs that affects EPC’s ability to provide any service under these Terms and Conditions, including Connection Services or other interconnection to its electric distribution system or Distribution Access Service, EPC’s obligations and responsibilities hereunder and under any agreement relating to such services, so far as they are affected by the Force Majeure or the consequences thereof, shall be suspended until such Force Majeure or the consequences thereof are remedied and for such period thereafter as may reasonably be required to restore the services. All applicable charges in the EPC Distribution Tariff Rate Schedule, will continue to be payable, during the period in which EPC claims relief by reason of Force Majeure [emphasis added by AUC].
ENMAX submitted that the proposed change was “modified for clarity.”
The AUC found that it was unclear, based on a plain reading of ENMAX’s T&Cs, precisely which charges ENMAX would continue to collect from customers, notwithstanding an interruption in service. The AUC expressed concern that this lack of clarity could be confusing to customers.
Accordingly, the AUC directed ENMAX to propose changes to its T&Cs and rate schedules to provide greater clarity and transparency with respect to a customer’s liability in the event of a force majeure.
The AUC approved the proposed language on an interim basis. In the event of a force majeure, the AUC directed that:
(a) ENMAX would apply the provision in its T&Cs such that the “applicable charges” associated with any event of force majeure would be the same as the “minimum charges” as described in either EPCOR’s or Fortis’ T&Cs;
(b) ENMAX would not charge a customer any consumption-based charges (system usage or variable charges) in the “applicable charges” imposed during an event of force majeure which resulted in the interruption; and
(c) the interim approval would remain in effect until ENMAX applies for new wording in its next T&Cs application or as part of the next annual PBR rate adjustment filing, whichever comes first.
Maximum Investment Levels
ENMAX applied for increases to its maximum investment levels (“MILs”), and that MILs be escalated annually by the I-X mechanism and be effective January 1, during the PBR term. ENMAX also proposed that the fee schedule be escalated using the same methodology.
The AUC noted that in its calculations, ENMAX included a “catch up” component calculated as a dollar difference between the 2015 MILs and special fees in place for that year and the amounts that would have been effective if the 2015 I-X indexing was applied for that year. The AUC rejected ENMAX’s proposed inclusion of such a “catch up” component.
The AUC noted that it approved ENMAX’s MIL and fee schedule amounts in Decision 2014-347, on a final basis effective January 1, 2015 (the “2015 Approved T&Cs”). The 2015 Approved T&Cs remained in place until the AUC approved changes to ENMAX’s T&Cs on an interim basis in Decision 22032-D01-2016.
The AUC held that ENMAX’s proposed “catch up” component would constitute prohibited retrospective ratemaking.
Refund of Fees in Excess of Approved Fee Schedule
In Decision 22032-D01-2016, the AUC directed ENMAX to refund the customers charged fees, which the AUC found to be in excess of the approved distribution tariff fee schedules.
ENMAX provided a list, by type of distribution tariff fee or investment policy charge, with associated dates, of all transactions and amounts charged in error and subsequently refunded between these dates.
The AUC found that from the information ENMAX provided, ENMAX had satisfactorily complied with this direction.
