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AltaGas Utilities Inc. Application for Approval of an Exemption Extension for Rule 004 and Rule 028 (AUC Decision 23948-D01-2019)

Link to decision summarized

Exemption Extension – Rule 004 – Rule 028

In this decision, the AUC considered an application from AltaGas Utilities Inc. (“AltaGas”) for an extension of previously granted temporary exemptions from specific sections of Rule 004: Alberta Tariff Billing Code and Rule 028: Natural Gas Settlement System Code Rules.

The AUC granted AltaGas an extension of the Rule 004 exemptions until April 30, 2019, and of the Rule 028 exemptions until December 31, 2021.


Rule 004: Alberta Tariff Billing Code

Rule 004 defines the business processes and mechanics for the production and transmission of timely and accurate tariff bill-ready information to retailers by electricity and natural gas distributors for distribution and system access service in Alberta.

On April 4, 2011, Rule 028 came into effect. AltaGas explained that in 2012, both its resources and those of the billing system vendor were focused on becoming compliant with Rule 028. Accordingly, AltaGas did not proceed with the implementation of its customer information and billing system (“CIS”), which it had previously outlined as necessary for achieving Rule 004 compliance. As a further consequence of the Rule 028 compliance effort, the filing of a revised compliance plan pursuant to the AUC’s deadline of December 31, 2012, was overlooked by AltaGas.

Rule 028: Natural Gas Settlement System Code Rules

Rule 028 defines the business processes and mechanics for how natural gas settlement is to be carried out in the Alberta natural gas retail market.

The Current Application

Compliance with all Rule 004 and Rule 028 exemptions was expected to be achieved as part of the CIS, replacement project originally planned for implementation by mid-2019. The CIS replacement program proceeded as scheduled until the first quarter of 2018 when AltaGas was unable to come to an agreement on pricing with the vendor. This led to a delay in the CIS replacement project, as well as a need for AltaGas to examine alternative options to address Rule 004 and Rule 028.

AUC Authority

The AUC’s authority to impose and also to grant relief from time limits derives from section 23 of the Alberta Utilities Commission Act.

Section 6.1.5 of Rule 004 expressly allows a regulated party to apply to the AUC for a temporary exemption from all or any provision of Rule 004. Under section 6.1.5(2) of Rule 004, the AUC may approve an exemption with or without conditions, and the exemption will remain in effect for the period of time specified, or until revoked by the AUC.

The AUC noted that over the years and through a number of decisions, AltaGas was granted multiple temporary exemptions from certain sections of Rule 004 and Rule 028. On these previous occasions, temporary exemptions were granted to allow AltaGas an opportunity to achieve compliance with these rules for reasons that included: evidence that the effort and cost associated with temporary solutions would be significant and not in the public interest; evidence of limited customer and market impact; and, AltaGas’ expected compliance timelines.

Exemption Request

Exemptions to the AUC rules are granted with the expectation and intention that they will be temporary and of a reasonable duration.

AltaGas’ temporary exemptions extended over 14 years in the case of Rule 004 and eight years for Rule 028. Excessive cumulative exemptions and extensions strain the credibility of a temporary exemption, undermine the integrity, purpose, and object of AUC rules, and circumvent the AUC’s expectation of compliance.

Rule 004

The AUC granted the extension of the Rule 004 exemptions to April 30, 2019, finding it was in the public interest.

In granting the requested extension to the exemptions concerning Rule 004, the AUC expected full compliance by AltaGas with Rule 004 by April 30, 2019.

Pursuant to Section 6.1.1 of Rule 004, the AUC approved AltaGas’ Tariff Billing Code Compliance Plan as filed with an effective date of April 30, 2019, and directed AltaGas to submit the self-certification statement letter by May 15, 2019, as requested in the application.

Rule 028

AltaGas requested an extension of the Rule 028 exemptions to December 31, 2021. This was more than two years beyond the timeline for full compliance with Rule 028 identified in the last extension application (Proceeding 20885). The reason offered by AltaGas for the delay was the same as that offered in many of AltaGas’ previous applications seeking exemptions from the requirements of Rule 004 and Rule 028: the need to amend or replace its CIS.

The AUC granted the requested extension to Rule 028 exemptions as it was in the public interest to do so. The AUC received no evidence that adverse effects were reasonably expected to result from the requested extension of the Rule 028 exemptions. The cost and effort associated with any interim solution to achieve compliance with Rule 028 would be duplicated upon implementation of the full CIS.

The AUC granted AltaGas’ requested extension of the Rule 028 exemptions to December 31, 2021. At that time, full compliance with Rule 028 will be required.

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