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ATCO Electric Ltd. 2019 Distribution Tariff Phase II Compliance Filing, AUC Decision 25645-D01-2020

Link to Decision Summarized

Rates – Compliance Filing


In this decision the AUC considered ATCO Electric Ltd. (“ATCO Electric”)’s compliance with the AUC’s directions issued in Decision 24747-D01-2020 regarding ATCO Electric’s 2019 Distribution Tariff Phase II. The AUC found that ATCO Electric complied with the AUC’s directions. However, the AUC did not accept ATCO Electric’s proposed revisions to section 15.1 of the customer terms and conditions for electric distribution service (“T&Cs”). In the interest of regulatory efficiency, the AUC made certain revisions to section 15.1 of ATCO Electric’s customer T&Cs and approved them effective August 1, 2020.

Background

On April 30, 2020, the AUC issued Decision 24747-D01-2020, regarding ATCO Electric’s 2019 Distribution Tariff Phase II Application. The decision ordered ATCO Electric to file a compliance filing by June 11, 2020, and include revised T&Cs, updated cost-of-service studies (“COSS”) and tariff design schedules, price schedules, and billing impact schedules that reflect the findings, directions, and conclusions in that decision.

On June 4, 2020, ATCO Electric submitted its compliance filing with the AUC requesting approval of its proposed distribution tariffs and customer and retailer T&Cs, effective August 1, 2020.

Compliance with AUC Directions

In Decision 24747-D01-2020, the AUC issued 20 directions. ATCO Electric confirmed that directions 4, 6, 11, and 16 would be addressed in its next Phase II application, that Direction 17 would be addressed in its future maintenance multiplier applications, and that Direction 20 would be addressed in its 2021 annual performance-based regulation (“PBR”) rate adjustment filing. ATCO Electric provided its responses to the remaining 14 directions and filed schedules that included the directed adjustments, updated T&Cs, and information required to demonstrate compliance with the AUC’s directions.

Cost-of-Service Study and Tariff Design Adjustments

In Decision 24747-D01-2020, the AUC directed ATCO Electric to make certain changes to its brushing and wholesale billing studies and reflect the changes in its 2017 COSS. The AUC also directed ATCO Electric to make certain adjustments to the tariff design schedules, including the removal of the proposed low-use residential rate class D12, and to submit updated bill impact schedules, rate calculations schedules, and price schedules. ATCO Electric provided updated 2017 COSS schedules and tariff design schedules, as well as updated bill impact schedules, rate calculation, and price schedules effective August 1, 2020, to reflect the AUC directions in Decision 24747-D01-2020.

The AUC issued Direction 1 regarding the use of an incorrect allocator in its brushing study. ATCO Electric stated that it corrected the brushing study to incorporate mid-year gross plant as the allocator for brushing costs and provided a table comparing the allocation of brushing costs as submitted in the original proceeding (Proceeding 24747) and the current compliance filing. The AUC was satisfied that ATCO Electric used the correct allocator, the mid-year gross plant, for brushing costs in compliance with Direction 1.

At paragraph 78 of Decision 24747-D01-2020, the AUC issued Direction 2, directing ATCO Electric, in the compliance filing to that decision, to update its wholesale billing study. ATCO Electric stated that it revised its wholesale billing study to reflect changes resulting from the Master Service Agreement (“MSA”) rates approved in Decision 20514-D02-2019 and any related compliance filings. The AUC reviewed the revised schedules provided by ATCO Electric showing how it revised its wholesale billing study to apply changes resulting from MSA rates approved in Decision 20514-D02-2019 and any related compliance filings and was satisfied that the approved MSA rates were incorporated correctly.

In Decision 24747-D01-2020, the AUC was not convinced that a new rate for low-use customers was warranted at that time, and at paragraph 162 of that decision, the AUC denied the proposed low-use residential rate class D12 and directed ATCO Electric to remove the proposed low-use residential rate class D12 from its rate design (Direction 3). The AUC was satisfied that ATCO Electric correctly removed the proposed low-use residential rate class D12 from its rate design.

At paragraph 181 of Decision 24747-D01-2020, the AUC approved the small technology rate class D22 and issued Direction 5 to ATCO Electric:

… to incorporate the amended availability clause “Available to Small Technology services with predictable energy consumption as determined by the Company” which ATCO Electric included in its response to the UCA [Office of the Utilities Consumer Advocate] IR, into its rate sheet for Price Schedule D22 for the small technology rate.

The AUC was satisfied that ATCO Electric incorporated the amended availability clause presented in the quote above into its rate sheet for Price Schedule D22.

At paragraph 195 of Decision 24747-D01-2020, the AUC noted ATCO Electric’s commitment to provide updated bill impact schedules and issued Direction 7 to ATCO Electric:

… to submit updated bill impact schedules comparing the proposed 2020 rates, as adjusted to reflect the Commission’s findings and directions in this decision, to the 2020 rates that would have resulted absent the 2017 COSS.

The AUC found that ATCO Electric adjusted its proposed 2020 rates to reflect the AUC’s findings and directions and compared them to the 2020 rates that would have resulted absent the 2017 COSS.

The AUC stated that it had reviewed the schedules and calculations used to determine ATCO Electric’s proposed 2019 PBR rates and found the methodology adequately reflected the AUC determinations in Decision 22394-D01-2018 and Decision 2012-237, and that the proposal was acceptable. Accordingly, the AUC approved the methodology proposed by ATCO Electric to adjust its rates through to the applicable year of implementation and issued Direction 8 which required the provision of updated calculation schedules and price schedules. The AUC was satisfied that the adjustments were done correctly, and therefore found that ATCO Electric complied with Direction 8.

Terms and Conditions

The AUC denied ATCO Electric’s proposed changes to its customer T&Cs related to the transmission payment in lieu of notice (“PILON”), except for the amendments to section 15.2(b), and issued Direction 9 for ATCO Electric to “… reflect the Commission’s findings with respect to PILON and additional transmission-related exit costs in its customer T&Cs, in its compliance filing to this decision.” It also issued Direction 10 for ATCO Electric to remove any proposed changes to its T&Cs that are related to its distribution PILON. The AUC was satisfied that ATCO Electric removed the proposed changes to its customer T&Cs related to transmission PILON, additional transmission-related exit costs and distribution PILON in compliance with directions 9 and 10.

At paragraph 247 of Decision 24747-D01-2020, the AUC determined that clarification at section 15.1 of ATCO Electric’s customer T&Cs was required to define when ATCO Electric considers a contract termination proposal to be accepted by a customer and issued Direction 12 for ATCO Electric to:

… revise Section 15.1(e) to clarify the circumstances of when “a contract termination proposal is accepted by the Customer” and how ATCO Electric will determine when this termination proposal is considered accepted. Accordingly, the Commission directs ATCO Electric to clarify the circumstances of when and in what circumstances “a contract termination proposal is accepted by the Customer.” As such, the Commission directs ATCO Electric, in its compliance filing to this decision, to propose amendments to Section 15.1 to account for the Commission’s findings in this paragraph and in Section 9.1.1.1, and to add a definition for “buy-down,” with any supporting references to its Customer Guide to New Extensions.

The AUC reviewed section 15.1 of the updated customer T&Cs provided by ATCO Electric and found that the revisions proposed by ATCO Electric did not adequately clarify when and in what circumstances a contract termination proposal is accepted by a customer and how ATCO Electric will determine when this termination proposal is considered accepted. As such, the AUC made the revisions to section 15.1 of ATCO Electric’s customer T&Cs.

At paragraph 262 of Decision 24747-D01-2020, the AUC denied ATCO Electric’s proposed addition of “for any other reason deemed necessary by the Company” to section 4.4 of its customer T&Cs, which lists the circumstances where ATCO Electric may reject an applicant’s request for a service connection. Accordingly, the AUC issued Direction 14 for ATCO Electric to remove the proposed amendments to section 4.4(h) of its customer T&Cs. The AUC reviewed section 4.4 of the updated customer T&Cs and observed that the section 4.4(h) amendment had been removed in compliance with Direction 14.

At paragraph 270 of Decision 24747-D01-2020, the AUC determined that separating the Available Company Investment and Supplementary Service Charges schedules from ATCO Electric’s terms and conditions for electric distribution service would provide a higher degree of transparency and afford those customers requiring this information a higher degree of access. Accordingly, the AUC issued Direction 15 to ATCO Electric to file its Available Company Investment and Supplementary Service Charges schedules as separate documents in its future annual PBR rate adjustment applications.

ATCO Electric provided stand-alone schedules of Available Company Investment and Supplementary Service Charges in attachments 7-6 and 7-7,33 and noted that it would file copies of the stand-alone schedules in future annual PBR rate adjustment applications. The AUC approved ATCO Electric’s customer and retailer T&Cs, and the stand-alone schedules of Available Company Investment and Supplementary Service Charges.

In Decision 24747-D01-2020, the AUC provided certain directions regarding Rider E services. The AUC agreed with ATCO Electric that given the nature of the Rider E services, Rider E should not form part of ATCO Electric’s AUC-approved rates and the pursuit of amending contractual arrangements with Rider E customers as an unregulated service should continue. Accordingly, the AUC issued Direction 18 to ATCO Electric to pursue the timely execution of contractual amendments with remaining Rider E customers, in order to remove their services from regulated service under Rider E and adopt unregulated private contracts. ATCO Electric confirmed that it would pursue the timely execution of contractual amendments with Rider E customers as directed by the AUC.

At paragraph 284 of Decision 24747-D01-2020, the AUC stated that it would expect ATCO Electric to execute any contractual amendments to remove the remaining customer services from regulated service under Rider E by December 31, 2021 and issued Direction 19 to ATCO Electric to confirm any restrictions that would impede it achieving this outcome by that deadline, in the compliance filing to this decision.

ATCO Electric confirmed that it did not foresee any restrictions. The AUC accepted ATCO Electric’s responses to directions 18 and 19 and found that ATCO Electric complied with these AUC directions.

Order

The AUC ordered that ATCO Electric Ltd.’s 2019 Distribution Tariff Phase II cost-of-service study and tariff design was approved.

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