Rates – Regulated Rate Option Rate Cap Deferral Account
In this decision, the AUC considered an application from Direct Energy Regulated Services (“DERS”) pursuant to An Act to Cap Regulated Electricity Rates (“Act”) and one of its associated regulations, and the Rate Cap (Commission Approved Regulated Rate Tariffs) Regulation (“Regulation”). Section 6(1) of the Regulation requires DERS to apply to the AUC for a final review and disposition of its regulated rate option (“RRO”) rate cap deferral account. In the application, DERS requested a final review and disposition of its rate cap deferral account. The AUC approved the disposition of DERS’ RRO rate cap deferral account.
During the period beginning on June 1, 2017, and ending on November 30, 2019, the Act imposed maximum rates for the monthly electric energy charges that DERS, as an RRO provider, could bill its RRO customers. The monthly electric energy charges during this period were determined as the lower of: (i) 6.8 cents per kilowatt-hour (kWh); or (ii) the applicable monthly amount determined in accordance with DERS’ energy price-setting plan (“EPSP”). For the months during this period where the applicable monthly electric energy charge for a rate class determined in accordance with DERS’ EPSP exceeded 6.8 cents/kWh, the Government of Alberta would make payments to DERS for the difference.
To administer the payments from the Government of Alberta, DERS was required under the Regulation to establish a deferral account. DERS was required to include deferral account statements as part of the monthly electric energy charges filings it made to the AUC, even if there was no payment being requested for the month.
The Role of the AUC
The AUC has oversight regarding two aspects of the RRO rate cap program. The first aspect of the program the AUC has oversight over is the filing of the deferral account statements by DERS and the other RRO providers each month. The second aspect is the filing of applications for the AUC’s final review and disposition of the RRO providers’ rate cap deferral accounts for the period that the rate cap was in effect. This decision addressed the second aspect of the RRO rate cap program.
Section 6 of the Regulation sets out the requirements regarding the final review and disposition of DERS’ RRO rate cap deferral account. Section 6(1) of the Regulation required DERS to apply to the AUC for the final review and disposition within six months after November 30, 2019.
Details of the Application and AUC Review
DERS provided a schedule in Appendix 1 of its application that included information for each of the months from June 2017 to November 2019 for each of its customer rate classes. Appendix 1 showed: (i) the actual consumption volume in kWh; (ii) the RRO rates determined in accordance with its approved EPSP; (iii) the maximum rate of 6.8 cents/kWh; and (iv) the final calculated deferral amounts for any months where the RRO rates determined in accordance with its approved EPSP exceeded the maximum rate of 6.8 cents/kWh. The final calculated deferral amounts reported excluded the GST.
The schedule in Appendix 1 of the application also included corrected monthly RRO rates for February 2018 to September 2019, determined in accordance with DERS’ approved EPSP. These corrected rates were approved in Decision 24412-D01-2019 and resulted in DERS having to correct certain previously filed and approved deferral account statements.
The schedule in Appendix 1 of DERS’ application set out final calculated deferral amounts for the applicable months of April 2018, July through December 2018, January and February 2019, and July through November 2019.
The AUC reviewed the monthly approved deferral account statements for all the months listed above, and it confirmed that DERS only included non-zero deferral amounts for the months listed in the previous paragraph, with the exception of December 2019. DERS did not receive any deferral amount payment from the Government of Alberta for December 2019.
Using information from the applicable AUC-approved monthly deferral account statements for DERS, the AUC confirmed that the final deferral amounts as calculated by DERS for each month agreed to the total payment amounts for these months.
The AUC identified differences between the final deferral amount and the total payments for July 2018, August 2018, September 2018, October 2018, December 2018, January 2019, February 2019, and November 2019, but found that the differences were immaterial, and would not result in any material misstatements of the deferral amounts that were reported by DERS.
Based on its review, the AUC approved the disposition of DERS’ RRO rate cap deferral account. The AUC confirmed that no amount remained owing to DERS and that DERS has not been overpaid any amount.