Rates – Regulated Rate Option Rate Cap Deferral Account
In this decision, the AUC considered an application from ENMAX Energy Corporation (“EEC”), pursuant to An Act to Cap Regulated Electricity Rates (“Act”) and one of its associated regulations, the Rate Cap (Commission Approved Regulated Rate Tariffs) Regulation (“Regulation”). Section 6(1) of the Regulation requires EEC to apply to the AUC for a final review and disposition of its regulated rate option (“RRO”) rate cap deferral account. The AUC determined that EEC had been overpaid and that the overpayment had to be repaid by EEC to the Government of Alberta within 30 days after this decision was issued.
Background
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 EEC, 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 EEC’s 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 EEC’s EPSP exceeded 6.8 cents/kWh, the Government of Alberta would make payments to EEC for the difference.
For any months where payments were to be made to EEC by the Government of Alberta, the initial payment amount was determined using the electric energy charge difference (i.e., the difference between the charge determined in accordance with the EPSP and 6.8 cents/kWh) by rate class applied to the forecast consumption in kWh for the rate class. Once the actual consumption in kWh for the rate class was determined through the final load settlement calculations, the deferral amount difference caused by the mismatch between the forecast consumption and the actual consumption was accounted for, and the resulting payment amount was either refunded to the Government of Alberta by EEC or paid to EEC. Section 3(3)(b)(ii) of the Regulation allows for an adjustment in a given month to account for the actual consumption in kWh of customers in each rate class determined through the final load settlement calculations.
To administer the payments from the Government of Alberta, EEC was required under the Regulation to establish a deferral account. EEC 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 explained that it has oversight regarding two aspects of the RRO rate cap program. The first aspect of the program related to the filing of the deferral account statements by EEC and the other RRO providers each month. The second aspect was 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.
Sections 6(2) to 6(5) of the Regulation specify the role of the AUC regarding an application for a final review and disposition of an RRO rate cap deferral account:
(2) In conducting a final review and disposition of an owner’s deferral account the Commission shall review the deferral account statements submitted by the owner in respect of the period beginning on June 1, 2017, and ending on November 30, 2019, to confirm the information and amounts set out in the deferral account statements and determine whether
(a) an amount remains owing to the owner under section 2(1) of this Regulation, or
(b) the owner has been overpaid an amount under section 2(1) of this Regulation.
(3) An owner shall provide to the Commission any records or other information the Commission may require to confirm the information and amounts set out in deferral account statements submitted by the owner.
(4) If, on a final review, the Commission determines that an amount is owing to an owner under section 2(1), the amount shall be paid to the owner within 30 days after the date of the Commission’s determination.
(5) If, on a final review, the Commission determines that an owner has been overpaid under section 2(1), the owner shall repay the amount to the Minister within 30 days after the date of the Commission’s determination.
Details of the Application and AUC Review
EEC provided a schedule in Appendix 2 of its application that included the following information for each of the months from June 2017 to November 2019 for its residential and commercial customer rate classes: (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.
Table 3 included the results of the AUC’s confirmation of payment amounts, and set out the initial payments and the true-up payments relating to the difference between the initial and final volumes:
The AUC determined the final deferral amounts for EEC as shown in Table 5 below:
The AUC compared the total AUC-determined final deferral amount for EEC in Table 5 of $15,451,126.52, excluding GST, to the total payment amount of $15,496,369.98, excluding GST. The AUC determined in accordance with section 6(2) of the Regulation that EEC had been overpaid an amount, pursuant to sections 2(1) and 6(2) of the Regulation. The overpayment was $45,243.45, plus GST, with a resulting total of $47,505.63. Section 6(5) of the Regulation stipulates that this overpayment must be repaid by EEC to the Government of Alberta within 30 days after issuance of this decision.
