Rates – Review and Variance
In this decision, the AUC considered whether to grant a review application filed by EPCOR Energy Alberta GP Inc. (“EEA”) requesting a review and variance of specific findings in Decision 22853-D01-20181 and Decision 24034-D01-2019 (the “Original Decisions”). The Original Decisions addressed an application from EEA for approval of its 2018-2020 regulated rate tariff (“RRT”) non-energy charges (Proceeding 22853) and a compliance filing for that application (Proceeding 24034). EEA’s review application requested that the monthly administration charge, which is the fixed non-energy RRT charge applicable to each rate class, be changed to a daily administration charge. The AUC approved the review application and varied the Original Decisions.
In addition, EEA applied for related relief from Rule 032: Specified Penalties for Contravention of AUC Rules because billing errors will arise from the changes to the administration charge. The AUC granted EEA’s request for relief from specified penalties under Rule 032 for billing errors directly related to cancel-rebills and the change from monthly to daily administration charges.
Background
In the Original Decisions, the AUC approved EEA’s monthly administration charge and a new customer information system (“CIS” or “CIS Project”).
On April 29, 2020, the AUC received the review application from EEA requesting a review and variance of the Original Decisions. The review application was filed under section 10 of the Alberta Utilities Commission Act and Rule 016: Review of Commission Decisions. Although the application was filed outside of the time period for review under Rule 016, EEA stated that the CIS configuration issue giving rise to this application was only reasonably able to be identified by EEA during the detailed development and testing phases of the CIS Project.
In the review application EEA requested the replacement of the monthly administration charge with a daily charge because upon configuration and testing of the CIS, it became aware that the CIS is not designed to calculate and bill the administration charge on a monthly basis. EEA added that the CIS may be able to be customized to process a monthly administration charge, but that doing so would add at least $310,000 to the Project cost and would add delays that may jeopardize the planned October 13, 2020 implementation of the CIS.
The AUC’s Review Process
The AUC’s authority to review its own decisions is discretionary and is found in section 10 of the Alberta Utilities Commission Act. That act authorizes the AUC to make rules governing its review process and the AUC established Rule 016 under that authority. Rule 016 sets out the process for considering an application for review.
The review process has two stages. In the first stage, a review panel must decide whether there are grounds to review the original decision. This is sometimes referred to as the “preliminary question.” If the AUC panel considering the review application (the “Review Panel”) decides that there are grounds to review the decision, it moves to the second stage of the review process where the AUC holds a hearing or other proceeding to decide whether to confirm, vary, or rescind the original decision.
In this decision, the Review Panel decided both the preliminary question and the variance question, as it is permitted to do under section 8 of Rule 016.
Grounds for Review and Hearing Panel Findings
In its review application, EEA specifically requested the following approvals or relief from the AUC:
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approval to transition from calculating and billing its administration charge on a monthly basis to a daily basis, effective on the date when the CIS enters service and EEA commences billing RRT customers using the CIS;
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approval to modify EEA’s RRT Price Schedules, which form part of its 2018-2020 RRT, to reflect the calculation of the administration charge applicable to each rate class as a daily charge, to take effect upon, and be reflected on all bills issued on and after, the in-service date of the CIS;
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approval of the method proposed by EEA to handle any under and over-billed amounts to customers arising from the implementation of the daily administration charge; and
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a determination that under and over-billed amounts (or “mismatches”), will not incur specified penalties under section 3(1) of Rule 032.
Review Panel Findings
Preliminary Matter – 60-Day Timeline
The Review Panel exercised its discretion to extend the 60-day timeline section 3(3) of Rule 016 and accepted EEA’s request for the AUC to consider the review and variance application. The Review Panel accepted EEA’s explanation that the CIS limitation for billing of monthly administration charges was not discovered until after the 60-day review periods of each of the Original Decisions expired, and therefore, it could not have reasonably filed a review application within 60 days of the issuance of the each of the Original Decisions.
Section 4(D)(Ii) Or (Iii) Grounds – Previously Unavailable Facts or Changed Circumstances Material to the Decision
The Review Panel accepted that requested changes to the daily administration charge were warranted, and EEA’s proposal was cost-effective compared to additional costs that would be incurred for alternative software solutions to retain a monthly administration charge. Section 6(e) of the Regulated Rate Option Regulation requires the AUC, when considering approval of a regulated rate tariff, “to examine the reasonableness of the owner’s billing costs and other costs the owner’s regulatory authority considers appropriate in the prevailing circumstances….” Given the benefits of the CIS Project, which was approved by the Hearing Panel in Decision 22853-D01-2018, delays to its implementation should be avoided where reasonably practicable. The Review Panel indicated it saw the merit of consistency in all three RRO providers in aligning billing administration charges based on a daily charge. The Review Panel found that variance of this charge was consistent with section 6(e) of the Regulated Rate Option Regulation.
The Review Panel therefore allowed EEA’s request for a review because EEA demonstrated that there were previously unavailable facts or changed circumstances consistent with the review and variance requirements in section 6(3)(b) of Rule 016. Having met the first stage for a review, the Review Panel proceeded to the second stage of deciding whether to confirm, vary, or rescind the Original Decisions.
Variance of Decision 22853-D01-2018 and Decision 24034-D01-2019
The variance requested by EEA would allow it to convert its monthly administration charge to a daily charge. In support of the variance application, EEA stated that making the necessary customization for a monthly administration charge would add at least $310,000 to the Project cost and cause significant delays that could push back the implementation date for the CIS, causing further costs to be created. EEA added that changing to a daily administration charge would create a more accurate administration charge for customers and would be consistent with the other two major RRO providers, who also have a daily administration charge. EEA stated that the change would be revenue-neutral and would not change its approved revenue requirements, while also providing a proposal to ensure that no customer classes or individual customers will be made worse off by the change.
The Review Panel approved EEA’s request for a variance to Decision 22853-D01-2018 and Decision 24034-D01-2019, which will allow EEA to implement a daily administration charge that will be reflected on all bills issued on and after the in-service date of the CIS.
Relief from Specified Penalties Under Rule 032
EEA indicated it was aware that it would be issuing incorrect bills as a result of transitioning to the CIS. EEA would be issuing bills to customers that would be correct when issued but would later require correction if a distribution system owner requested a cancel-rebill after EEA transitions to the CIS. This transition would result in unavoidable billing errors that would be contrary to section 3.4.1(2)(a) of Rule 003 because EEA is an energy service provider that must not issue an incorrect customer bill.
The Review Panel noted that it does not typically provide rulings and determinations on events prior to their occurrences. However, given the specific circumstances of this review application, the Review Panel indicated it was willing to do so in this particular case. Accordingly, the Review Panel indicated it would not issue notice of specified penalties under section 63.1 of the Alberta Utilities Commission Act or section 3(1) of Rule 032 for contraventions arising out of the change to a daily administration charge upon implementation of the CIS and relating to under-billed and over-billed amounts, also referred to by EEA as “mismatches” in billing amounts. However, the Review Panel also noted that should it receive complaints from customers that demonstrate that EEA has not dealt with incorrect bills arising from transitional cancel-rebills in the manner proposed by EEA and approved in this decision, EEA may be subject to specified penalties.
Decision
The Review Panel granted EEA’s application for a variance.
The method proposed by EEA to handle any under-billed and over-billed amounts to customers arising from the implementation of the daily administration charge was approved, as filed. With respect to EEA’s request for an exemption from specified penalties, the Review Panel found that given the specific circumstances of this request and EEA’s proposed plan to mitigate any potential harm to customers, granting the exemption as requested was warranted.
