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ATCO Gas 2020 Weather Deferral Account Rate Rider W North and South, AUC Decision 25666-D01-2020

Link to Decision Summarized

WDA Rate Rider Application


In this decision, the AUC approved the North and South weather deferral account (“WDA”) rider, Rate Rider W, of ATCO Gas for implementation during the period of September 1, 2020 to April 30, 2021.

Background

On June 16, 2020, ATCO Gas filed an application with the AUC requesting approval for a 2020 Rider W effective September 1, 2020, to April 30, 2021, for the refund of its North WDA and South WDA balances as of April 30, 2020, resulting in a refund of approximately $8.203 million and $9.952 million, respectively.

In calculating the WDA balances, ATCO Gas applied monthly carrying charges to the WDA, which are based on ATCO Gas’s weighted average cost of capital (“WACC)” using the most recent approved capital structure.

ATCO Gas followed the directions issued by the Commission from Decision 24665-D01-2019. ATCO Gas provided the derivation of the annual WACC carrying cost rate, including annual WACC calculations from 2017 to 2019. ATCO submitted that it revised the presentation of the WDA calculations, stating that the WDA calculations for North and South “are summarized in a more efficient manner, while still including the necessary information and data for the calculations”.

Findings

The AUC found the methodology used to determine the WDA balances and the 2020 Rider W to be consistent with the methodology and threshold requirements approved by the AUC in past WDA rate rider applications.

ATCO Gas provided evidence that a refund period of eight months would have minimal bill impact on customers. The 2020 Rate Rider W will change rates by less than three percent over both rate groups over the refund period. The AUC noted that the customers of both ATCO Gas North and ATCO Gas South will receive refunds and considered that the amounts are low enough that when the refund periods expire, no rate instability would result in terms of impacts to customers. Accordingly, the AUC was satisfied, that the implementation of the 2020 Rider W as proposed by ATCO Gas would not result in rate shock or rate instability.

The AUC was satisfied that it would be beneficial that the refund period for the 2020 Rider W end on April 30, 2021. This would minimize any confusion as to whether a new Rider W has been triggered solely due to weather effects, or because the WDA balance exceeded the threshold partly because the previous Rider W has not been fully refunded or recovered.

Accordingly, the AUC approved the WDA refund of $8.203 million to ATCO Gas North customers and $9.952 million to ATCO Gas South customers by way of the 2020 Rider W from September 1, 2020, to April 30, 2021.

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