Rates – Deferral Accounts
In this decision, the AUC approved the application from EPCOR Distribution & Transmission Inc (“EPCOR”) for its 2019 annual transmission access charge deferral account (“TACDA”) true-up and carrying costs on the true-up amounts following Rule 023: Rules Respecting Payment of Interest. The AUC approved the collection of the 2019 TACDA true-up amount of $3.82 million through a Rider J, effective January 1, 2021.
Introduction and Background
EPCOR applied for the net 2019 TACDA true-up collection of $3.82 million from customers. Under the provisions of the performance-based regulation (“PBR”) framework approved in Decision 2012-237, and subsequently adopted for the 2018-2022 PBR term in Decision 20414-D01-2016 (Errata), EPCOR’s TACDA is a dollar-for-dollar flow-through of the Alberta Electric System Operator (“AESO”) tariff charges.
2019 TACDA True-Up Amount and Rider J Rate
The total applied for true-up amount of $3.82 million included the following components:
The AUC found the application and schedules to have been consistent with the harmonized framework approved by the AUC in Decision 3334-D01-2015 and that the amounts composing the 2019 annual TACDA true-up were reasonable. The AUC further found EPCOR’s assignment of the individual components to rate classes to have been reasonable in the circumstances and consistent with previously approved methodologies. The AUC approved the net collection of $3.82 million by EPCOR.
As previously directed by the AUC, EPCOR calculated carrying costs based on the weighted average Bank of Canada monthly bank rate in months in which the interest rate changed. The AUC directed EPCOR to continue this method in its next TACDA true-up application.
The AUC found it unreasonable to include AESO DAR amounts in the calculation and allocation of carrying costs when there are no carrying costs assessed on the AESO DAR amounts. EPCOR was accordingly directed to exclude the AESO DAR amounts from the calculation and allocation of carrying costs in future TACDA true-up proceedings where carrying costs would not be assessed on the AESO DAR.
Rider Implementation Period and Customer Bill Impacts
EPCOR proposed that its 2019 annual TACDA true-up Rider J be in effect from January 1, 2021, to December 31, 2021. The AUC reviewed the total bill impacts of the proposed Rider J and noted that rate shock would be unlikely, as the bill changes were below the 10 per cent threshold, which had previously been used as an indicator of rate shock.
Rider J Rate
Rider J Rates would be affected by the total true-up amount, related carrying costs, and the implementation period of the rider. The AUC accepted EPCOR’s proposal to calculate the Rider J Rate using the 2021 forecast billing determinants. The AUC noted that, in making this determination, it had been mindful that the 2019 rider would eventually be trued up to ensure the approved amounts were collected from, or refunded to, customers. The AUC approved EPCOR’s Rider J per rate class, as suggested by EPCOR, effective January 1, 2021.
Combining Annual TACDA Applications with the Annual PBR Rate Adjustment Filings
The AUC directed EPCOR to include its 2020 TACDA true-up application and supporting materials as part of its 2022 annual PBR rate adjustment filing. As part of that proceeding, the AUC would evaluate the effectiveness of such an approach to reduce the administrative burden and enhance regulatory efficiency and would, based on its review, consider adopting it for all future TACDA applications.