Rates – Deferral Accounts
In this decision, the AUC approved the application from FortisAlberta Inc. (“Fortis”) 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 $34.576 million through a base 2021 transmission adjustment rider (“TAR”).
Introduction and Background
Fortis applied for a net 2019 TACDA collection of $34.576 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), Fortis’s TACDA was a dollar-for-dollar flow-through of the Alberta Electric System Operator (“AESO”) tariff charges.
2019 TACDA True-Up Amount
The total applied for true-up amount of $34.576 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 Fortis’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 $34.576 million by Fortis.
The AUC directed Fortis, for its next TACDA true-up application, to continue to calculate carrying costs based on the weighted average Bank of Canada monthly bank rate in months in which the interest rate changed.
The AUC found that AESO DAR amounts should not be included in the calculation and allocation of carrying costs if there are no carrying costs assessed on the AESO DAR amounts. Fortis 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 Rate, Implementation Period and Customer Bill Impacts
Fortis proposed that its 2019 annual TACDA true-up TAR be in effect from January 1, 2021, to December 31, 2021. Fortis proposed to implement its 2021 TAR as a percentage of the base transmission access charges component of its distribution tariff.
The AUC approved the 2019 annual TACDA true-up TAR to be in effect on January 1, 2021. The TAR percentage rate and any required rate mitigation would be determined in Fortis’ 2021 annual PBR rate adjustment filing in proceeding 25843.
Combining Annual TACDA Applications with the Annual PBR Rate Adjustment Filings
The AUC directed Fortis 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.