Rate Rider
In this decision, the AUC considered and approved a request from Salt Box Coulee Water Supply Company Ltd. (“Salt Box”) for a rate rider that would fund an ultraviolet light (“UV”) system upgrade. The AUC approved a rate rider of $58 per customer per month.
Background
Salt Box was required to install a UV system under its approval from Alberta Environment and Parks (“AEP”). AEP had originally required such installation on or before December 1, 2011. Under a further approval, the UV system was required to be completed by December 1, 2019.
Salt Box had difficulty obtaining funds for the upgrade, and requested approval for a rate rider based on a $299,000 mortgage negotiated with Alpine Gas Ltd. (“Alpine”), which included a 12% interest rate over 10 years.
AUC findings
The AUC noted that its immediate concern was to ensure that customers would continue to receive a safe and adequate supply of water. It was apparent that Salt Box and its customers did not agree on the rates to be charged for water service. However, there was a significant and imminent risk that absent the completion of the UV system upgrade, the continuous supply of water to customers by Salt Box was likely to be impacted in the near future.
In setting a rate rider, the AUC noted that it gave consideration to the best available evidence and the submissions of parties on the amount of the rate rider.
The AUC noted that Salt Box provides service to 74 lots, and the rate rider over 10 years would amount to $58 per customer per month. It held that the term of the rider should match the term of the mortgage. It directed Salt Box to provide an annual reconciliation and to advise immediately of any changes to the terms of the financing.
The AUC advised that customers and Salt Box would have an opportunity to provide submissions in Proceeding 24295 on Salt Box’s final rates, prior to closing the record of the proceeding. The UV system upgrades recovered in the rate rider approved in this decision would not be re-examined when setting final rates in Proceeding 24295.
