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Direct Energy Regulated Services Application for True Up of the 2019 Interim Rates for the Default Rate Tariff and the Regulated Rate Tariff, AUC Decision 25341-D01-2020

Link to Decision Summarized

Rates – Electricity – True-Up Application


In this decision, the AUC considered an application (the “Application”) from Direct Energy Regulated Services (“DERS”) to true-up its 2019 interim rates for the default rate tariff (“DRT”) and the regulated rate tariff (“RRT”). The AUC approved the true-up amounts, to be in place from May 1, 2020, to July 31, 2020. The AUC also found that DERS had complied with an outstanding direction from Decision 23986-D01-2018.

AUC Findings

Compliance with Direction from Decision 25255-D01-2020

This Application was filed in response to the following direction included in Decision 25255-D01-2020:

DERS operated under Commission-approved interim rates for all of 2019, with the interim rates approved in Decision 23989-D01-2018. These interim rates have to be trued up to the final rates for 2019 approved in this decision. The Commission directs DERS to file a separate application for the true-up of each of the 2019 DRT and RRT rates approved in this decision for the period from January 1, 2019, to December 31, 2019, after DERS has completed billing on interim rates for 2019.

The AUC found that by filing the Application in this proceeding, DERS complied with the direction in paragraph 13 of Decision 25255-D01-2020.

True-up Amounts

Based on its review of the calculations provided by DERS, and the explanations provided by DERS regarding the calculations, the AUC found that DERS correctly calculated each of the true-up amounts. The AUC, therefore, approved the true-up amounts, set out in Table 1:


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Proposed Methods and Timing to Collect/Refund the True-Up Amounts

The AUC approved the methodologies and the timing that DERS proposed to collect the true-up amounts for the DRT return margin, the DRT certain energy costs and the DRT labour costs related to gas procurement, as follows. The AUC accepted the proposal to collect these true-up amounts through the gas cost flow-through rates (“GCFR”) because the associated interim rates were also included as part of the GCFR. The current proposal was also consistent with the proposal the AUC approved as part of DERS’ last two interim rates true-up applications.

With respect to the rider methodology and the timing that DERS proposed to deal with the true-up amounts for the RRT and the DRT non-energy interim rates, the AUC found that the methodology and timing are reasonable. The rider methodology was consistent with the methodology that the AUC approved as part of DERS’ last two interim rates true-up applications. The AUC acknowledged DERS’ analysis, which indicates that for each of the three months from May 2020 to July 2020, the proposed riders for the residential customers would result in increases to the average monthly gas bill ranging from 2.3 percent to 2.9 percent, and increases to the average monthly electricity bill ranging from 5.3 percent to 5.9 percent. The AUC considered that increases in this range are not indicative of rate shock.

Non-Energy Rider Amounts for the DRT and the RRT

The AUC found that DERS had correctly calculated each of the non-energy rider amounts for the DRT and the RRT. The AUC, therefore, approved the rider amounts as set out in Table 2:


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Compliance with Direction from Decision 23986-D01-2018

The AUC reviewed the information filed by DERS regarding the actual amounts collected or refunded that related to each of the true-up amounts approved in Table 1 of Decision 23986-D01-2018 and found that DERS complied with the direction from paragraph 13 of Decision 23986-D01-2018 by providing the information directed. The AUC reviewed the differences between the actual and approved amounts collected/refunded for each customer rate class for the DRT and the RRT and found that none of the differences were significant or material enough to warrant a further true-up.

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