Gas – Rates
In this decision, the AUC approved Rate Rider E of 0.97 per cent and Rate Rider H of 0.98 per cent, as filed by Apex Utilities Inc. (“AUI”).
Rider E and Rider H are designed to recover the amounts associated with unaccounted-for gas (“UFG”). Rider E recovers the amount of UFG associated with producer transportation service and Rate Rider H the amount associated with Natural Gas Settlement System (“NGSS”) processes.
Each rate rider is calculated using the most recent five-year averages of AUI’s annual UFG percentages. Rate Rider H is further calculated in compliance with Rule 028: Natural Gas Settlement System Code Rules.
In previous decisions, the AUC has noted that it accepts that not all UFG can be eliminated but that it expects the amounts to decrease. The AUC had directed AUI and its predecessor AltaGas Utilities Inc. to quantify causes of UFG, to provide reasons for fluctuations in UFG, and to provide further specified information regarding UFG.
Analysis of Issues
UFG Calculations and Rider E and Rider H Amounts
AUI did not propose a change to the method of calculating Rate Rider E and Rate Rider H. For the determination of UFG amounts for Rider E for 2021-2022, AUI provided calculations yielding a historical five-year arithmetical average of 0.97 per cent. For Rate Rider H, the calculations submitted provided a five-year average of 0.98 per cent.
The AUC reviewed the calculations, which were based on the years 2017-2021, and was satisfied that the methodology applied was consistent with previous decisions. The 2021-2022 UFG amounts of 0.83 per cent and 0.84 per cent for Rider E and Rider H are below the five-year averages of 0.97 per cent and 0.98 per cent, respectively. The AUC also noted that the downward trend in UFG, indicated in the calculations submitted by AUI, could be attributed to AUI’s efforts and initiatives to reduce UFG.
Compliance with Previous Commission Directions
In response to Decision 25747-D01-2020 regarding AUI’s UFG riders for 2020-2021, AUI in this proceeding provided details regarding the causes of and fluctuations in UFG amounts. The data included data from June 2011 to May 2021, a separation of UFG by region, and the most significant causes of UFG. AUI also provided a description of actions taken to reduce UFG and UFG fluctuations and noted that this includes ongoing review and monitoring, AUI’s system betterment program, meter testing, the retirement and replacement of assets known to contribute to UFG, continual support of damage prevention efforts, and continual improvement of processes that identify and reduce UFG. Further, it included a 2021 south region UFG audit report detailing audit activities that were undertaken to determine the nature of the positive gain of gas in the south region.
AUI provided regional analysis of UFG data separated into north, central and south regions from June 2020 to May 2021. It also described the causes of UFG and any corresponding identified issues by region. AUI reiterated that the exact quantification of most causes of UFG is impractical given the variable nature of known contributors.
The AUC found that AUI had complied with the directions issued in Decision 25747-D01-2021. AUI was found to have complied with all directions, and the AUC noted that the completed audit activities had ruled out most potential sources of the net gain of gas in the region, and no single problem or issue was found.
The AUC approved the applied for Rate Rider E and Rate Rider H. Consistent with previous decisions, AUI was directed in its next UFG application to, again:
Develop and provide a relative ranking of UFG causes;
Quantify the causes of UFG, where possible;
Describe the specific actions taken by AUI to reduce UFG fluctuations, UFG gains, and UFG overall amounts;
Provide reasons for any year-over-year changes in AUI‘s UFG;
Update the historical data set, which spans the period for the most recent ten years of monthly data to the most current month for the receipt and delivery volumes and UFG percentage losses or gains; and
Provide a regional UFG breakdown and any explanation and insight gained from the regional analysis.