Rate Update Existing Customer
In this decision, the AUC approved an application by EPCOR Distribution & Transmission Inc. (“EPCOR”) for a customer specific (“CS”) distribution access service (“DAS”) rate update for an existing customer of $731.54 per day, effective January 1, 2021.
Background
EPCOR filed an application requesting approval for a CS DAS rate update for an existing customer, effective January 1, 2021.The rate update was requested as the customer, currently receiving service under an existing customer rate class, requested a reduction of its peak demand due to it experiencing lower than expected peak demand.
The CS rate class is comprised of customers with annual energy demands over 5,000 kilowatts (kW). As the customer requested a reduction in peak demand, EPCOR executed the change in peak demand and contracted minimum demand as per Article 11.3 of its distribution connection service terms and conditions.
Calculation of the 2021 Existing Customer Rate
EPCOR explained that the cost-of-service calculation generally includes three components: incremental equipment and installation activities; cost of existing assets to provide service; and allocated operating, maintenance and general (“OM&G”) costs.
EPCOR further explained that the customer is part of its critical urban load group, which includes critical commercial or industrial operations, large downtown core or public safety- related loads (for example, hospitals) and as such, standby service is required.
Findings
The AUC observed that the methodology used by EPCOR to calculate the existing customer rate adjustment is the same cost-of-service methodology used by EPCOR in its calculation of other CS rates. The AUC reviewed EPCOR’s calculation of the proposed existing customer rate update and found it to be reasonable and consistent with the previously approved methodology.
The AUC therefore found EPCOR’s proposed existing customer rate update reasonable. Accordingly, the existing customer rate of $731.54 per day, effective January 1, 2021, was approved.
Consistent with past practices, the AUC directed EPCOR to true up any differences if the actual effective date for the revised existing customer rate differs from January 1, 2021, and the rate will be trued up to reflect the 2021 actual cost of debt when it becomes available.
In approving the application for the updated existing customer rate, the AUC noted that it expressly does not authorize the recovery by EPCOR of any amount payable by the customer from other EPCOR customers in the event of default or bankruptcy of the customer. The AUC directed EPCOR to bring any such unpaid amount to its attention, at which time the AUC will determine the regulatory treatment of the outstanding amounts.
