Regulatory Law Chambers logo

ATCO Gas and Pipelines Ltd. 2020 General Rate Application Phase II Compliance Filing, AUC Decision 26283-D01-2021

Link to Decision Summarized

Rates – Compliance Filing

In this decision, the AUC considered ATCO Gas and Pipelines Ltd. (“ATCO”)’s compliance with the AUC’s directions issued in Decision 25428-D01-2021 regarding ATCO Gas’ 2020 general rate application Phase II.

Compliance with AUC Directions

The AUC was generally satisfied that ATCO had complied with the 14 directions and associated findings made in Decision 25428-D01-2020. The AUC considered matters that arose as a result of ATCO’s responses.

Alternative Technology and Appliance Delivery Service Rate Group

In Decision 25428-D01-2020, the AUC issued Direction 5 regarding ATCO’s Alternative Technology and Appliance Delivery Service (“ATA”) Rate. It directed ATCO to provide a detailed analysis of the ATA rate as part of its performance-based regulation (“PBR”) adjustment filing one year following the ATA rate implementation and then in its next Phase II application.

In response, ATCO provided information regarding the riders applicable to the ATA rate, including a newly proposed change from the original application. ATCO proposed to exclude the weather deferral account (“W”) rider. ATCO explained that the ATA rate group’s natural gas usage requirements are not expected to be temperature sensitive, as these customers will be using alternative heating systems and natural gas only for non-space-heating appliances. It stated that, therefore, the ATA rate group’s monthly consumption and variable revenue would not be weather normalized, and therefore the rate group will be excluded from the weather deferral account and Rider W calculations.

The AUC was satisfied with ATCO’s explanation that the usage requirements of customers under the ATA rate class would not be temperature sensitive and approved the proposal to exclude the application of Rider W to the ATA rate. It also approved ATCO’s proposal that riders A, B, D, L, S, and T should be set equal to the approved rider value or methodology in effect for the Low-Use Rate group from which the ATA rate is built. As requested by ATCO and as there would be no impact to other rate groups, the AUC approved an effective date of April 1, 2021, on a pilot basis, for the ATA rate.

Producer Receipt Rate Group

In Direction 6, the AUC required that ATCO provide a detailed analysis of the Producer Receipt Rate, including but not limited to the uptake of customers in the rate group and costs of facilities for serving these customers.

ATCO explained that Rider P, the unaccounted-for gas (“UFG”) rider charged to producer accounts, would apply to producer volumes that are transacted off the distribution system for which UFG would not otherwise be collected. ATCO stated that it anticipates producer customers connecting to the distribution system commencing April 2021 and requested that Rider P be set equal to the currently approved UFG rate for delivery customers effective April 1, 2021. ATCO noted that Rider P would be applied only to producers exporting off of the ATCO distribution system. ATCO has requested the producer rate be effective April 1, 2021, on a pilot basis, and reflected the changes in the North and South rate schedules. ATCO confirmed that it would provide the analysis on the number of customers that have connected and the cost of connecting them in the 2023 PBR rates application and the next Phase II application, as directed.

The AUC approved the proposal that Rider P is set equal to the approved UFG rate for delivery customers. The AUC also agreed with the proposal to apply for Rider P through a joint application with Rider D in August 2021. The AUC approved the producer rate on a pilot basis, effective April 1, 2021. As proposed by ATCO, the AUC further approved the inclusion of the amended Sample Producer Service Agreement and Appendix 1 as Schedule A of the producer terms and conditions as a template for contract terms.

Irrigation Fixed Charge Administration Change

In Decision 25428-D01-2020, the AUC approved a change to the administration of the fixed charge to eliminate the need for the annual seasonal process of turning the connection on and off for customers in the irrigation rate group. As a result, the fixed charge is charged seasonally by pre-set dates for the main irrigation pumping season. ATCO requested that this change be effective April 1, 2021, and approved as a change to its current interim rates.

ATCO provided calculations for the requested change and reflected this change in the South rate schedule, which outlines that a fixed charge of $1.325/day would be applied from May 1 to September 30, followed by a charge of $0 applied for the remainder of the year.

The AUC approved ATCO’s request to implement the irrigation fixed charge administration change effective April 1, 2021, as it would eliminate the need for the annual fall meter turn-off for customers, starting in 2021. The AUC approved the fixed charge from May 1 to September 30 that is based on the 2020 PBR rates, given that ATCO is currently under interim rates approved in Decision 26170-D01-2020.

Ultra-High Use Rate Group

The AUC approved the division of the High Use Rate group into the High-Use Rate group and the Ultra-High-Use Rate groups. ATCO requested approval to delay the implementation of rates for these groups to the 2022 annual PBR rate adjustment application. ATCO explained that it would file cost of service study (“COSS”) updates and review and update the Rider T calculations for all rate groups as part of that application.

The AUC approved ATCO’s proposal to implement the rates for the new Ultra-High-Use Rate group as part of its 2022 annual PBR rate adjustment application. Implementing these rates earlier would require a change to the COSS and Rider T methodology, which would cause mid-year rate changes for end-use customers.

Implementation and Effective Date of Restructured Rates

The Utilities Consumer Advocate (“UCA”) had submitted that ATCO failed to provide enough evidence to demonstrate why implementation of rates arising from Decision 25428-D01-2020 and the present proceeding could not take place prior to January 1, 2022. The AUC found the effective rate implementation date of January 1, 2022, to be reasonable.

Related Posts

Sabo v AltaLink Management Ltd, 2024 ABCA 179

Sabo v AltaLink Management Ltd, 2024 ABCA 179

Link to Decision Summarized Download Summary in PDF Authority – Compensation Award Application On appeal from AltaLink Management Ltd. (“AML”), the Alberta Court of Appeal (“ABCA”) considered...