Utility Payment Deferral Program – Rates
In this decision, the AUC approved a Utility Payment Deferral Program (“UPDP”) – Natural Gas rate rider that will be collected from customers by ATCO Gas and Pipelines (“ATCO”) and Apex Utilities (“Apex”). The approved rate rider in the amount of $0.037 per gigajoule (“GJ”) was calculated to recover a total amount of no greater than $6,099,602.59. It is intended to recover the uncollected gas customer bill amounts that were deferred under the UPDP. The rate rider will result in a monthly charge of approximately $0.78 on an average residential bill.
Applications and Background
Under the Utility Payment Deferral Program Act (“UPDP Act”), gas service providers and gas distributors were enabled to work with Albertans to defer electricity and natural gas bills until June 18, 2020, without added late fees or interest payments. The deferred bills were required to be repaid by June 18, 2021. The AESO was responsible for funding the portion of the deferred electricity bill payments related to transmission charges for enrolled electricity customers.
The UPDP Act anticipated that not all deferred customer bills would be repaid. Under Section 21 of the UPDP Act, an application was to be brought to the AUC for a natural gas rate rider. This rate rider would recover uncollected amounts outstanding from each gas service provider, expenses incurred by the Minister to administer the loans to the gas service providers, and outstanding natural gas transmission charges.
The Office of the Assistant Deputy Minister, Ministry Services of the Government of Alberta confirmed that it issued a total of $37,147,794.64 in loans to gas service providers under Section 19 of the UPDP Act, it received $32,508,571.45 in repayments, and there is an outstanding balance of $4,639,223.19 to be included in the natural gas rate rider.
Gas Distributors’ Rate Rider Applications
ATCO and Apex requested that unrecovered amounts from enrolled gas customers be included in a natural gas rate rider. ATCO funded amounts to administer the deferral of payments related to transmission charges and determined that $407,785.73 was outstanding. ATCO requested approval for the inclusion of this amount when the AUC determined the natural gas rate rider. ATCO also applied for the recovery of carrying costs in the amount of $112,798.91.
Apex, as a gas distributor, submitted that the outstanding balance of the deferred gas transmission charges is $6011.58, excluding carrying cost. Apex requested that its deferral of payments for gas services of $257,524.44 that were uncollected from enrolled gas customers under the UPDP be included in the natural gas rate rider. Apex also provided supporting calculations for its $105,668.64 total for carrying costs related to deferred gas transmission charges and uncollected bill amounts from enrolled gas customers, using, like ATCO, its weighted average cost of capital (“WACC”).
Self-Funded Gas Service Providers
Hudson Energy Canada Corp. and Just Energy Canada Corp. filed applications to recover unpaid deferred natural gas bill amounts that were self-funded. Specifically, they applied to recover uncollected bill amounts for gas services provided to enrolled gas customers (non-transmission-related charges). 1772387 Alberta Limited Partnership (“Encor”) filed an application for uncollected bill amounts for gas services provided to enrolled gas customers (transmission-related charges).
Natural Gas Rate Rider – Applied-for Amounts by the Applicant
With respect to the outstanding amount owed to the Minister, the AUC approved amounts no greater than the applied-for $4,639,223.19 to be included in the natural gas rate rider.
For the gas distributors ATCO and Apex, the AUC approved the inclusion of the carrying costs calculated using the WACC method. For ATCO Gas, the AUC approved the $407,785.73 in uncollected bill amounts for gas transmission charges and the inclusion of $112,798.91 for carrying costs as part of the natural gas rate rider. For Apex, the AUC approved the $263,536.02 in uncollected bill amounts for gas services and gas transmission charges and the inclusion of $105,668.64 for carrying costs as part of the natural gas rate rider.
Self-Funded Gas Service Providers
Encor applied for the recovery of $142,041.00. Its application included a cover letter, senior officer’s attestation letter, and the UPDP self-funded service provider rate rider template. In a ruling from July 30, 2021, the AUC denied an application from Encor for recovery of $97,826.00 for late payment revenue shortfall and $9,168.00 for carrying costs. These amounts were excluded from recovery through the natural gas rate rider. The remaining costs claimed for deferred transmission charges of $35,047.00 were found to accurately reflect the difference between the deferred natural gas bill amounts of enrolled gas customers and the uncollected bill amounts and, accordingly, were approved for inclusion in the natural gas rate rider.
Just Energy applied for $406,950.08, and Hudson Energy applied for $128,593.01 in uncollected bill amounts. The AUC was satisfied that these amounts accurately reflected the difference between the deferred natural gas bill amounts of enrolled gas customers and the uncollected bill amounts. Further, the AUC found that reasonable efforts were made to collect the deferred natural gas bill amounts from enrolled gas customers during the repayment period. The AUC approved amounts no greater than those applied for by Just Energy and Hudson Energy to be included in the natural gas rate rider.
Accordingly, pursuant to Section 10 of the UPDP Act, the AUC approved the amount no greater than $6,099,602.58 to be used in the calculation of the natural gas rate rider. Following the information provided by ATCO and Apex regarding their actual weather normalized throughput (by month in GJ), the AUC arrived at a rate rider of $0.037/GJ. The effective date of the rate rider will be November 1, 2021.