Electricity – Rates
In the course of ENMAX Power Corporation (“ENMAX”)’s and EPCOR Distribution & Transmission Inc. (EDTI”)’s 2023 cost-of-service (“COS”) review applications, each utility requested and received the AUC’s permission to pursue a negotiated settlement process in respect of their applications. Two separate negotiation processes were conducted in May 2022. The first negotiation process occurred among ENMAX, the Office of the Utilities Consumer Advocate (“UCA”), and the Consumers’ Coalition of Alberta (“CCA”). ENMAX reached a settlement agreement with the UCA, to which the CCA refused to be a signatory. The second negotiation process was conducted among EDTI, the UCA, and the CCA. EDTI reached a settlement agreement with the UCA, to which the CCA also refused to be a signatory.
The AUC found that accepting the Settlement Agreements is in the public interest because the agreements will lead to just and reasonable rates and provide certainty, and would also result in savings in costs, resources, and time. The AUC approved the Settlement Agreements as filed.
AUC Rule 018: Rules on Negotiated Settlements
Electric Utilities Act, SA 2003, c E-5.1 – s. 132.
The CCA explained that it did not agree to the settlement between ENMAX and the UCA because it was concerned over the agreed increases and that the settlement was still a substantial increase to the applied-for revenue requirement over historical levels.
The CCA explained that it was not opposed to the settlement amount relative to the applied-for revenue requirement negotiated by EDTI and the UCA. However, it did not agree to the settlement agreement between EDTI and the UCA because of an outstanding issue with efficiency sharing with customers based in part on the EDTI reported return on equity. The CCA did not agree to the settlement agreement and requested an opportunity to address the issue of how EDTI’s 2018-2022 PBR plan efficiencies are shared with customers. The AUC allowed the parties to file written submissions and convened an oral proceeding to hear the parties.
The CCA opposed the ENMAX settlement. The CCA’s submissions focused on what it claimed was a significant increase in revenue requirement well over the historical trend lines, particularly during rebasing years. ENMAX provided information similar to that provided by the CCA. The information provided by ENMAX showed a significantly lower escalation of the revenue requirement, below or at historical trend levels. ENMAX pointed out that the CCA’s submissions and data did not adjust for inflation, or the large increase in site counts, from 2004 to 2023.
The AUC was not convinced by the CCA’s evidence regarding the Settlement Agreements. The AUC considered the evidence of the UCA to be more compelling and found that the UCA’s evidence provided a solid foundation for acceptance of the Settlement Agreements.