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EPCOR Distribution & Transmission Inc. Phase 2 Distribution Tariff Application, AUC Decision 27018-D01-2022

Link to Decision Summarized

Electricity – Rates

Application

EPCOR Distribution & Transmission Inc. (“EDTI”) filed a Phase 2 distribution tariff application specifically regarding the cost-of-service study (“COSS”), rate design, terms and conditions for distribution access service and distribution connection services, and distribution tariff policies.

Decision

Subject to specific modifications, the AUC approved EDTI’s application.

Applicable Legislation

AUC Decision 2011-375 – EPCOR Distribution & Transmission Inc. re 2010-2011 Phase II Distribution Tariff

AUC Decision 2012-155 – EPCOR Distribution & Transmission Inc. re Customer Specific Distribution Access Service Rate for New Customer

AUC Decision 27187-D01-2022 – EPCOR Distribution & Transmission Inc. re 2022 Customer Specific Distribution Access Service Rate for New Customer SC48

Uniform System of Accounts – s. 364 – Poles, Towers, and Fixtures.

Uniform System of Accounts – s. 365 – Overhead Conductors and Devices.

Uniform System of Accounts – s. 367 – Underground Conductors and Devices.

Pertinent Issues

The changed methodology of the COSS resulted in revenue requirement allocation changes for many of EDTI’s rate classes. The most material changes in the revenue requirement allocation were to the Residential class (from 47.3 percent to 54.9 percent), Medium Commercial class (from 8.9 percent to 11.1 percent), and Time-of-Use class (from 22.3 percent to 17.8 percent).

The AUC noted that EDTI has the highest approved residential fixed rate component among the regulated utilities, exceeding the next rate by seven percent. In response to an information request, the Office of the Utilities Consumer Advocate stated that it is not imperative for all utilities to have identical fixed and variable cost recovery components, as each utility has different cost structures.

While approving the rate design, the AUC directed EDTI to consider discontinuing customer-specific (“CS”) rates when considering alternatives to rate design for its third performance-based regulation (“PBR”) term. The AUC noted that other utilities have found ways to arrive at a more generic rate structure for their larger customers rather than providing them each with their own rate, which facilitates the administration of the rates. The AUC directed EDTI to report on whether it can move existing and future large customers who would be CS rate class candidates to a new rate class or existing rate classes as part of its proposal to address CS rates for its third PBR term. The AUC issued this direction to reduce the regulatory burden and achieve greater consistency with distribution services provided in other areas.

EDTI filed a report from Black & Veatch Canada Company proposing an update to EDTI’s billing determinant forecast methodology to address the shortcomings of the current methodologies. The updated methodology employs a regression model and updates the input variables used by EDTI to more closely track the various factors or events that could impact usage forecast and customer site counts. The AUC approved the updated forecasting methodology.

EDTI requested approval of revisions to the distribution connection services terms and conditions. EDTI made the amendments to improve the clarity of the terms and conditions and to address current industry practices, such as the growing adoption of distribution-connected generators and energy storage. The AUC approved these amendments.

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