Maximum Investment Levels – Cost-of-Service Year
The AUC considered the 2023 Maximum Investment Levels (“MILs”) for the distribution facility owners (“DFOs”) ENMAX Power Corporation (“EPC”), FortisAlberta Inc. (“FortisAB”), EPCOR Distribution & Transmission Inc. (“EDTI”) and ATCO Electric Ltd. (“AE”).
The AUC established this proceeding in two phases: (i) the AUC would set 2023 MILs, and (ii) the AUC would hold a more extensive proceeding re-examining the principles underlying MILs for subsequent years. This decision dealt with the first phase.
The AUC set the 2023 MILs on a final basis and determined that the value of 2023 MILs for each DFO will be set based on an escalation of 2022 approved MILs by the inflation escalator of 2.68 percent.
Electric Utilities Act, SA 2003, c E-5.1 – ss 1, 5, 101, 102, 105 and 120.
A MIL is a maximum amount a DFO can contribute toward the cost of connecting a new customer to its system. Any remaining connection costs fall to the individual customer as a customer contribution. MILs are set amounts approved as part of each DFO’s terms and conditions of service.
The AUC granted developers full participatory rights in this proceeding but found that they are not “customers” under Electric Utilities Act (“EUA”). The text of the definition of “customer” strongly supports the conclusion that the term “customer” only contemplates end-use customers who consume electric energy. Even though individual developers are responsible for the construction of electric utility infrastructure inside the new residential developments within their service areas, after construction is complete, the developer passes ownership of this infrastructure back to the DFO.
The AUC set the DFOs’ 2023 MILs by escalating its 2022 approved MILs by the inflation escalator consistent with the approvals in the Cost-of-Service (“COS”) rebasing applications. The AUC set the 2023 MILs on a final basis to avoid an administrative burden and uncertainty, as parties would not know how costs would be allocated under interim MILs when they initiated a project.
The AUC set all DFOs COS inflation escalators at 2.68 percent as approved in Decision 26615-D01-2022 for FortisAB. The AUC determined that this was reasonable because all DFOs considered in this proceeding face similar inflationary pressures and have similar salary escalations for 2023.