Interim Rates – TFO Tariff
In this decision, the AUC approved a 2022 interim transmission facility owner (“TFO”) tariff for AltaLink Management Ltd. (“AML”) of $56,736,664 effective January 1, 2022 on an interim refundable basis.
Background and Application
In Proceeding 26509, AML’s 2022-2023 transmission general tariff application (“GTA”), AML requested approval of a forecast 2022 revenue requirement of $811,456,637 for 2022 or a net 2022 monthly transmission tariff of $67,621,386. AML added that the requested interim monthly tariff amount of $67,621,386 for 2022 represents a reduction of $3,065,310 or 4.3 percent of the final approved 2021 tariff amount approved in Decision 25870-D01-2020, before the AUC approved an additional refund of accumulated depreciation in Decision 26248-D01-2021. In this application, AML requested approval of interim rates as it did not have an order permitting the continuation of its tariff in 2022.
In evaluating interim rate applications, the AUC applies its two-part test. This test first evaluates the quantum and need factors, and in the second step considers the public interest in the approval of the interim rates.
The approval of AML’s requested interim rates satisfied the quantum and need factors addressed in the first step of the test. Subject to findings of Proceeding 26509 regarding AML’s 2022-2023 GTA, the projected monthly revenue deficiency of $21,769,444 for 2022 is material and probable. The AUC however noted that several contentious issues still needed to be addressed through Proceeding 26509. AML’s request to recover 100 percent of its 2022 revenue shortfall is unreasonable as it would include revenue amounts associated with those contentious items. The AUC therefore approved the collection of 50 percent of the identified shortfall. This amount would preserve AML’s financial integrity by avoiding a material revenue shortfall between the existing 2021 monthly tariff and the forecast 2022 monthly revenue requirement.
The AUC determined that the interim adjustment will promote rate stability and ease rate shock and help maintain intergenerational equity and provide appropriate price signals. As a result, the AUC found that public interest factors considered in the second step of its test were also satisfied.
The AUC approved AML’s 2022 interim monthly TFO tariff in the amount of $56,736,664 effective January 1, 2022, on an interim basis. The AUC further ordered that the existing terms and conditions of AML’s TFO tariff will remain in effect until a further order or decision from the AUC is issued.
As the rate increase is requested on an interim basis, it will be trued up when AML’s final 2022-2023 transmission revenue requirements are approved.