Amalgamation – Non-Regulated Entities
In this decision, the AUC approved the application from Canadian Utilities limited (“CU”) for the amalgamation of ATCO Energy Solutions Ltd. (“AES”) and ATCO Alberta Storage Hub Ltd. (“ATCO Hub”) (the “Amalgamation”). The application was approved under Section 101(2)(d)(ii) of the Public Utilities Act (“PUA”) and Section 26(2)(d)(ii) of the Gas Utilities Act (“GUA”) because the AUC’s no-harm test was satisfied.
Should the AUC Approve the Amalgamation of ATCO Energy Solutions Ltd. and ATCO Alberta Storage Hub Ltd. Into AES Amalco?
CU stated that AES and ATCO Hub will amalgamate into and continue as the corporation, ATCO Energy Solutions Ltd. (“AES Amalco”). AES is an unregulated, wholly owned subsidiary of CU. CU indicated that the amalgamation will not adversely affect any member of the public who is receiving service from the regulated ATCO utilities. The amalgamation would not result in any impact to utility service, would not increase the utility rates, impact gas or public utility service, or the regulatory oversight of CU.
The proposed amalgamation is a merger or consolidation of property outside the ordinary course of business and accordingly requires the consent of the AUC pursuant to Section 101(2)(d) of the PUA and Section 26(2)(d) of the GUA. The central question determining AUC approval is whether customers are harmed by the amalgamation. To assess this, the AUC applied its three-part no-harm test.
The amalgamation concerns two existing non-regulated entities. As a result, the AUC found that the amalgamation is not expected to impact customers negatively, and therefore, customers will be no worse off after the amalgamation is completed. The AUC also found that the amalgamation does not have potentially harmful operational effects on customers that may impair the integrity and reliability of the systems operated by the regulated ATCO utilities. The approval of CU’s application for the amalgamation will therefore not result in any financial harm to customers.
The AUC determined that the requirements of the no-harm test were satisfied and approved the amalgamation as filed.