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Direct Energy Regulated Services DRT and RRT Application for Interim Rates True-Up and 2021 Bad Debt and Late Payment Charge Deferral Account Disposition, AUC Decision 27273-D01-2022

Link to Decision Summarized

Rates – Energy

In this decision, the AUC approved the application from Direct Energy Regulated Services (“DERS”) to true-up its interim rates for the default rate tariff (“DRT”) and the regulated rate tariff (“RRT”) and to dispose of the balance in the 2021 bad debt and late payment charge deferral account.

The AUC determined the true-up amounts provided in this decision and amounts to be included in the monthly gas cost flow-through rate (“GCFR”), effective June 1, 2022, until November 30, 2022.

Interim Rates True-up Amounts

DERS requested approval of the rate true-up regarding five rates and charges. For this true-up of interim rates, DERS calculated the difference between the revenues it would have had if final rates had been in place for the interim rate period and the actual revenues for the same period using the approved interim rates in place. The AUC was satisfied that DERS calculated the true-up amounts correctly and approved the following amounts to be collected from customers from January 1, 2020, to June 30, 2021.

2021 Bad Debt and Late Payment Charge Deferral Account Balances

DERS’ 2020-2022 DRT and RRT revenue requirements and rates were determined through negotiations with customer groups. The negotiated settlement agreement (“NSA”) was approved by the AUC in Decision 26207-D01-2021.

The NSA included provisions regarding the bad debt and late payment charge components of the revenue requirement for 2020-2022. The net balance in the DRT bad debt and late payment charge deferral account must be separated between the energy balance and the non-energy balance, and the non-energy balance is then separated between the three rate classes. DERS calculated the energy and non-energy balances using the energy and non-energy forecast allocation percentages from the NSA. The non-energy balance for each rate class was also calculated using the forecast number of bills allocation percentages from the NSA. The AUC requested DERS to recalculate the energy and non-energy balances and the non-energy balances by rate class using actual information as opposed to the forecasts. The AUC approved the energy and non-energy balances by rate class of the 2021 DRT net bad debt and late payment charge deferral account balance as recalculated.

The net balance in the RRT bad debt and late payment charge deferral account must be separated between the seven rate classes. In the application, DERS calculated the balance for each rate class using the forecast number of bills allocation percentages from the NSA. The AUC requested DERS to recalculate the balances by rate class using the NSA methodology and actual information. The AUC approved the balances by rate class of the 2021 RRT net bad debt and late payment charge deferral account balance.

Proposal to Collect or Refund as Applicable the Combined Interim Rates True-up Amounts and Net Bad Debt and Late Payment Charge Deferral Account Balances

DERS proposed to collect the RRT and DRT non-energy totals from customers through the addition of a rate rider over the period from June 1, 2022, to November 30, 2022. DERS also proposed to collect the DRT energy total before labour costs related to the procurement during the same period as part of the GCFR.

The AUC approved the proposal to combine the interim rates true-up amounts and the net bad debt and late payment charge deferral account balances. The AUC also approved DERS’ proposal to collect or refund, as applicable, the combined balances over a six-month time period because it results in average monthly bill increases of less than 2 percent for residential DRT and RRT customers.

Proposal to File an Application to Provide Actual Rider Revenue and Forecast Rider Revenue

DERS noted that it calculated the rate riders approved in this application using a six-month forecast for site counts. The amounts collected or refunded through the rate riders will likely differ from the combined balances. DERS proposed to submit an application by no later than January 31, 2023, that would include the actual amounts collected or refunded, the approved combined balances, and the resulting differences.

The AUC approved the application and directed DERS to file an application, including the actual RRT and DRT non-energy rider revenues and refunds by rate class, the corresponding approved non-energy combined balances, the resulting differences, and, if needed, a true-up proposal, by no later than January 31, 2023.

Order

The AUC approved DERS’ DRT for non-energy true-up riders. The AUC also approved the monthly amounts totaling $1,767,762 for DRT energy and non-energy costs and RRT non-energy to be included in the respective monthly GCFR filings for June 2022 to November 2022.

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