Electricity – Rates
In this decision, the AUC approved the update made by EPCOR Distribution & Transmission Inc. (“EPCOR”) to its customer specific (“CS”) distribution access service (“DAS”) rate for an existing customer (“CS40”) of $163.82 per day, effective September 1, 2021.
Background
The CS rate class includes customers with energy demands over 5000 kilowatts. In October 2020, the CS40 customer requested a buy-down of its contracted minimum demand of 6.56 megavolt ampere (“MVA”) to a revised contracted minimum demand of 5.0 MVA. EPCOR executed the requested change according to its distribution connection services terms and conditions.
Calculation of the 2021 CS40 Rate
EPCOR noted that cost-of-service calculation of CS rates generally includes three components: incremental equipment and installation activities; cost of existing assets to provide service; and allocated operating, maintenance and general (“OM&G”) costs. To determine the capital cost component of the assets in service in the customer’s rates, EPCOR used the previously approved direct calculation method.
Regarding equipment and installation activities, EPCOR confirmed that assets used to provide the standby service are included in the rate for the site, and no incremental assets were required to provide service to the customer. Regarding OM&G costs, EPCOR submitted that it allocated OM&G costs associated with the incremental and existing assets using a ratio of 1.851 per dollar of capital costs. EPCOR calculated the ratio between total OM&G costs and capital costs based on the amounts from its last Phase II application.
The AUC reviewed EPCOR’s submissions and calculations and approved the proposed CS40 rate update. The CS40 rate of $163.82 per day will come into effect on September 1, 2021. The AUC emphasized that, in approving the requested rate update, it did not authorize the recovery of any amount payable by the customer from other EPCOR customers in the event of default or bankruptcy of CS40.
EPCOR is also required to true up any differences if the actual effective date for the revised CS40 rate differs from the approved date of September 1, 2021. The CS40 rate will further be trued up to reflect the 2021 actual cost of debt when it becomes available.
