Rates – Electricity
In this decision, the AUC approved the 2021-2022 regulated rate tariff (“RRT”) refiling application filed by EPCOR Energy Alberta GP Inc. (“EPCOR”). EPCOR requested approval of the refiled RRT non-energy revenue requirement, price schedules, authorization to collect or refund the variance between interim and final rates over a four-month period from August 1, 2022, to November 30, 2022, and approval of terms and conditions of service.
Background
In Decision 26694-D01-2022 (the “Decision”), the AUC approved a negotiated settlement agreement (”NSA”) reached between EPCOR, the Consumers’ Coalition of Alberta (“CCA”), and the Office of the Utilities Consumer Advocate (“UCA”) for EPCOR’s 2021-2022 non-energy RRT. EPCOR filed this refiling application in accordance with AUC directions issued in the Decision.
In the Decision, the AUC directed EPCOR to revise its COVID-19 deferral account to exclude specific COVID-19 amounts, reflect a credit of $130,000 to EPCOR’s customers, and exclude credit costs of $690,000 and $700,000 from its 2021 and 2022 revenue requirements, respectively.
EPCOR updated its 2021 and 2022 revenue requirements to reflect the changed NSA adjustment amounts. EPCOR reduced its RRT allocated revenue requirement by $3.82 million and $2.2 million for 2021 and 2022, respectively. EPCOR also amended the NSA to correct errors related to customer relationship management costs, bad debt, and late payment charges. The result was a reduction of the 2021 and 2022 revenue requirements by $70,000 and $370,000, respectively.
EPCOR’s correction of errors and omissions increased the 2021 revenue requirement by $572,000 and decreased the 2022 revenue requirement by $156,000.
Issues
Compliance with AUC Directions
The AUC was satisfied that EPCOR had adjusted its 2021 and 2022 revenue requirements regarding COVID-19-related deferral costs and forecast non-energy credit costs.
The AUC reviewed EPCOR’s 2018 and 2019 true-up calculations for non-energy rates and was satisfied that EPCOR properly applied the final Alberta Electric System Operator (“AESO”) settlement data to true-up the variance between interim and final rates. Although the AUC approved EPCOR’s calculations for truing up the variance between interim and final rates from January 1, 2018, until June 30, 2019, in Decision 24034-D01-2019, the calculations were based on a mix of actual and forecasted sites. EPCOR proposed to true-up the difference in revenue between interim and final rates in the full 2018 calendar year to reflect final AESO settlement data for that period, and the difference in revenue collected from interim to final rates from January 1, 2019, to June 30, 2019, to reflect the final AESO settlement. However, given the immateriality of the true-up amounts and the fact that they will have no measurable impact on customers or EPCOR, the AUC decided that it was unnecessary to recover EPCOR’s true-up of $1000 from customers for 2018 and $1000 from customers for the period January 1, 2019, to June 30, 2019. The AUC, therefore, denied the 2018 and 2019 true-up amounts.
Proposal for Interim and Final Rate True-up Adjustments
The AUC approved collecting true-up amounts through rate riders separated by customer group and service area. EPCOR’s proposed riders for residential customers will result in decreases to customers’ average monthly bills ranging from 0.09 to 0.79 percent. With the exception of increases for oil and gas customers in the FortisAlberta Inc. (“FortisAB”) service area, the AUC was satisfied that decreases in this range do not indicate rate shock.
EPCOR submitted that despite the 17.54 percent increase in rates for FortisAB oil and gas customers, the impact is reasonable because it had allocated bad debt costs by customer class; the shock had been mitigated by spreading it over four months, and the impact is localized to a single customer class with a relatively small amount of customers.
The AUC accepted the explanation that there was a significant bad debt write-off for the FortisAB oil and gas customer in 2021, which significantly increased the updated forecast bad debt for this class. The proposed interim and final rate true-up adjustments were approved as filed.
Revenue Requirements and Price Schedules and Terms and Conditions of Service
The AUC was satisfied that EPCOR’s revenue requirements and related price schedule were consistent with the terms of the NSA and the amended NSA provided in this refiling application. The price schedules for the FortisAB service area and the EPCOR Distribution & Transmission Inc. service area reflect the approved revenue requirement of $41.81 million and $38.76 million in 2021 and 2022, respectively.
The AUC approved proposed changes to EPCOR’s terms and conditions of service, including changes to definitions regarding Rule 003, as they were minor.
AUC Decision
The AUC approved EPCOR’s 2021 and 2022 revenue requirements, non-energy rates, and rate and price schedules as filed. The AUC also approved the terms and conditions of service.
