Rates – Deferral Account
ATCO Gas and Pipelines Ltd. (“ATCO”) applied for approval of the collection of ATCO Gas North and ATCO Gas South’s weather deferral account (“WDA”), also known as Rider W, balances as of April 30, 2016. ATCO submitted that the balance of the WDA would result in a collection of approximately $28.548 million for ATCO Gas North and $23.394 million for ATCO Gas South.
ATCO further requested that future WDA applications have rider periods ending on April 30 of each year.
The AUC explained that the purpose of the WDA was originally to allow ATCO to manage the revenue risk to the utility resulting from differences in actual temperatures compared to weather forecasts, and the impacts that would have on delivery revenues.
ATCO proposed to collect the WDA through Rider W for 10 months, effective July 1, 2016 to April 30, 2017. Given the magnitude of the collections, ATCO stressed that a collection date effective as soon as possible was required to allow collection on a timely basis, while the 10 month collection period was requested in order to avert any possible rate shock from the implementation of Rider W.
ATCO submitted that the Rider W amounts for South low-use customers was $0.269 per gigajoule (GJ), while it amounted to $0.252 per GJ for South medium-use customers. ATCO noted that on an annualized basis, the Rider W would amount to approximately $30 for an average low-use residential customer, and $693 for a medium-use customer. For North customers, ATCO submitted that the Rider W amounts for North low-use customers was $0.294 per GJ while it amounted to $0.280 per GJ for North medium-use customers. ATCO noted that on an annualized basis, the Rider W would amount to approximately $32 for an average low-use residential customer, and $770 for a medium-use customer.
In response to an AUC information request, ATCO submitted that the percentage impact on a typical customer bill would be at most 6.08 percent (for medium-use customers in the North). As a result, ATCO argued that the difference between a 12-month collection period and a 10-month collection period would be minimal. ATCO submitted that it preferred a 10-month collection period to ensure that there was no confusion over any potential overlap between annual Rider W amounts, and to avoid intergenerational equity concerns.
The AUC held that the methodology used by ATCO to calculate the WDA and Rider W were consistent with its previous approvals for past WDA and Rider W applications. The AUC also found that there would be minimal customer confusion, and that the 10-month collection period ending April 30, 2017 was reasonable. Accordingly, the AUC approved the WDA collection balances of $28.548 million for North customers, and $23.394 million for South customers by way of its Rider W, effective July 1, 2016 to April 30, 2017.
