Markets – Enforcements
Application
TCB Welding & Construction Ltd. (“TCB”), a customer of ATCO Gas and Pipelines Ltd. (“AGP”), filed a complaint with AUC Enforcement staff (“Enforcement Staff”) concerning a delay in accessing a high-use delivery service rate. TCB alleged that it was overcharged by AGP between December 2020 and November 2021 due to AGP’s delay in switching TCB’s rate from the mid-use delivery service rate to the high-use delivery service rate.
Decision
The AUC approved the settlement agreement between the Enforcement Staff and AGP related to the delay in switching ten customers from mid- or low-use delivery service rates to the high-use delivery service rate.
AGP will pay a one-time administrative penalty of $14,500 to the AUC and $93,712 to TCB.
Applicable Legislation
Alberta Utilities Commission Act, SA 2007, c A-37.2.
AUC Rule 013: Criteria Relating to the Imposition of Administrative Penalties.
Pertinent Issues
TCB’s natural gas consumption increased significantly from January 2021 (302.84 gigajoule (“GJ”)) to February 2021 (1,759.56 GJ). AGP completed a meter resize for TCB on February 24, 2021, to accommodate the increased demand. Contrary to its operational practice, AGP did not complete a consumption review at this time to determine whether the increase was sustainable.
Enforcement Staff initiated an investigation, which resulted in a settlement agreement and this application. The settlement agreement describes AGP as failing to:
(a) make TCB aware of the various rate schedules under which AGP provides service to different customer rate classes;
(b) endeavour to apply the applicable rate schedule which is most favourable to TCB in a timely fashion; and
(c) refund the difference in charges under a different rate schedule for a past period when TCB had requested service under an alternative rate schedule that was available to it.
In the settlement agreement, AGP admitted to the contraventions and agreed to the imposition of an administrative penalty of $14,500. AGP also agreed to pay TCB the rate differential for the ten months in question and refund nine additional customers who were subsequently switched to the high-use rate.
The AUC determined that the magnitude of the proposed administrative penalty is proportional to the seriousness of the contravention. In addition, considering that the purpose of the AUC’s sanctioning authority is protective and preventative, not punitive, the AUC found that the quantum of the penalty is reasonable.
The AUC concluded that it is in the public interest to approve the settlement agreement, including the set administrative penalties. The AUC also concluded that the process improvements, as outlined in the settlement agreement, will serve to mitigate the risk of a similar contravention occurring again and should be implemented by AGP.
