Capital Tracker – Rates – True-Up
AltaGas Utilities Inc. (“AltaGas”) filed its compliance filing with the AUC pursuant to directions issued in Decision 20522-D02-2016.
Direction 1 and 3
The AUC directed AltaGas to calculate and include the revenue requirement for four projects in its Pipeline Replacement program in 2013, on a mid-year basis, in its performance based regulation (“PBR”) rate adjustments for its K Factor amounts. The AUC also directed AltaGas to calculate and include the revenue requirement for two projects in its Station Refurbishment program in 2013, on a mid-year basis.
AltaGas submitted that the revenue requirement adjustment for the four Pipeline Replacement projects resulted in a $9,845 refund to customers. AltaGas submitted that the revenue requirement adjustment for the two Station Refurbishment projects resulted in a $1,372 refund to customers.
The AUC held that AltaGas had complied with Directions 1 and 3.
Directions 2 and 5
The AUC directed AltaGas to provide project-level trailing cost explanations for certain 2012 and 2013 projects in the Pipeline Replacement program. The AUC also directed AltaGas to provide project-level variance explanations for its Gas Supply program for two projects’ trailing costs.
AltaGas submitted that it provided trailing cost explanations for each project, as directed by the AUC.
The AUC held that AltaGas had complied with Directions 2 and 5.
Direction 4
The AUC directed AltaGas to correct a coding error that was discovered by AltaGas during proceeding 20522, which had misallocated $20,290 of trailing costs for 2012 to the incorrect project in its initial application.
AltaGas submitted that it had corrected the coding error, and that the impact on rates in 2014 and its 2016-2017 forecast were negligible, at less than $600.
The AUC held that AltaGas complied with Direction 4, and found that the impact on rates from 2014 onward (although it recognized that 2015 rates were out of scope for this proceeding) were reasonable. Accordingly, the AUC approved the amended amounts, and noted that AltaGas would include the adjusted rate impact for 2015 in its upcoming 2015 capital tracker true-up application.
Directions 6, 8, and 12
The AUC directed AltaGas to use the approved 2016 I-X index and forecast billing determinants as approved in Decision 20823-D01-2015. The AUC directed AltaGas to update its accounting tests for capital tracker treatment based on final forecast or actual capital additions approved in Decision 20522-D02-2016.
The AUC also directed AltaGas to update the 2016 and 2017 forecast amounts of $5,854,585 and 8,483,831, respectively, in its compliance filing to give effect to:
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The 2016 I-X index and the Q factor figures approved in Decision 20823-D01-2015; and
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The revised gas supply placeholder as calculated in Decision 20522-D02-2016.
AltaGas submitted that the 2016 K Factor adjustment, taking into account the above directions, was reduced from $5,854,585 to $5,796,653. AltaGas submitted that the 2017 K Factor adjustment, taking into account the above directions, was reduced from $8,483,831 to $8,297,204,
The AUC held that AltaGas correctly applied the approved 2016 I-X index and forecast billing determinants in compliance with Direction 6. The AUC also held that AltaGas correctly applied and updated the accounting tests in accordance with Direction 8.
Directions 9 and 10
The AUC directed AltaGas to re-calculate its materiality threshold tests for capital tracker treatment to reflect the changes to the accounting test in Directions 6, 8 and 12. The AUC also directed AltaGas to re-assess whether its projects proposed for capital tracker treatment meet the thresholds for capital tracker treatment using the re-calculated materiality thresholds.
AltaGas submitted that the materiality test thresholds for 2016 were updated as follows:
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A four basis point threshold of $32,580;
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A forty basis point threshold of $325,802.
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AltaGas submitted that the materiality test thresholds for 2017 were updated as follows:
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A four basis point threshold of $32,873;
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A forty basis point threshold of $328,734.
AltaGas submitted that each of its programs and projects proposed for capital treatment exceed the revised materiality figures.
The AUC held that AltaGas had correctly updated its materiality threshold tests, and that each of its proposed programs and projects exceeded the threshold for capital tracker treatment. Accordingly, the AUC held that AltaGas had complied with Directions 9 and 10.
Direction 14
The AUC directed AltaGas to file with the AUC evidence of its reconciliation of capital cost allowance amounts filed with the Canada Revenue Agency.
The AUC held that AltaGas had complied with Direction 14.
Order
The AUC accordingly ordered that AltaGas’ 2013, 2014, 2016 and 2017 K Factor adjustments applied for were approved.
The AUC noted that AltaGas would address the remaining directions in future PBR rate applications.
