Rates – Default Gas Tariff – Regulated Electricity Rate Tariff
In this decision, the AUC considered Direct Energy Regulated Services’ (“DERS”) compliance filing application, pursuant to the AUC’s order in Decision 22004-D01-2018 (the “Original Decision”).
The AUC found that DERS complied with the applicable directions from the Original Decision. The AUC approved the default rate tariff (“DRT”) and the regulated rate tariff (“RRT”) revenue requirements for 2017 and 2018, as filed.
The AUC did not approve any of the DRT or RRT interim rate true-up amounts also requested by DERS as part of its compliance filing. The AUC directed DERS to file a separate application to finalize its DRT and RRT interim rate true-up amounts after it completed billing on interim rates up to September 30, 2018.
Compliance with Directions from the Original Decision
The AUC found that:
(a) DERS complied with the AUC directions to use the actual cost data for 2017 and January to April 2018, and develop updated forecasts for the remainder of 2018; and
(b) DERS complied with the AUC directions regarding various other costs including: amortization expenses, customer costs, administrative costs, corporate service costs, and DRT reasonable return schedule updates.
True-Up of Interim Rates
The AUC did not accept the interim rate true-up proposed by DERS because of a flaw in DERS’ methodology, summarized below. The AUC also noted its preference was for DERS to include all the true-ups in a single application.
The AUC found that DERS’ proposed methodology for calculating the interim rate true-up figures did not reflect the risks for the entire time period because it included a mixture of actual and forecast information. The AUC noted that to properly account for the volume and site count risk, true-up amount calculations need to consist entirely of actual gas volumes and site counts for the period for which the true-ups were being calculated. The AUC, therefore, directed DERS to file a separate application for the true-up of each of the DRT and RRT services from January 1, 2017, to September 30, 2018, after it completed billing on interim rates for September 30, 2018 (the “Interim Rates Period”).
For the DRT return margin and energy related “other” costs, the AUC found that DERS was at risk for the revenue associated with the difference in actual gas volumes and DERS’ forecasted volumes for the Interim Rates Period.
With respect to the DRT and the RRT non-energy services rates, the AUC similarly considered DERS at risk for the revenue associated with the variance from forecasted site counts during the Interim Rates Period. If the actual number of sites was greater than the forecasted number, this resulted in more non-energy revenue, thus benefiting DERS. Conversely, if the actual number of sites for the Interim Rates Period was less than the forecasted number, resulting in less revenue, this would be to DERS’ detriment.
Revenue Requirements and Final Rates for 2017 and 2018
The AUC approved the DRT and RRT revenue requirements for 2017 and 2018. The approved revenue requirements are shown in the following tables:
Table: AUC Approved DRT Revenue Requirements for 2017 and 2018
Table: AUC Approved RRT Revenue Requirements for 2017 and 2018
The AUC approved the final DRT and RRT non-energy rates for 2017 and 2018.
The AUC approved the final DRT return margin charges for 2017 and 2018 (shown in the following table).
Table: Final DRT Return Margin Charges
The AUC directed DERS to reflect the approved DRT return margin charge for 2017 in the remaining monthly gas cost flow-through rate filings, beginning with the October 2018 filing.
The AUC approved the DRT energy-related “other” charges for 2017 and 2018 from the updated DRT revenue requirement schedule. The AUC ordered DERS to reflect the 2018 AUC approved rate of $0.010 per GJ for DRT energy-related “other” costs in its remaining 2018 monthly gas cost flow-through rate filings, beginning with the October 2018 filing.
Summary
The AUC approved the DRT rate schedules and the RRT schedules for DERS on a final basis. The AUC approved the DRT return margin charges and the DRT energy costs on a final basis. These approvals were effective October 1, 2018.
The AUC ordered DERS to file an application including its true-up figures for the period of January 1, 2017, to September 20, 2018.
