Recovery Rider J – Rate Shock Mitigation
On February 15, 2017, EPCOR Distribution & Transmission Inc. (EPCOR) submitted an application (the “Application”) to the AUC requesting approval to collect, through a rate Rider J (referred to as the “Recovery Rider J”), the refunded amounts relating to a rate shock mitigation strategy previously approved in Decision 21979-D01-2016, which considered EPCOR’s 2017 annual rates under performance-based regulation (“PBR”) effective January 1, 2017.
Background: Rate Shock Mitigation & Rate Refund Rider J
On December 23, 2016, the AUC issued Decision 21979-D01-2016, approving EPCOR’s 2017 annual rates under performance-based regulation (PBR) effective January 1, 2017.
In that decision, the AUC noted there was a potential that some customers would experience rate shock when the 2017 rates went into effect. Accordingly, the AUC found that a rate mitigation strategy was warranted.
The AUC accepted EPCOR’s proposal to employ a refund through its Rider J to limit total bill impacts to 10 per cent or less for all rate classes (referred to as “Refund Rider J”). The AUC directed EPCOR to implement the Refund Rider J from January 1, 2017 to March 31, 2017.
To allow EPCOR to collect the same amount of distribution revenue in the 2017 calendar year as would have otherwise been collected had the refund not been implemented, the AUC allowed EPCOR the opportunity to request an additional rate change effective April 1, 2017.
To that effect, the AUC directed EPCOR to file an application by February 15, 2017, to reverse the refund in Rider J and collect the refunded amounts over the period of April 1, 2017 through December 31, 2017.
Recovery Rider J Application
In the Application, EPCOR explained that Rider J, effective from January 1, 2017 to March 31, 2017 (referred to as “Combined Rider J”), was composed of two separately approved rider components, namely the “Approved Rider J” and “Refund Rider J.”
The AUC found that the total effect of the Refund Rider J and the Recovery Rider J is that EPCOR would receive the same revenue amount as would have otherwise been collected had the Refund Rider J not been implemented. Accordingly, the AUC found that EPCOR’s calculations in support of the Recovery Rider J and the Combined Rider J to be reasonable.
Decision and Order
The AUC held that the Recovery Rider J, as applied for, was a fair means of collecting the previously refunded amounts over a reasonable time period.
Accordingly, the AUC approved the Recovery Rider J and the associated Combined Rider J, as filed.
