Review and Variance – Opening Rate Base
In this decision, the AUC approved an application from AltaLink Management Ltd. (“AML”) for review and variance of Decision 26509-D01-2022 (Corrigenda) (the ”Decision”) in part. The AUC allowed a review of s. 10.10 of the Decision, which addresses AML’s proposed capital expenditures for its pipeline electrical interference mitigation program as part of AML’s 2022-2023 general tariff application (“GTA”) and direct assigned capital deferral account (“DACDA”) reconciliation application. The AUC refused to review s. 9.5 of the Decision, which addressed reductions to AML’s opening rate base connected with its wildfire mitigation plan.
Discussion
In its GTA, AltaLink applied for AUC approval of its applied-for revenue requirement for the 2022-2023 test period, among other things. In the Decision, the AUC denied portions of AML’s applied-for revenue requirement. The portions denied include amounts related to AML’s 2022 opening rate base connected with its wildfire mitigation plan and proposed capital expenditures for its pipeline electrical interference mitigation program.
In the Decision, the AUC approved capital additions in the amount of $1.505 million, as opposed to the applied-for amount of $3.052 million for AML’s wildfire mitigation plan. The AUC denied all proposed capital expenditures connected with AML’s pipeline electrical interference mitigation plan.
The Review Application
The review process has two stages. In the first stage, a review panel decides if there are grounds to review the original decision (the preliminary question). If the review panel decides to review the Decision, it moves to the second stage, where it decides whether to confirm, vary, or rescind the original decision (the variance question).
In this decision, the AUC considered the preliminary question.
Pipeline Electrical Interference Mitigation Issues
The AUC exercised the discretion to review the Pipeline Electrical Interference Mitigation Issue on its own motion pursuant to s. 2 of Rule 016: Review of Commission Decisions (“Rule 016”).
In the Decision, AML was denied all applied-for funds to carry out the work under the pipeline electrical interference mitigation program. However, AML is required to undertake this work to comply with applicable laws and standards. Given the requirement of AML to undertake this work, the review panel found that further inquiry into the Pipeline Electrical Mitigation Interference Issue is warranted.
Because the AUC determined a need to review this section of the Decision on its own motion, it found it unnecessary to review AML’s proposed grounds for review in this regard.
Wildfire Opening Rate Base Issue
AML requested a review of s. 9.5 of the Decision under s. 5(1)(a) of Rule 016 on the basis that the AUC made an error of fact or mixed fact and law where the legal principle is not readily extricable, which is material to the decision and exists on a balance of probabilities, with respect to the Wildfire Opening Rate Base Issue. AML argued that the AUC erred when it found that the scope of work approved by the AUC in relation to AML’s targeted right-of-way improvements in high-risk fire areas and wildfire tree removals had changed from the scope of work that was approved on a forecast basis in Decision 23848-D01-2020.
AML also submitted that the AUC narrowly and inflexibly construed the approved scope of the transmission line rights-of-way upgrade in high-risk fire areas program by not allowing any of AML’s actual capital expenditures to depart from the forecast.
In this review decision, the AUC determined that the asserted errors are not material to the outcome of the Decision and would not lead the review panel to vary or rescind the Decision regarding the GTA.
When assessing the GTA, the AUC performed a prudence assessment of the applied-for actual capital additions for the sub-projects within the transmission line rights-of-way upgrades in the high-risk fire areas program. In that review, the AUC found that AML had redefined and restated its work units and that the cost per unit had more than doubled from what the AUC had approved on a forecast basis in AML’s previous GTA. The AUC was not satisfied with AML’s justification for the increased actual costs of the sub-projects at issue. The review panel found no basis to question the hearing panel’s findings.
The AUC found that the requirements to grant a review of this section were not met.
Decision
The AUC decided to review s. 10.10 of 26509-D01-2022 (Corrigenda) regarding capital expenditures for AML’s pipeline electrical interference mitigation program. The application to review the findings regarding the opening rate base with respect to the wildfire mitigation plan was denied.
