Rates – Transmission Costs
Application
ATCO Gas, a division of ATCO Gas and Pipelines Ltd. (“ATCO Gas”), requested approval of Rider T, which collects forecast transmission costs based on flow-through rates charged by NOVA Gas Transmission Ltd. (“NGTL”) and refunds or collects any differences between the prior year’s forecast and actual costs. ATCO Gas forecasts its transmission expense based on NGTL’s rates and charges applied to the contract demand quantity (“CDQ”).
The Alberta Utilities Commission (“AUC”) approved the current ATCO Gas Rider T rates on December 5, 2022, in Decision 27752-D01-2022. The Canada Energy Regulator (“CER”) approved NGTL’s final 2023 rates, tolls, and charges for the Alberta system on May 30, 2023, in Order TG-003-2023.
Decision
The AUC approved the 2024 transmission service charge (Rider T) rates for ATCO Gas, effective January 1, 2024. The Rider T rates are as follows:
- Alternative Technology and Appliance (“ATA”) delivery service customers: $1.258 per gigajoule (“GJ”);
- low-use customers: $1.258 per GJ;
- mid-use customers: $1.137 per GJ;
- high-use customers: $0.274 per day of GJ demand; and
- ultra-high-use customers: $0.303 per day of GJ demand.
Pertinent Issues
In its application, ATCO Gas used the previously AUC-approved methodology to calculate Rider T.
Cross-subsidization Between North and South Customers
In Decision 2014-062, the AUC approved the implementation of a province-wide Rider T, replacing the previous practice of maintaining separate Rider T rates for ATCO Gas’s North and South service territories. In subsequent decisions, the AUC considered cross-subsidization issues between ATCO Gas’s North and South service territories, requiring ATCO Gas to discuss what measures it took to minimize cross-subsidization between North and South customers.
In Decision 27752-D01-2022, the AUC directed ATCO Gas to provide a detailed analysis of factors that contributed to the level of cross-subsidization in the event a Rider T application showed the subsidy between residential customers exceeded the $4.16 annual amount approved in Decision 21248-D01-2016. In this application, ATCO Gas noted the subsidy between North and South residential customers does not exceed $4.16, explaining that under separate rates for North and South customers, a typical residential (low use) customer in the North using 105 GJ between January and December would see a $2.52 decrease in their annual bill, while a typical residential (low use) customer in the South would see a $2.63 increase in their annual bill.
The AUC agreed that the cross-subsidization amounts provided in the application were minimal and accepted the continued use of the province-wide Rider T rates.
Rider T Rates and Bill Impacts
ATCO Gas calculated the proposed Rider T rates by dividing the amounts allocated to each rate group by forecast billing determinants for January to December 2024, which matched those submitted for AUC approval in Proceeding 28569. ATCO Gas submitted that the applied-for 2024 Rider T rate changes were reasonable and would not result in undue rate shock compared to existing distribution rates. The AUC deemed it unlikely for the proposed Rider T rates to result in rate shock and was satisfied with the level of detail and accuracy of the calculations provided in the application.
