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ATCO Gas and Pipelines Ltd. Unaccounted-For Gas Rider D and Rider P, AUC Decision 28406-D01-2023

Link to Decision Summarized

GAS – Rates

Application

ATCO Gas (“AG”), a division of ATCO Gas and Pipelines Ltd., applied for approval of its 2023-2024 unaccounted-for gas (“UFG”) Rider D and Rider P, effective November 1, 2023. AG calculated Rider D to increase from the currently approved value of 1.271 percent to 1.418 percent, and Rider P to increase from 1.270 percent to 1.397 percent. In the proceeding, AG revised these values to be 1.346 for Rider D and 1.328 for Rider P.

Decision

The AUC approved the application from AG, for approval of the UFG rate Rider D and Rider P, as amended, effective November 1, 2023.

Decision

UFG Calculations and Rider D and Rider P Amounts

Both rate riders are similarly designed. Historically, Rider D was calculated annually using the most recent three-year average of AG’s annual UFG percentages, derived by dividing UFG by system deliveries. Rider P was similarly calculated using the most recent three-year average of annual UFG percentages but used system receipts as the denominator to calculate the annual UFG recovery requirement.

In the application, AG calculated Rider D and Rider P using the most recent three-year averages. The AUC observed that Apex Utilities Inc. calculated its UFG percentages using the most recent five-year historical average. As UFG amounts are driven by generally unpredictable causes, they are inherently variable. In response to an AUC information request (“IR”), AG agreed that a five-year average will provide a smoother and more stable representation of UFG over time. AG recalculated the initially applied-for rate rider percentages using the five-year averages arriving at rates of 1.346 for Rider D and 1.328 for Rider P.

The AUC asked AG to comment on the apparent recent upward trend in annual UFG percentages. The AUC determined that the increase in UFG was an unintended by-product of implementing a new geographical information system. While the cost of UFG is ultimately recovered from customers, the AUC determined that an increase in UFG in 2021 and 2022 is likely to be a temporary issue, which was not a cause of concern, at the time of this decision.

Compliance with Previous AUC Directions

The AUC was satisfied with the information provided by AG in response to directions issued in Decision 27583-D01-2022 regarding ATCO Gas’ 2022 UFG Rider D and Rider P. As directed, AG provided:

  • Explanations of seasonal UFG differences, measurement corrections and reasons for increases or decreases;
  • Information on practices and procedures it has employed to reduce UFG;
  • Details for all measurement adjustments showing the reconciliation of prior years’ data; and
  • Net results of the adjustments to UFG, both in terms of energy and as a percentage of receipts.

In Decision 27583-D01-2022, the AUC directed AG to discuss whether the monthly line heater usage and associated carbon levy table included in previous UFG Rider D and Rider P applications better belong in the load balancing deferral account rider (Rider L) application dealing with the recovery of the carbon levy amounts. AG explained that the gas usage of Line Heaters can now be measured and, as a result, it does not consider line heater usage as a source of UFG anymore. The AUC agreed with the recommendation by AG to report the carbon levy associated with line heater usage in future Rider L applications.

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