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AUC Determination of the Cost-of-Capital Parameters in 2024 and Beyond – Formula Base Values, AUC Decision 27084-D03-2023

Link to Decision Summarized

GAS- Rates

Application

In Decision 27084-D02-2023, the AUC determined the value of each of the base inputs to the formula, except the utility bond spread for the base period (“SPRDbase”). The AUC determined that it would use the average utility bond yield spread for February 2023 for SPRDbase. As the spread data from February 1 to February 28, 2023, was not available on the record, the AUC directed ATCO Utilities to perform the necessary calculations and provide the average utility bond yield spread in February 2023. In accordance with this direction, ATCO Utilities filed the calculations and resulting utility bond yield spread value of 1.58 per cent.

Decision

The AUC was satisfied by the calculations submitted by ATCO Utilities and confirmed on a final basis the following base values in the formula that will determine the return on equity in 2024 and subsequent years:

ROEt=9.0%+0.5x(YLDt-3.10%)+0.5x(SPRDt-1.58%)

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