Rates – Negotiated Settlement
ENMAX Energy Corporation (“EEC”) applied for approval of a Negotiated Settlement Agreement (“NSA”) concerning its 2022-2024 non-energy regulated rate option tariff application.
The AUC found that the NSA reached between EEC and interveners including the Utilities Consumer Advocate and the Consumers’ Coalition of Alberta was negotiated under a fair process, is in the public interest, and would result in just and reasonable rates. The AUC approved the NSA as filed.
Electric Utilities Act, SA 2003, c E-5.1.
Regulated Rate Option Regulation, Alta Reg 262/2005.
AUC Rule 018: Rules on Negotiated Settlements
The AUC has previously considered negotiated settlements in rate cases including where, as here, there was unanimous agreement.
Because no interested party to the NSA represents all stakeholders, the AUC noted the negotiated settlement process (“NSP”) and NSA do not replace a full and informed review by the AUC as to what is in the overall public interest. Because EEC agreed to an NSP, negotiated with parties representing ratepayers, executed the NSA, and applied to the AUC for approval of the NSA, the AUC considered that the NSA satisfied EEC’s interests. The AUC consequently assessed the NSA only from the perspective of ratepayers.
The agreed-to NSA would lead to reductions to EEC’s applied-for revenue requirement in communications, billing and customer care, salary escalators, non-salary escalators, and internet technology cost allocation adjustment cost categories. Despite these reductions, the AUC noted that the negotiated administration charge would increase in 2023 and 2024 relative to the originally applied-for rates. The AUC understood that this is a consequence of a decrease in site counts, as compared to what was initially forecast by EEC in the original applied-for rates.
The AUC approved the increase. It accepted EEC’s explanation that the increase results from the practice of updating forecasts to use the most recent site-count actuals available. This was determined to be consistent with the AUC’s practice in previous proceedings and reflects an interest in relying on the best available information when setting rates.