Alberta Utilities Commission approves AltaGas’ Review and Variance application of Decision 22750: The Generic Cost of Capital in Decision 23947.
On August 2, 2018, the Commission issued Decision
22570 regarding AltaGas Utilities Inc.’s approved return on equity and
deemed equity ratio for all affected utilities for the test years of 2018 –
2020.[1] In
the decision the Commission ruled AltaGas’ deemed equity ratio to be reduced
from 41 % to 39 % to recognize AltaGas’ inability to obtain lower cost debt
that is typically associated with A-level credit ratings. Historically, AltaGas
has been granted a higher equity ratio because it was higher risk than other
utilities. However, in order to ensure greater symmetry between the actual credit
rating associated with AltaGas’ debt (a rating of BBB at the time) and its
equity thickness, the Commission ruled that reducing equity thickness was
warranted.
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