Alberta Utilities Commission

Residential Standards of Service and Maximum Investment Levels (MILs) Proceeding Issues List

In Proceeding 27658, the Alberta Utilities Commission (the Commission) finalizes the issues list for addressing standards of service and maximum investment levels for residential services. In September, the Commission put forward a preliminary list of issues for consideration. The Commission received comments on the preliminary issues from ATCO Electric Ltd. (ATCO), EPCOR Distribution & Transmission Inc., ENMAX Power Corporation, FortisAlberta Inc., the Alberta Federation of Rural Electrification Associations, the Office of the Utilities Consumer Advocate, and Melcor Developments Ltd. The Commission developed the following list based on these submissions.[1]

Issues List Summary[2]

  • The goal of setting MILs.
  • Whether MILs should be eliminated.
  • If MILs are not eliminated, determining the types of costs that should be eligible for MILs.
  • Deciding whether the prior MILs principles referenced in Decision 2010-309 are relevant and result in reasonable rates.
  • The scope of work that developers expect completed in exchange for MILs.
  • The electrical infrastructure the developer or homeowner is responsible for installing.
  • The average cost of providing electrical service to new greenfield residential developments.
  • The proportion of new connection costs to be recovered through MILs.
  • The developer and distribution facility owner (DFO) costs for consideration in MILs.
  • The timing of a utility investing in new residential services (i.e., once the infrastructure is in place, or when an end-use customer has bought a home and has enrolled with a utility service?).
  • The effect of performance-based regulation (PBR) on MILs.
  • Whether the developer or the municipality is responsible for street lighting.


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2024 GCOC Evidence

In proceeding 27084, intervenors submit their evidence regarding the issues list and other matters put forward by the Alberta Utilities Commission (the Commission) concerning the 2024 Generic Cost of Capital (GCOC). The Commission decided that the equity risk premium (ERP) approach for determining return on equity (ROE) is appropriate. The ERP approach is the basis for the one-factor formula previously approved by the Commission in 2009 and the two-factor formula adopted by the Ontario Energy Board (OEB). The Commission produced an issues list based on the two-factor approach, which the following formula expresses:

  • ROE (test year) = Notional ROE (VAR1 + VAR3) + Factor One + Factor Two
  • Factor One = VAR4 x (Forecast Long Canada Bond Yield (test year) (VAR2) – Base Forecast Long Canada Bond Yield (VAR1))
  • Factor Two = VAR7 x (Utility Bond Spread (test year) (VAR6) – Base Utility Bond Spread (VAR5))

The Commission’s questions in the issues list mainly ask intervenors to calculate and justify appropriate variables (VAR) for the above equation.



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Evidence on PBR3 Parameters

In proceeding 27388, intervenors submit evidence to the Alberta Utilities Commission (the Commission) in setting formula parameters for the third term of performance-based regulation (PBR3). The Commission asked intervenors to address seven specific issues:

  • Rate adjustment timing.
  • The type of PBR plan used to regulate electric and gas distribution facility owners (DFO).
  • The I Factor.
  • The X Factor.
  • Capital funding provisions.
  • Earnings sharing and efficiency carry-over mechanisms.
  • Efficiency tracking.

Intervenors each provided evidence that address at least one of these issues.



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TransAlta’s 2022-2023 General Tariff Transmission Application

In proceeding 27964, TransAlta Corporation requests approval of a $9.0 million revenue requirement for 2022 and $9.4 million for 2023, along with a one-time payment from the Alberta Electric System Operator (AESO) of $846,000 to reconcile approved interim rates. This revenue requirement includes TransAlta’s transmission facility owner rates applicable to the AESO’s use of TransAlta’s transmission facilities over the test period and TransAlta’s costs associated with the Operations and Maintenance Agreement between AltaLink Management Ltd. (AltaLink) and TransAlta.[1]



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ATCO Electric Transmission’s Negotiated Settlement Agreement for its 2023-2025 General Tariff Application

In proceeding 27062, ATCO Electric Transmission (ATCO) submit its 2023-2025 general tariff application to the Alberta Utilities Commission (the Commission) for approval. In August 2022, the Commission approved ATCO and the Interveners to enter a negotiated settlement process, and the parties engaged in settlement negotiations starting December 12. By December 20, all parties agreed in principle to a negotiated settlement. ATCO now requests that the Commission approve the settlement agreement and the resulting adjustments.[1]



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Enforcement Staff and City of Grande Prairie Settlement Agreement

The City of Grande Prairie constructed and began operating a 666-kilowatt power plant within the city between January and April 2021. Grande Prairie offered as a reason, and the Alberta Utilities Commission accepted, that Grande Prairie did not realize that the Hydro and Electric Energy Regulation and Rule 007 impose requirements on small power plants. Therefore, Grande Prairie did not file an application with the Commission for approval to construct and operate the power plant. The Commission Enforcement staff (Enforcement staff) began an investigation into the power plant after receiving two noise complaints. Grande Prairie and Enforcement staff subsequently engaged in discussions that produced a settlement agreement, which was then submitted to the Commission. In this decision, the Commission approves the settlement agreement.[1]

Background

Prompted by two noise complaints in December 2021, Enforcement staff started investigating the power plant to determine whether Grande Prairie complied with Rule 012: Noise Control. Enforcement staff determined that the power plant was operating without approval and in contravention of Rule 012. In January 2023, the Commission granted Grande Prairie approval to operate the power plant, subject to Grande Prairie: [2]



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Comparing the AUC and BCUC Hydrogen Inquiries

The British Columbia Utilities Commission (BCUC) recently initiated a hydrogen inquiry to examine the feasibility and potential market for producing and distributing hydrogen natural gas into its current natural gas framework. This inquiry parallels the inquiry conducted by the Alberta Utilities Commission (AUC) in 2022. Comparing the two inquiry frameworks reveals the similarities and differences between the two provinces’ approaches to hydrogen.

The AUC’s Hydrogen Inquiry

In March of 2022, the government of Alberta directed the AUC to inquire into and report to the Minister of Energy on the potential hydrogen blending into the province’s natural gas distribution systems.[1] The AUC then opened a public inquiry on the matter, the scope of which included the following:



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Information Requests and Responses in ENMAX’s 2023-2025 Transmission General Tariff Application

In proceeding 27581, the Alberta Utilities Commission (the Commission), the Consumers’ Coalition of Alberta (CCA), and the Utilities Consumer Advocate (UCA) each submit their information requests (IRs) to ENMAX Energy Corporation (ENMAX) regarding ENMAX’s 2023-2025 Transmission General Tariff Application. ENMAX recently responded to these IRs that covered operations and maintenance costs, depreciation practices, and specific projects and programs.



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EPCOR 2023-2025 TFO Tariff Application Evidence

In proceeding 27675, four intervenors on behalf of the Consumers’ Coalition of Alberta (CCA) and the Utilities Consumer Advocate (UCA) submit evidence addressing the 2023-2025 Transmission Facility Owner (TFO) application of EPCOR Distribution & Transmission Inc. (EPCOR). The evidence focuses on several issues including operating and maintenance costs, deferral accounts, full-time equivalents (FTEs), and depreciation.



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ATCO and Enforcement Staff Settlement Agreement on Customer Rate Class Switching Requests [Update]

In proceeding 27948, the Enforcement staff of the Alberta Utilities Commission (the Commission) request an enforcement proceeding and approval of a settlement agreement between the Enforcement staff and ATCO Gas and Pipelines Ltd. (ATCO). The investigation behind the agreement was in response to a complaint from TCB Welding & Construction Ltd. (TCB) concerning high-use delivery service charges. TCB alleged that ATCO delayed switching it from the mid-use to the high-use delivery service rate and TCB was overcharged from December 2020 to November 2021.[1]

The Contraventions

After their investigation, Enforcement staff found that ATCO failed:

  • To make TCB aware of ATCOs rate schedules for different customer rate classes.
  • To apply the most favourable rate schedule to TCB in a timely fashion.
  • To refund the difference in rates charged to TCB between when it requested an alternative rate and when ATCO updated TCB’s rate class.[2]


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