ATCO PBR2 Plan Review – Evidence and Arguments

In proceeding 28300, the Alberta Utilities Commission (the Commission) hears arguments for and against whether the plan for the second term of performance-based regulation (PBR2) of ATCO Gas and ATCO Electric (ATCO) was flawed; and if so, whether it is reasonable to re-open the plan. In proceeding 20414, the Commission set out a reopener provision allowing for the review of PBR plans if a utility’s return on equity (ROE) is 300 basis points above or below the approved ROE for two consecutive years, or if it is above or below 500 points in a single year. ATCO exceeded the 300-basis point threshold for 2021 and the 500-basis point threshold for 2022, triggering this current proceeding.[1]



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Commission’s Reconsideration Decision of ATCO’s Wood Buffalo Fire Z Factor Adjustment

In proceeding 28320, the Alberta Utilities Commission issues its decision regarding the reconsideration of the Z factor adjustment for the assets of ATCO Electric Ltd. (ATCO) which were destroyed in the 2016 Wood Buffalo fire. In Decision 21609-D01-2019, the Commission originally denied ATCO recovery of the net book value of the destroyed assets and ATCO was directed to remove the assets from its rate base. ATCO appealed the decision in ATCO Electric Ltd v Alberta Utilities Commission. The Alberta Court of Appeal (the Court) upheld ATCO’s appeal and then turned the initial decision back over to the Commission for reconsideration.



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The 2024 Return on Equity Calculation

In proceeding 28585, the Alberta Utilities Commission (the Commission) publishes its calculation of the 2024 return on equity (ROE) after having approved the parameter values required to implement the new ROE formula. The Commission’s proposed 2024 ROE, based on the formula, is 9.28 percent.



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Micro-Gen Dispute Decision

In proceeding 28319, the Alberta Utilities Commission (the Commission) issues its decision regarding the micro-generation dispute between ATCO Electric Ltd. (ATCO) and a farm. In June of 2023, the farm submitted a micro-generation application to ATCO and ATCO rejected the application on the basis that the generating capacity was too large relative to load. The crux of the disagreement was whether one year of history (ATCO’s position) or five years of history (the farm’s position) was sufficient to predict future load.



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The PBR3 Parameters

In Proceeding 27388, the Alberta Utilities Commission (the Commission) sets the parameters of the third term of performance-based regulation (PBR3) in Alberta, which w ill be applied to the four following electric distribution utilities: ATCO Electric Ltd., FortisAlberta Inc. (Fortis), ENMAX Power Corporation, and EPCOR Distribution & Transmission Inc. (EPCOR); and the following two natural gas distribution utilities, ATCO Gas and Pipelines Ltd. and Apex Utilities Inc. In sum, PBR3 builds upon PBR2 but makes some key changes in how benefits and efficiencies are respectively provided and quantified going forward with the addition of an efficiency sharing mechanism and the removal of the efficiency carryover mechanism.



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Principles of Maximum Investment Levels (MILs) Decision

In proceeding 27658, the Alberta Utilities Commission (the Commission) issues its decision on whether it remains reasonable for electric distribution utilities to invest in new residential customer connections up to a prescribed maximum investment level (MIL). Additionally, the Commission issues its decision on whether MILs related to street lighting installed in developments should be paid to the municipality within which the development was constructed or to the developer. Ultimately the Commission concludes the continuation of MILs, albeit under four new governing principles, and it decides that MILs should be paid to the municipalities in which a new development is constructed.[1]



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Decision on the Review and Variance Application of ATCO Gas’s PBR3 Base Revenue

In Proceeding 28244, the Alberta Utilities Commission (the Commission), the City of Calgary applied for the review and variance of Decision 26616-D01-2022 in which the Commission determined the 2023 cost-of-service applications of ATCO Gas (ATCO), and Apex Utilities Inc. Calgary had asserted that ATCO’s 2022 14 percent return on equity required a re-calculation of ATCO’s rate base going into the third term of performance-based regulation (PBR3) which had excluded data from years 2021 and 2022.



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Micro-Generation Proposal Dispute

In Proceeding 28139, ATCO Electric Ltd. (ATCO) issued a notice of dispute over whether a micro-generation unit proposed by EvolvSolar meets the generator qualifications outlined in the Micro-Generation Regulation.

EvolvSolar and its client applied to ATCO to construct a solar system that would produce 296,667 kWh per year to power a farm grain drying process. ATCO did not approve the application because the site usage averaged only 204,600 kWh over the past two years (2021 and 2022). The Micro-Generation Regulation defines a micro-generation unit as one intended to meet all or a portion of the site’s annual energy consumption. ATCO, as the wires owner, believes the proposed project does not qualify as a micro-generation unit since it might produce more energy than what is consumed on site.[1]



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2024 GCOC Arguments

In proceeding 27084, interveners submit their arguments over the matters put forward by the Alberta Utilities Commission (the Commission) regarding the generic cost of capital (GCOC). The Commission had already decided to proceed with a formulaic approach that was previously approved in 2009 and had asked interveners to provide recommendations for the formula’s variables. Interveners previously submited evidence detailing their variable recommendations and have since provided arguments supporting their evidence. However, some interveners continue to argue against the formulaic approach, and most proposed a specific return on equity (ROE) ratios for the 2024 GCOC.  A significant portion of argument focused on debating whether business risk has increased or decreased in the province and why the level of risk justifies each intervener’s proposal.



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Review and Variance Application of ATCO Gas PBR3 Base Revenue

In Proceeding 28244, The City of Calgary (Calgary) submits to the Alberta Utilities Commission (the Commission) a review and variance application of Decision 26616-D01-2023 which establishes the 2023 revenue requirement of ATCO Gas Distribution (ATCO). Calgary argues that ATCO’s 2022 14 percent return on equity triggers a re-calculation of ATCO’s rate base going into the third term of performance-based regulation (PBR3) which had excluded data from years 2021 and 2022.[1]



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