ENMAX’s R&V Application of the PBR3 K-bar Mechanism

In proceeding 28574, ENMAX Power Corporation (ENMAX) applies for a review and variance of the K-bar mechanism approved by the Alberta Utilities Commission (the Commission) for the third generation of performance-based regulation (PBR3). ENAMX asserts that the Commission erred in believing that the K-bar would provide ENMAX with sufficient funding and seeks the Commission to grant a review of the PBR3 K-bar. ENMAX’s case is grounded in its concern that the approved K-bar does not meet ENMAX’s needs to fund the replacement of its aging assets or to respond to the growing need to modernize the grid. Furthermore, ENMAX states that the current K-bar will force the utility to choose which benefits its customers will forgo and that it may have to put off investment into reliability drivers, externally driven projects, and grid modernization to prioritize safety on its network.[1]



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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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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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