Consumers' Coalition of Alberta

Reconsideration of ATCO Electric Z Factor for the Wood Buffalo Fire

In proceeding 28320, the Alberta Utilities Commission (the Commission) reconsiders the Z factor adjustment of ATCO Electric (ATCO) for the 2016 Wood Buffalo fire. On April 14, 2023, the Alberta Court of Appeal issued its decision regarding ATCO Electric Ltd. v Alberta Utilities Commission, 2023 ABCA 129 (the Appeal decision) where ATCO sought to appeal the Commission’s denial of ATCO’s loss recovery associated with the 2016 fires. The Commission’s original decision relied on ATCO Gas & Pipelines Ltd. v Alberta (Energy & Utilities Board), 2006 SCC 4 (the Stores Block decision) in which the Commission understood that ‘extraordinary retirements’ of assets are attributable to shareholders rather than customers. However, the Alberta Court of Appeal overturned the Commission’s decision (which depended on an interpretation and application of the Stores Block decision) and referred the matter back to the Commission.



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ATCO Electric’s 2023-2025 General Tariff Application Decision

In Proceeding 27062, the Alberta Utilities Commission (the Commission) decides on the 2023-2025 General Tariff Application of ATCO Electric Ltd. (ATCO). The Commission allowed ATCO and interveners to enter a negotiated settlement process on all matters except for the Vegetation Management reserve removal and modifications to ATCO’s Variable Pay Program reserve. Parties were also unable to agree on the treatment of the $7.5 million undepreciated balance for ATCO’s Jasper Palisades isolated generation plant. Therefore, the Commission dealt with these three issues separately from the negotiated settlement.[1]



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EPCOR’s 2023-2025 General Tariff Application Decision

In proceeding 27675, the Alberta Utilities Commission (the Commission) issues its decision regarding the 2023-2025 general tariff application (GTA) of EPCOR Transmission & Distribution Inc. (EPCOR). Rather than proceed through an argument process, EPCOR negotiated a settlement with the Consumer’s Coalition of Alberta (CCA) and the Utilities Consumer Advocate (UCA). After review, the Commission approves EPCOR’s 2023-2025 GTA, which includes the negotiated settlement reduction of $10.81 million, the withdrawal of EPCOR’s request for a cloud-based software as a service (SaaS) cost deferral account, and compliance with Commission decisions.



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Arguments on ATCO’s Disposal of its 2018-2021 Transmission Deferral Accounts

In Proceeding 26573, ATCO Electric Ltd. (ATCO) proposed to remove $10.8 million of what it deemed as “above fair market value” costs related to matting, brushing, and hydrovac services for the Jasper Interconnection Project (Jasper Project). The proposed adjustment would reduce the project cost from $35.9 million to approximately $25.1 million. However, the original cost estimate for the project was $9.2 million.[1]

The Alberta Utilities Commission (the Commission) reopened this deferral account application after completing an investigative process that revealed ATCO sole-sourced its matting, brushing, and hydrovac contract to Backwoods Contracting Ltd. (Backwoods) at above-market rates. The $10.8 million is what ATCO estimates are the above-market amount spent on the project. In this proceeding, the CCA and the UCA present their arguments before the Commission on whether ATCO’s proposed $10.8 million reduction is reasonable. 



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ATCO Electric Transmission 2023-2025 Tariff Application Arguments

In Proceeding 27062, ATCO Electric Transmission (ATCO) submit its 2023-2025 general tariff application to the Alberta Utilities Commission (the Commission) for approval. In December 2022, all parties agreed to a negotiated settlement, which the Commission approved in January 2023. However, the settlement excluded the three following matters:

  • A depreciation adjustment related to the Jasper Palisades Isolated Generation Plant.
  • Modification to the variable pay program.
  • Vegetation management reserve removal.

The intervening parties submit their oral arguments that address these three remaining issues.



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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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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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Evidence regarding ATCO Electric’s Transmission 2023-2025 General Tariff Application

In Proceeding 27062, ATCO Electric Ltd. (ATCO) asks the Commission to approve their revenue requirement of $677.1 million in 2023, $687.8 million in 2024 and $698.6 million in 2025. ATCO notes that the 2023 requirement is lower than their 2022 forecast because they are proposing to stop collecting Future Income Tax (FIT) expenses, their property taxes are lower, and there are fewer head office costs. After completing a round of information requests, intervenors submitted evidence detailing their concerns regarding the application.[1]



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