specified penalties

Compliance and enforcement

Ensuring regulated utilities comply with AUC decisions, orders, rules and relevant legislation

Specified penalties


The Alberta Utilities Commission ensures Alberta's energy service providers are accountable for the services they provide, how they deliver those services and how they interact with customer

Effective January 1, 2019, the AUC can levy fines and issue public notices when electricity or natural gas service providers contravene AUC rules on utility billing, complaint response and other areas. The AUC considers and weighs the circumstances of each situation.

The AUC can address pre-defined rule contraventions through a series of set fines called specified penalties. These are financial penalties or fines that are applied when the AUC concludes contraventions have occurred and a penalty is required. They are comparable to speeding tickets, or parking tickets. These financial penalties increase as the frequency of the contraventions increase. No lengthy proceeding is required. The AUC can issue specified penalties escalating from $500 per incident, per day.

 
Types of penalties

Incorrect customer bills

Referral to credit agency in error

*Also triggers AUC Rule 003 service guarantee credit


Unexpected customer bills

Disconnection in error

*Also triggers AUC Rule 003 service guarantee credit


Late customer bills

System code errors

*Service guarantee requires a credit of $150 to customers erroneously disconnected or referred to a credit agency.

The AUC has a range of enforcement tools. Completely separate from specified penalties, the AUC can also issue, after a formal, evidence-based proceeding, administrative penalties that can range up to $1 million per incident per day. The largest such penalty imposed was $52 million

The AUC specified penalties rule

The AUC set out how specified penalties will be applied in its AUC Rule 032: Specified Penalties for Contravention of AUC Rules . This rule includes factors the AUC will consider when determining specified penalties that include self-reporting by energy service providers. AUC Rule 032 also includes a penalties table outlining the dollar amount charged to energy service providers for each penalty. 

The AUC was given the power to levy specified penalties for contraventions of its rules, orders and decisions through Bill 13, An Act to Secure Alberta's Energy Future. It intends to develop and apply specified penalties for many areas of its regulatory oversight. 

On July 19, 2019, The AUC issued Bulletin 2019-12 announcing an updated evaluation process for the assessment of specified penalties for self-reported contraventions. See Bulletin 2019-12 for more information. 


Priority 1: Billing errors subject to specified penalties

Because of the importance of billing to consumers, the AUC started with setting penalties for contraventions of AUC requirements related to billing-related and customer-care matters. These requirements are set out in AUC Rule 003: Service Standards for Energy Service Providers . These service providers provide electricity and natural gas in Alberta.


AUC Rule 003 service guarantee

Along with specified penalties, all Alberta energy service providers are subject to a service guarantee that requires them to provide a credit of $150 to customers that are erroneously disconnected or referred to a credit agency. This includes retailers, rural electrification associations and municipally owned utilities. Service providers regulated by the AUC must include this information in their terms and conditions.


Technical requirements subject to specified penalties

The AUC sets out technical requirements for utility providers for enrolling and de-enrolling a customer and requirements on transmitting updated information to and from distributors. There are contained in AUC Rule 021: Settlement System Code Rules for electric service providers, and Rule 028: Natural Gas Settlement System Code Rules for natural gas service providers.

Contraventions of these requirements are also subject to specified penalties, based on the same frequency and penalty schedule shown above.

Further application of specified penalties is underway or planned.


Think a contravention has occurred?

If you believe your utility provider may have contravened an AUC rule on billing or other matters covered by a specified penalty:

  1. You should first contact the energy service provider that issued your bill.
  2. If the response isn't satisfactory, please contact the Utilities Consumer Advocate (UCA). The UCA is specifically mandated to provide assistance to Alberta ratepayers to resolve issues with utility providers.
  3. If you feel the UCA cannot provide or hasn't provided an adequate outcome, please contact the AUC.

Background on specified penalties

Enforcement of Alberta’s laws, rules and regulations around how utilities operate, including the protection of utility consumers, is a central and important part of the work of the Alberta Utilities Commission – and it is work we take seriously.

In June 2018, the AUC received enhanced powers to backstop these responsibilities by developing and issuing specified penalties related to any of its decision instruments (decisions, orders, rulings, rules, etc.). The AUC's expanded powers flowed from Bill 13, An Act to Secure Alberta's Energy Future. Previously, AUC penalties could only be applied, where warranted, following a formal AUC proceeding process.

The AUC issued a bulletin to industry setting out its specified penalties framework in Bulletin 2018-20, issued December 18, 2018. This bulletin outlined our progress in launching specified penalties in January 2019 and included a new and several revised AUC rules.

Specified penalties are set financial sanctions imposed for infractions of the AUC's rules, orders, decisions and rulings. Generally they would apply to less egregious contraventions. The AUC also has the ability to impose administrative penalties of up to $1 million per day per infraction. The largest such penalty imposed was $52 million .

The changes in part reflected a desire by government to streamline the process and effort required for the AUC to deal with contraventions of utilities service quality requirements. Those requirements are incorporated in AUC Rule 002 and AUC Rule 003 , which deal with electricity and natural gas distributors, and regulated rate and default supply providers.

"It's going to make companies take notice and perhaps be a little more attentive to their practices," said Energy Minister Margaret McCuaig-Boyd in introducing the legislation earlier in 2018.

The AUC has worked collaboratively with stakeholders to shape and refine how specified penalties will work. The AUC's work has had two phases:

  • Phase 1: The AUC reviewed and consulted with stakeholders on the current AUC rules on customer care and billing.
  • Phase 2: The AUC created a new rule and set specified penalties pertaining to customer care and billing.
  • Work on specified penalties in other areas is underway.

The AUC's initial focus was on reviewing, and where necessary, revising the AUC's settlement system codes, which set out the requirement and obligations of companies involved in customer enrolment and de-enrolment. Matters related to these rules, AUC Rule 021: Settlement System Code Rules , and AUC Rule 28: Natural Gas Settlement System Code Rules were the source of many complaints to the Commission.

The review has been focused on the responsibilities of retailers and distributors around customer and site information, and has been informed by AUC staff experience in dealing with customer care and billing issues, input by the Utilities Consumer Advocate, stakeholders (particularly those who form the update customer information, or UCI, working group.) UCI transactions are one of the few areas related to the delivery of utilities that involve retailers directly and closely.

Beginning in August 2018, the AUC developed proposed changes and held a day-long stakeholder meeting in Red Deer. Another stakeholder meeting was held in mid-November, before the final changes were adopted by the AUC. Implementation is ongoing ahead of a formal launch in the January 2019.

In the future, the AUC will consider the development of specified penalties in other areas of the AUC's responsibilities. Among the areas where specified penalties may be developed are those related to conditions included in AUC approvals for facilities projects related to generation and transmission (electric and natural gas).

 

Access all regulatory documents

Anyone can access applications and proceeding information through the eFiling System.

Create a new account or log in below