David:

 

I would like to express my interest in participating in a collaborative process regarding the transition to IFRS.

 

Direct Energy is a subsidiary of a British company and its consolidated financial statements are already in accordance with IFRS. The Alberta regulated business, DERS, is the only segment of our North American operations that has its own set of audited financial statements for submission to the AUC. We need to study this subset of Direct Energy's financial statements to determine whether it also is in alignment with IFRS.

 

I agree all the account items you have listed need examination. Additional items that require consideration are:

 

    1. Whether future applications, negotiations and hearings should consider IFRS before making proposed changes?

        eg. is a 10 year amortization term for software consistent with IFRS? If not should a different amortization treatment be prescribed?

 

    2. What does a utility do if its current directives are not consistent with IFRS?

 

    3. What happens to Negotiated Settlement terms if they are not consistent with IFRS?

 

    4. Does a subsidiary such as DERS need to be compliant with IFRS when its corporate consolidated reports are compliant?

 

    5. Should IFRS considerations be built into applications related to 2011 onwards or sooner?

 

    6. If accounting system changes are required to align with IFRS will the cost of system changes be recoverable from customers?

 

    7. Can the AUC handle different timelines for conversion to IFRS among individual Alberta utilities?

 

 

I look forward to exploring these issues in collaboration with the AUC and other Alberta utilities.

Vicki Herd MBA CMA

Director of Finance, Regulated Energy

Direct Energy

1000 – 111 5^th Avenue SW, Calgary AB  T2P 3Y6

Phone: (403) 261-3440  Fax: (403) 290-4644

Mobile: (403) 519-7477

www.directenergy.com