Establishing parameters for the third generation of performance-based regulation

The AUC regulates four companies who own and operate the province’s electric distribution system (ATCO Electric Ltd., Fortis Alberta Inc., ENMAX Power Corporation, and EPCOR Distribution & Transmission Inc.) and two companies for natural gas distribution (ATCO Gas and Pipelines Ltd., and Apex Utilities Inc.).

The AUC uses performance-based regulation (PBR) when setting rates for these distribution utility companies to encourage efficiencies through providing incentives for reducing costs while at the same time safeguarding reliability of service. As a result, distribution utility rates are kept lower for customers than they may have been otherwise. The regulatory model reduces the regulatory burden of a traditional cost-of-service model involving scrutiny of numerous financial statements and promotes incentives for utility companies to become more cost-conscious and improve operational efficiencies.

The AUC announced in Bulletin 2022-06 that it is initiating a proceeding to establish, modify, or add parameters for the next generation of performance-based regulation plans. To access the proceeding register to Proceeding 27388 through the eFiling System.

The term of the current performance-based regulation plans is five years (2018-2022) and they conclude this year. The new performance-based regulation term will commence in 2024 following a one-year cost-of-service rebasing year in 2023. The parameters for the new PBR plans will be set in Proceeding 27388.

The AUC uses an established process to review rate applications to ensure regulated customers receive safe and reliable service at just and reasonable rates. More information can be found on who the AUC regulates and the AUC’s review process for rate applications webpages.

Further information on the preliminary scope, procedural steps and schedule is provided in the eFiling System in Proceeding 27388.