Proceeding 27388  Register

Application status: under review

Decision expected: To be determined

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Overview

In Alberta, four companies 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 for natural gas distribution (ATCO Gas and Pipelines Ltd., and Apex Utilities Inc.).

The AUC uses performance-based regulation 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.

In this proceeding, the AUC will aim to establish, modify, or add parameters of the third generation of performance-based regulation (PBR3) plans that will start in 2024 for Alberta distribution facility owners (DFOs). The first step in this process is to determine the scope of the proceeding and evaluate which parameters of the current 2018-2022 PBR plans may be retained and any parameters that may be modified, removed or added. These parameters include:

  • Any capital funding provisions, including the need for funding to keep pace with new trends affecting the grid.
  • Ensuring that the inflation measure (I factor) reflects the inflationary pressures expected during the PBR term.
  • Consideration of the need to update a productivity offset (X factor).
  • Consideration of introducing a mechanism to share earnings.

In addition, the AUC intends to examine whether gas and electric DFOs should continue to be regulated under two different types of PBR plans (revenue-per-customer cap for gas DFOs and price cap for electric DFOs) or whether they can be regulated under the same type of PBR plan.

The AUC may also consider conducting annual performance-based regulation rate updates on July 1 of each year (rather than on January 1 as is the current practice), to address concerns with rate changes at a time of year when customers may already face increased utility costs and other expenses.

How to participate​

To access the proceeding register to Proceeding 27388 through the eFiling System. The participation deadline is June 9, 2022.

The AUC will be conducting a roundtable in September 2022 to discuss best practices and areas for improvement, including examining parameters used in other jurisdictions that have implemented PBR. Further information on the preliminary scope, procedural steps and schedule will be provided in Proceeding 27388.

The eFiling System​

The eFiling System should be accessed to view the applications and the other documents the AUC will be considering in this proceeding. The system is also used to file submissions and evidence to participate in the proceeding.

To create an account, select “New account” and follow the steps to create a user ID and password. If you have any questions about how to use the system please contact us at info@auc.ab.ca or 310-4AUC.

Documents being considered in this proceeding can be found in the eFiling​ System (which requires log in). Once you have logged in, enter 27388 in the “go to” section at the top left corner of your screen.

Third-generation performance-based regulation