ATCO seeks to delay hearing on excess profits for appeal process

A salient Alberta inferior is seeking to hold a proceeding connected due remedies for state and energy rates nan province’s utilities regulator says were neither reasonable nor justified.

ATCO Utilities, successful a missive sent precocious past period to nan Alberta Utilities Commission, disagrees pinch nan commission’s ruling and says it’s premature to proceed until entreaty processes are complete.

“(The decision) seemed to alteration nan rules aft nan fact,” Melanie Bayley, president of ATCO Electric, said successful an interview. “We disagree that rates weren’t adjacent and justified.”

ATCO Gas delivers earthy state to 1.3 cardinal customers — astir 82 per cent of Alberta homes and businesses. ATCO Electric delivers powerfulness to astir 230,000 customers successful northbound and east-central Alberta.

In June 2023, Alberta’s Utilities Consumer Advocate asked nan committee to look into profits made by nan 2 companies successful 2021 and 2022.

Like different Alberta utilities, nan companies run nether a bid of five-year agreements pinch nan regulator that licence them to make a complaint of profit wrong an agreed-upon range.

If existent profits transcend that range, nan inferior must beryllium they came from accrued ratio aliases greater productivity. If it can’t, nan regulator whitethorn reason nan creation of nan five-year woody is flawed.

It whitethorn past reopen nan woody and see what should beryllium done astir nan under- aliases overpayment.

In a May ruling, nan committee recovered ATCO Electric and ATCO Gas recorded profit margins successful 2021 and 2022 that were up to 26 per cent supra nan two-year period that whitethorn trigger a review.

The committee besides recovered nan companies benefited from reduced superior and operations expenditures. It ruled nan companies couldn’t adequately explicate nan reductions.

It calculated ATCO Electric had a full of $387 cardinal successful superior fund savings complete 2018-22 that it couldn’t nexus to immoderate work improvements. ATCO Gas had savings of $252 cardinal complete nan aforesaid period, pinch different $21 cardinal successful 2022 operational savings.

“The consequence is rates that were not conscionable and reasonable successful those years because customers were required to salary rates without receiving nan use of much businesslike inferior service,” nan committee wrote.

“Customers paid much than what was reasonably required for nan proviso of safe and reliable inferior service.”

ATCO disputes nan savings figures, which nan committee is reviewing. Those amounts don’t correspond a imaginable refund.

During nan hearings, ATCO Gas and ATCO Electric maintained nan unexplained costs savings came from initiatives specified arsenic organizational realignment, prioritization of projects and maintenance, metre replacement, instrumentality standardization and income taxation deductions.

Bayley said nan companies weren’t asked to way those kinds of impacts successful erstwhile agreements pinch nan commission.

“The mode successful which we were expected to way those costs wasn’t known to america until past year, erstwhile it was excessively late,” Bayley said.

“It’s difficult if not intolerable to property costs savings to immoderate 1 of those initiatives aliases to way them successful existent time.”

Still, nan committee wanted details. It said ATCO’s explanations were “high level, unsubstantiated and insufficient successful proportionality to nan different unquantified aliases unexplained costs savings.”

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It concluded that galore of nan savings resulted from nan companies choosing not to prosecute projects. Others were owed to costs savings from COVID-related factors specified arsenic proviso concatenation disruptions.

“The savings cannot beryllium attributed to utility-driven ratio gains,” nan committee wrote.

Bayley said each savings were passed connected to consumers successful a consequent statement pinch nan commission, which began successful 2023.

“Consumers coming are paying overmuch little rates.”

ATCO Utilities has asked nan committee to reconsider its ruling. ATCO has besides asked nan Alberta Court of Appeal for time off to entreaty it.

Bayley said nan commission’s ruling, if it stands, has implications overmuch wider than ATCO rates.

“The (commission) changed nan requirements of nan ratemaking plan, and it did truthful retroactively. That creates important uncertainty for utilities and investors.

“It’s conscionable communal consciousness that you cognize nan rules earlier you run nether them.”

The committee is group to statesman nan 2nd shape of its investigation, which considers remedies.

“The committee considers that an due remedy whitethorn beryllium successful nan quality of refunds to nan ATCO Utilities’ customers that subordinate to nan quantum of savings,” its determination says.

But ATCO argues that this shape should beryllium paused until its appeals tin beryllium heard. It says those appeals could consequence successful nan request to redo parts of nan proceeding aliases region nan request for 1 astatine all.

“The applicable consequences of immoderate specified scenarios, successful position of nan imaginable regulatory inefficiency and expenditure of unnecessary clip and resources, outweigh nan impacts associated pinch holding nan … proceeding successful abeyance,” it says successful a July 10 missive to nan commission.

Groups including nan Utilities Consumer Advocate, nan City of Calgary, nan Industrial Power Consumers of Alberta and nan Consumers Coalition of Alberta person each registered their volition to participate successful a proceeding connected imaginable remedies.

The committee is expected to present a determination connected its reappraisal by Aug. 1. The Court of Appeal could return until 2025 to determine whether aliases not to perceive ATCO’s petition for a review.

This study by The Canadian Press was first published July 19, 2024.