Two initiatives the AHLA has supported to reduce regulated charges for transmission & distribution of utilities have been making progress:
1. AltaLink’s January 18, 2021, proposal to the Alberta Utility Commission (AUC) to refund $350 million to Alberta electricity customers between 2021 and 2023.
Outcome: The AUC has approved $230 million in net relief for customers in 2021. This will provide Alberta ratepayers with immediate — but temporary — rate relief this year. Because transmission costs are pooled and spread evenly over the province, all ratepayers should see the benefits.
2. The Utilities Consumer Advocate’s (UCA) January 18, 2020 Regulatory Intervention on Generic Cost of Capital 2022, which pertains to the return on equity (ROE) of 8.5% for regulated transmission & distribution utilities. The ROE cost translates into approximately 20% of the overall costs for regulated transmission & distribution rates. These charges often account for more than 50% of electricity and natural gas charges on a ratepayer’s monthly bill.
Outcome: On March 4, 2021, the AUC decided to maintain the ROE at 8.5% for regulated transmission & distribution utilities in Alberta until the end of 2022.
The UCA and AHLA believe this decision does not reflect the current economic realities faced by many Alberta businesses, including hotels. The UCA is reviewing this decision, which could result in a variance application or an appeal, on the grounds that the decision was issued without a full proceeding where all parties could present evidence and arguments.
The AHLA will continue to support the UCA on this issue as part of a coalition of industry stakeholders.