From The Pipe, May 17, 2012
Performance Based Regulation (PBR) Coming in 2013 ATCO’s PBR hearing wrapped up on May 9. ATCO Gas and ATCO Electric (distribution) presented a combined panel to support their PBR plans. Last year the Alberta Utilities Commission (AUC) directed ATCO Gas and ATCO Electric to file an application for a new method of determining our rates, called Performance Based Regulation (PBR). Under PBR, the rates or revenues of the utility are determined by a formula that is based on inflation and industry productivity. The utilities are incented to find new ways to manage their costs because revenues are not driven by the specific costs of the utility. In the past, under Cost of Service regulation, ATCO would apply for approval of our forecasted costs, then rates would be set to recover those costs. The ATCO panel witnesses included Diane Wilson from the Utilities Business Group, Melanie Bayley from ATCO Gas, representatives from ATCO Electric, and external authorities. During the hearing, these witnesses presented their case supporting the two utilities’ PBR plans. The AUC and intervener groups cross-examined these representatives about the ATCO PBR plans, and ATCO cross-examined the intervener panels and National Economic Research Associates, the AUC’s independent productivity consultant, on their evidence. As the next step in the process, all parties will file Arguments in June, followed by Reply Arguments in July. The AUC then deliberates, taking into account the positions of ATCO and the interveners. They are expected to issue their decision regarding ATCO’s 2013 PBR in October.