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Alberta’s Utility Watchdog rejects company’s “refund” offer

“Given the modest relief of 2022, there is no compelling reason that future customers should pay more than 46 years of electricity.”

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Alberta’s utility Watchdog said the small cash payments proposed by AltaLink would ultimately cost millions of dollars more than the refund to the consumer, and the transmission company would refund the toll payer. The plan was discontinued.

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“Although AltaLink’s proposal provides a modest remedy for electricity prices to Alberta’s electricity customers, it is not a fair and reasonable rate,” said the Alberta Public Utility Commission’s decision. ..

“AltaLink’s proposal immediately requires that” customers will have to repay a “refund” in interest and freight costs for the next 46 years. “

The decision announced on Friday came after Alberta’s largest electricity transmitter, AltaLink, asked the Commission twice for permission to give consumers a refund. AltaLink said the refund opportunity was created by slower depreciation of some corporate assets than expected.

“Consumers in Alberta are feeling high energy price pressure on electricity prices,” said Gary Hart, president of AltaLink, in a press release on May 2. “We don’t need these funds for a long time, so we think it makes more sense to put this $ 120 million back into our most-needed Albertan pocket.”

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AltaLink’s proposal would reduce the average household bill by $ 5 a month.

However, the Commission pointed out that the refund would have been covered by a bank loan rather than cash. With interest, freight and other fees, by the end of the loan period, it would have cost more than $ 250 million, all of which would have been recovered from the consumer.

“Given the modest bailouts of 2022, there is no compelling reason that future customers should pay higher electricity prices than 46 years,” the Commission wrote.

“AltaLink’s proposal is better characterized as a loan. Refunds do not have to be refunded by the person receiving the refund.”

The Commission has calculated that not only will the person receiving the refund pay more than double, but AltaLink is likely to record a profit of $ 85 million during the transaction period. He refused to account for the impact of the proposed refund on its own.

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“The Review Panel has determined that AltaLink’s assumptions are” irrational and designed to achieve results, that is, to show the net present value to consumers. “

The Commission also said AltaLink’s concerns about the impact of inflation on its customers were “in contrast” to the company’s request to raise executive base salaries by 10%.

“We are disappointed that the Commission has reached this decision, but we respect their position,” said Scott Schreiner, spokesman for AltaLink.

“AltaLink continues to focus on providing solutions to reduce the cost of service to its customers. As part of its Flat for Five initiative, AltaLink has fulfilled its promise not to raise prices over the last five years. rice field.”

The Alberta Consumer Union has emerged before a committee that opposes AltaLink’s proposed refunds.

“When you look at all the results, all the costs were greater than this short-term benefit,” said lawyer Jim Wasovich.

Wachowich suggested that refunds are an attempt by companies to position themselves as helping consumers in times of high inflation. A better approach, according to Wachowich, is that AltaLink and other utilities reduce profit expectations.

“They didn’t want to do that.”

Commission spokesman Jeff Scotton said the decision was final and paved the way for AltaLink’s final appeal, except by requesting a special hearing at the Alberta Court of Appeals. rice field.

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Alberta’s Utility Watchdog rejects company’s “refund” offer

Source link Alberta’s Utility Watchdog rejects company’s “refund” offer

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