AEUB Approves Rate Design That Departs From Standard Principles

Article by Paul Jeffrey, ©2006 Blake, Cassels & Graydon LLP

This article was originally published in Blakes Bulletin on Energy Regulatory - May 2006

In its February 21, 2006 decision on NOVA Gas Transmission Ltd.’s (NGTL) rate design, the AEUB approved NGTL’s application to maintain the status quo, albeit with some reluctance and in the face of a host of alternatives proposed. The AEUB observed that in so doing it "marks a departure for the Board from its goal of attempting to match cost causation with cost responsibility".

On April 15, 2005, NGTL filed a 2005 Phase II General Rate Application. In it, NGTL fulfilled the AEUB’s earlier direction to file a fully allocated Cost of Service Study, an updated Distance of Haul study, an updated Cost of Haul study and rate design alternatives for the AEUB’s consideration, including an allocation of transmission costs "greater than zero" to the intra-Alberta delivery service rate. At issue for the AEUB, among other things, was