Alberta Utilities Commission Comments On Deemed And Actual Equity Ratios

On November 30, 2016, ENMAX Power Corporation applied to the Alberta Utilities Commission (AUC) for approval of a deemed equity ratio of 37 per cent for its distribution and transmission functions for 2016 and 2017. In its earlier generic cost of capital decision (Decision 20622-D01-2016), the AUC had approved a deemed equity ratio of 37 per cent as a placeholder for ENMAX.

The evidence before the AUC was that ENMAX had operated with a significantly lower 2015 year-end equity ratio than 37 per cent. In this context, the AUC issued a decision (Decision 22211-D01-2017) on July 27, 2017 in which it made a number of comments about differences between actual equity ratios maintained by a regulated utility and the utility's deemed equity ratio.