The Alberta Government recently implemented changes to the process of determining forecasted spending on large utility projects.
The July 26, announcement comes after the government signalled changes to the transmission cost oversight last January.
The aim was to promote accountability and increased awareness to the forecasted spending on larger utility projects.
“We have taken action to ensure that Albertans aren’t on the hook for unjustified costs associated with building transmission lines,” said Energy Minister Ken Hughes. “Transmission companies now must defend every cent they charge consumers. This brings more transparency and delivers on promises made following the retail market review.”
The change comes as a “welcome reversal of a reverse onus” according to the Alberta Utility Commission (AUC).
“The AUC is no longer compelled to accept transmission expenditures as prudent unless an intervener proves otherwise,” Jim Law, spokesperson for the Alberta’s Utility Commission said.
Essentially, the government will no longer have to rely on a third party to determine if forecasted costs are affordable, the utilities commission will be able to determine for itself.
According to Law, “All applications are scrutinized and allowed or disallowed and these include forecasts of future transmission expenditures.”
However, once the expenditures were made and forecasts were trued-up with the actual expenditures, the system later put the AUC in the position of approving whatever these subsequent expenditures were, on the required presumption that they were justified.
Law explained, “The change means transmission facility owners have to demonstrate that their incurred costs were prudent, instead of interveners having to demonstrate that they are unreasonable. This is what was commonly referred to as a “reverse onus.” It no longer applies.”
The regulation amendment will affect all applications currently awaiting approval.
The new regulation will force service providers to defend their costs, but “We always do,” Scott Schreiner spokesperson for AltaLink said.
“We’ve always managed our costs so that we have the lowest costs for our customers.”
The new regulations could affect one of the county’s largest construction projects, the West Alberta Transmission Line (WATL). Construction on the WATL has begun and is expected to be complete in April of 2015. The line, when completed, will run through Rocky View County communities such as Crossfield, east past Irricana and Langdon.
“They don’t affect the WATL forecast, but do apply to any Western line costs that still remain to come forward as actual expenditures,” Law explained.
