Decision D FortisAlberta Inc. Light-Emitting Diode Lighting Conversion Maintenance Multiplier for the City of St.

Transcription

1 Decision D Light-Emitting Diode Lighting Conversion Maintenance Multiplier for the City of St. Albert August 11, 2016

2 Alberta Utilities Commission Decision D Light-Emitting Diode Lighting Conversion Maintenance Multiplier for the City of St. Albert Proceeding August 11, 2016 Published by the: Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 Alberta Utilities Commission Calgary, Alberta Light-Emitting Diode Lighting Conversion Decision D Maintenance Multiplier for the City of St. Albert Proceeding Introduction and background 1. On June 24, 2016, filed, for information, its light-emitting diode (LED) lighting conversion maintenance multiplier mechanism for the City of St. Albert under its distribution tariff The Alberta Utilities Commission issued notice on June 27, 2016, asking interested parties who may be affected by this filing to provide their statements of intent to participate (SIPs) by July 11, The Commission did not receive any SIPs. 3. Upon reviewing the filing, the Commission determined that it required further information to enable it to render a decision and issued information requests (IRs), to which Fortis responded on July 22, The Commission has reviewed this filing as a basic written process as outlined in Bulletin , 2 and considers the record of this proceeding to have closed on July 22, In reaching the determinations set out in this decision, the Commission has considered all relevant materials comprising the record of this proceeding, as well as related information and decisions. References in this decision to specific parts of the record are intended to assist the reader in understanding the Commission s reasoning relating to a particular matter and should not be taken as an indication that the Commission did not consider all relevant portions of the record with respect to this matter. 2 Background 6. In Decision , 3 the Alberta Energy and Utilities Board (board), the Commission s predecessor, approved the inclusion of a maintenance multiplier mechanism in Fortis distribution tariff. 7. The maintenance multiplier was approved by the board to enable external lighting customers who desired a level of service that was higher than the standard level to receive that service, provided the costs incurred to provide the higher level of service were paid for by the customer making the request. A different multiplier would be calculated and applied to each particular customer request with the initial multiplier set to a default value of Exhibit X0002, filing. Bulletin , Performance standards for processing rate-related applications, March 26, Decision :, 2006/2007 Distribution Tariff Phase II and Other Matters, Proceeding 15136, Application , October 16, Decision , Section 9.3.1, pages Decision D (August 11, 2016) 1

4 8. In Decision , the board directed Fortis as follows: The Board directs FAI, upon preliminary agreement with a customer requesting maintenance or operation levels above the standard service level, to prepare an analysis and multiplier calculation which examines the specific and direct costs of providing that service. The Board directs FAI to confer with customers requesting the higher service levels upon completion of their multiplier calculation, provide information regarding the cost of the higher service level, and confirm customer acceptance. If the customer agrees with the multiplier proposal, the information should be filed with the Board for information purposes. Preparation of the detailed analysis should ensure other customers will not subsidize the customer with the special request. This analysis should also ensure the customer with the special request will not be double charged by way of the multiplier as they are already entitled to the standard level of service through their current rates In Proceeding 21512, the Commission considered Fortis first proposal to use the maintenance multiplier. In its filing, Fortis proposed to use the maintenance multiplier for five of its municipal customers (Canmore, Crowsnest Pass, Devon, Okotoks and Wetaskiwin). The Commission determined that the directions issued to Fortis by the board in Decision were still applicable to Fortis approved tariff and found that Fortis had complied with each of the directions. 6 3 Discussion of issues 10. Fortis provided a customer acknowledgement letter demonstrating that Fortis provided information regarding the higher cost of the service, the maintenance multiplier calculation itself, and the conditions under which the calculation and associated charges to the customer requesting the higher service level can change In response to IRs requesting additional information as to Fortis compliance with the directions in Decision , Fortis clarified that it was filing for the same LED Lighting Conversion Maintenance Multiplier of 1.10 for the City of St. Alberta as it did for the first five municipalities in Proceeding 21512, [and that] the responses to these directions in this Application remain unchanged from the initial application. 8 Fortis reproduced from its filing in Proceeding both the analysis and maintenance multiplier calculation for providing the LED conversion service and the 2016 bill impacts for a typical LED maintenance multiplier customer. 12. Fortis calculated the LED lighting conversion maintenance multiplier to be The calculation determined the estimated revenue requirement, on an average annualized per-fixture basis, resulting from: Decision , Section 9.3.1, page 71. Decision D :, Light-Emitting Diode Lighting Conversion Maintenance Multiplier, Proceeding 21512, June 15, 2016, page 3. Exhibit X0001, the City of St. Albert s signed customer acknowledgment letter. Exhibit X0009, FAI-AUC-2016JUL15-001, page 2. 2 Decision D (August 11, 2016)

5 (a) total LED installation costs (b) cost of eventual LED removal, based on useful life (c) maintenance savings due to the reduced need for street light patrols to identify and replace high-pressure sodium (HPS) fixtures that are no longer working, and the avoidance of capital costs related to the re-lamping of the old HPS fixtures Fortis estimated the 2016 bundled bill impact for a typical LED maintenance multiplier customer, with 100-watt HPS fixtures converted to LED fixtures, to be about a one per cent savings. It explained that although the LED conversion customers will experience a 10 per cent increase in their distribution component charges due to the maintenance multiplier, these customers are also expected to experience a reduction in their retail energy and transmission component charges because these charges are applied on a per-watt or per-kilowatt hour basis, and LED fixtures and drivers consume substantially less energy than HPS lamps and ballasts Fortis indicated that the LED lighting conversion maintenance multiplier of 1.10 will be applied to the Rate 31 distribution component fixture service charge This filing is the second time that Fortis has proposed to use the maintenance multiplier. The City of St. Albert signed a customer acknowledgement letter, which was submitted as an attachment to the filing In Decision , the board directed Fortis: to report on the level of administrative burden and effectiveness of the maintenance multiplier process, at the time of the next DTA [distribution tariff application]. The Board is interested in reviewing how the process has worked, and directs Fortis to provide information on the maintenance multipliers in use at the time of the next DTA where the use of the maintenance multiplier will be reviewed as to its continued appropriateness Fortis confirmed that it will respond to this direction in its next Phase II DTA In an IR response, Fortis also requested In its determination on this filing, that the Commission provide guidance on the level of detail it requires in future Filings for Information applications for additional municipalities that may choose the LED multiplier as approved in Decision D Commission findings 19. The directions issued to Fortis by the board are still applicable to Fortis currently approved tariff Exhibit X0009, FAI-AUC-2016JUL15-001, pages 2-5. Exhibit X0009, FAI-AUC-2016JUL15-002, pages 1-2. Exhibit X0001, page 3. Exhibit X0001. Decision , Section 9.3.1, page 71. Exhibit X0009, FAI-AUC-2016JUL15-001, page 5. Exhibit X0009, FAI-AUC-2016JUL15-001, page 5. Decision D (August 11, 2016) 3

6 20. The Commission finds that Fortis has complied with each of the directions issued by the board in Decision , specifically: Fortis provided an analysis and maintenance multiplier calculation which examines the specific and direct costs of providing the LED conversion service. The customer acknowledgement letter demonstrates that Fortis provided information regarding the higher cost of the service, the maintenance multiplier calculation itself, and the conditions under which the calculation and associated charges to the customer requesting the higher service level can change. The customer has accepted the conditions of service as demonstrated by the customer signature on the acknowledgement letter. As well, the letter included a clause acknowledging that Fortis has presented all material required by the customer to make an informed decision. The Commission is satisfied by the explanation and analysis provided by Fortis that other customers will not be subsidizing the City of St. Albert with the special (LED) request, nor will this customer with the special request be double charged by way of the maintenance multiplier for the special request and the standard level of service. Fortis confirmed that it will report on the level of administrative burden and effectiveness of the maintenance multiplier process at the time of the next Phase II DTA. 21. Accordingly, the Commission acknowledges and accepts Fortis LED lighting conversion maintenance multiplier filing for the City of St. Albert under its distribution tariff. 22. To respond to Fortis request for clarification about the filing requirements, each time Fortis submits a filing for use of a maintenance multiplier for exterior lighting customers who request levels of maintenance or operations above the standard service level, or for those customers who request lighting fixtures that incur higher-than-average lighting costs, for example for a LED conversion maintenance multiplier, Fortis should provide sufficient information to support its compliance with each of the directions identified in Decision , including the estimated bill impact for a typical maintenance multiplier customer for the year in which Fortis files the information. Dated on August 11, Alberta Utilities Commission (original signed by) Mark Kolesar Vice-Chair 4 Decision D (August 11, 2016)

7 Appendix 1 Proceeding participants Name of organization (abbreviation) Name of counsel or representative (Fortis or FAI) Alberta Utilities Commission Commission Panel M. Kolesar, Vice-Chair Commission Staff J. Graham (Commission counsel) E. Deryabina Decision D (August 11, 2016) 1