Decision D Generic Cost of Capital. Costs Award

Transcription

1 Decision D Costs Award December 2, 2016

2 Alberta Utilities Commission Decision D Costs Award Proceeding December 2, 2016 Published by Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 Contents 1 Introduction Procedural background Commission findings Authority to award costs ATCO transmission utilities Allocation of costs Assessment of costs claimed Bennett Jones LLP Twin Brooks Ltd The Brattle Group ATCO transmission utilities disbursements Total costs awarded AltaLink Management Ltd Allocation of costs Assessment of costs claimed Borden Ladner Gervais LLP Regulation UnFettered Sussex Economic Advisors AltaLink disbursements Total costs awarded EPCOR Distribution & Transmission Inc Allocation of costs Assessment of costs claimed Fasken Martineau DuMoulin LLP Regulation UnFettered Sussex Economic Advisors EPCOR (transmission) disbursements Total costs awarded Consumers Coalition of Alberta Assessment of costs claimed Wachowich & Company Regulatory Services Inc Dustin Madsen Consulting Total costs awarded Allocation of intervener costs Order ii Decision D (December 2, 2016)

4 Alberta Utilities Commission Calgary, Alberta Decision D Costs Award Proceeding Introduction 1. In this decision, the Alberta Utilities Commission considers applications by ATCO Electric Ltd. (transmission) and ATCO Pipelines, a division of ATCO Gas and Pipelines Ltd. (ATCO Pipelines) (collectively, the ATCO transmission utilities), AltaLink Management Ltd. (AltaLink), EPCOR Distribution and Transmission Inc. (transmission) and the Consumers Coalition of Alberta (CCA) for approval and payment of their costs of participation in Proceeding (the original proceeding). 2. The Commission has decided to approve or reduce some of the costs claimed for the reasons set out below. The following table sets out the costs claimed and the amounts awarded: Claimant Total Fees Claimed Total Disbursements Claimed Total GST Claimed Total Amount Claimed Total Fees Awarded Total Disbursements Awarded Total GST Awarded Total Amount Awarded ATCO Electric (transmission) Bennett Jones $107, $2, $0.00 $110, $107, $2, $0.00 $109, Twin Brooks $30, $0.00 $0.00 $30, $30, $0.00 $0.00 $30, Brattle Group $125, $2, $0.00 $128, $125, $2, $0.00 $128, ATCO Electric $43.56 $4, $0.00 $4, $43.56 $4, $0.00 $4, ATCO Pipelines Total $264, $9, $0.00 $273, $264, $9, $0.00 $273, Bennett Jones $20, $ $0.00 $20, $20, $ $0.00 $20, Twin Brooks $5, $0.00 $0.00 $5, $5, $0.00 $0.00 $5, Brattle Group $23, $ $0.00 $24, $23, $ $0.00 $24, ATCO Pipelines $8.19 $ $0.00 $ $8.19 $ $0.00 $ Total $49, $1, $0.00 $51, $49, $1, $0.00 $51, AltaLink Borden Ladner Gervais LLP $302, $7, $0.00 $310, $302, $7, $0.00 $310, Regulation UnFettered $31, $1, $0.00 $32, $31, $1, $0.00 $32, Sussex Economic Advisors $183, $1, $0.00 $185, $183, $1, $0.00 $185, AltaLink $0.00 $14, $0.00 $14, $0.00 $14, $0.00 $14, Total $517, $24, $0.00 $542, $517, $24, $0.00 $542, EPCOR (transmission) Fasken Martineau DuMoulin LLP $89, $1, $0.00 $91, $89, $1, $0.00 $91, Regulation UnFettered $13, $ $0.00 $13, $13, $ $0.00 $13, Sussex Economics $82, $ $0.00 $83, $82, $ $0.00 $83, EPCOR $0.00 $4, $0.00 $4, $0.00 $4, $0.00 $4, Total $185, $7, $0.00 $192, $185, $7, $0.00 $192, CCA Wachowich & Company $132, $8, $7, $148, $118, $8, $6, $134, Regulatory Services Inc. $124, $0.00 $6, $130, $105, $0.00 $5, $110, Dustin Madsen Consulting $5, $0.00 $ $5, $4, $0.00 $ $4, Total $261, $8, $13, $284, $228, $8, $11, $249, Total of all amounts claimed and awarded $1,344, $1,309, Decision D (December 2, 2016) 1

5 2 Procedural background 3. The original proceeding was initiated by the Commission on July 30, 2015, to establish the allowed return on equity (ROE) and capital structures for the years 2016 and 2017, for the following utilities: AltaGas Utilities Inc. (AltaGas) AltaLink ATCO Electric Ltd. (ATCO Electric) (transmission and distribution) ATCO Gas, a division of ATCO Gas and Pipelines Ltd. (ATCO Gas) ATCO Pipelines ENMAX Power Corporation (ENMAX) (transmission and distribution) EPCOR Distribution and Transmission Inc. (EPCOR) (transmission and distribution) FortisAlberta (FortisAlberta) City of Lethbridge (Lethbridge) City of Red Deer (Red Deer) TransAlta Corporation (TransAlta) 4. During the course of the original proceeding, the Commission deferred consideration of the capital structure for ATCO Electric (transmission) until a decision was rendered on its general tariff application, Proceeding Each of the utilities listed above, except for Lethbridge, Red Deer and TransAlta, participated in the original proceeding. The ATCO transmission utilities, ATCO Electric (distribution), ATCO Gas, AltaGas, ENMAX and FortisAlberta (collectively, the Utilities), after registering individually, filed joint submissions during the proceeding and co-sponsored evidence from The Brattle Group (Brattle) and Twin Brooks Ltd. (Twin Brooks). 6. AltaLink and EPCOR co-sponsored evidence from Sussex Economics (Sussex) and Regulation UnFettered; AltaLink also provided company-specific evidence. 7. Interveners in the original proceeding were the CCA, the City of Calgary, the Canadian Association of Petroleum Producers and the Office of the Utilities Consumer Advocate. 8. The original proceeding included information requests (IRs) and IR responses, written evidence, an oral hearing and oral argument and reply. It also included a negotiated settlement process that was initiated by certain utilities on September 30, 2015, although no settlement was reached. 9. The oral hearing for the proceeding was held in Edmonton, Alberta, for a total of 12 days (May 31, 2016 to June 3, 2016, inclusive; June 6, 2016 to June 10, 2016, inclusive; June 13, 2016; and June 28 and 29, 2016). The close of record for the proceeding was June 29, 2016, and the Commission issued Decision D on October 7, Exhibit X0041. Decision D :, Proceeding 20622, October 7, Decision D (December 2, 2016)

6 10. On July 26, 2016, prior to the expiration of the 30 day time limit for the submission of costs claims under Rule 022: Rules on Costs in Utility Rate Proceedings (Rule 022), the Commission received a request from the ATCO transmission utilities for an extension to the filing date for their costs claims. 3 The Commission received a similar request from AltaLink on behalf of itself and EPCOR. 4 The Commission granted an extension to the ATCO transmission utilities, EPCOR and AltaLink for the filing of their costs claims until August 12, The Commission assigned Proceeding to the ATCO transmission utilities request for a time extension and their subsequent joint costs claim application. 12. The CCA submitted its costs claim application on August 2, The Commission considered the CCA s application in Proceeding as Application A On August 12, 2016, the ATCO transmission utilities, EPCOR (transmission) and AltaLink submitted their costs claim applications. Within Proceeding 21856, their applications were assigned Application A001, Application A003 and Application A004, respectively. 14. Each of FortisAlberta, ATCO Electric (distribution), EPCOR (distribution), ATCO Gas, AltaGas, and ENMAX (distribution) did not file costs claims because their rates are regulated under performance-based regulation (PBR). ENMAX (transmission) also did not file a costs claim application. 15. The Commission issued a letter dated August 22, 2016, requesting that comments be received by September 5, 2016 regarding the figures listed in the costs claim applications or the merits of the total costs claimed. 6 The Commission did not receive any comments. Accordingly, the Commission considers the close of record for this costs claims proceeding to be September 5, Commission findings 3.1 Authority to award costs 16. The Commission s authority to award costs for participation in a utility rates proceeding is found in Section 21 of the Alberta Utilities Commission Act. When considering a claim for costs for a utility rates proceeding, the Commission is also guided by the factors set out in Section 11 of Rule 022, which allows the Commission to consider, among other things, whether the cost claims are reasonable and directly and necessarily related to the hearing, and whether the participants acted responsibly and contributed to a better understanding of the issues before the Commission. Appendix A of Rule 022 prescribes a Scale of Costs applicable to all costs claimed Exhibit X0001. Exhibit X0012. Exhibit X0015. Exhibit X0022. Decision D (December 2, 2016) 3

7 3.2 ATCO transmission utilities Allocation of costs 17. The ATCO transmission utilities submitted a costs claim totaling $325, for legal services performed by Bennett Jones LLP (Bennett Jones), consultant services performed by Brattle and Twin Brooks, and internal costs. 7 As noted above, the consulting fees for Brattle and Twin Brooks were for services provided to all of the Utilities as a group. 18. In their costs application, the ATCO transmission utilities indicated that the Utilities agreed to share the costs for the engagement of Brattle and Twin Brooks according to a formula based on a two year average of their respective mid-year rate base amounts. Based on this formula, the ATCO Utilities (comprising ATCO Electric (transmission), ATCO Electric (distribution), ATCO Gas, and ATCO Pipelines) were allocated 50 per cent of the external costs related to the engagement of Brattle and Twin Brooks. The Commission finds the allocation methodology to be reasonable because it is consistent with the cost sharing formula approved previously by the Commission in Decision 3597-D The ATCO Utilities then further allocated the costs for Brattle and Twin Brooks among each of the ATCO Utilities based on the two year average of their respective mid-year rate bases. Bennett Jones fees were also allocated among the ATCO Utilities on the same basis. The resulting allocations for the ATCO Utilities are as follows: 9.1 per cent to ATCO Pipelines; 18.4 per cent of costs to ATCO Gas; 24.1 per cent to ATCO Electric (distribution); and 48.4 per cent to ATCO Electric (transmission). 20. The combined claims of the ATCO transmission utilities, therefore, represent 57.5 per cent of the total costs incurred by the ATCO Utilities in the original proceeding. 21. The cost sharing formula agreed to by the ATCO Utilities was also previously approved by the Commission in Decision 3597-D Accordingly, the Commission finds that the allocation method and the resulting division of costs among the ATCO Utilities is reasonable in the circumstances Assessment of costs claimed 22. The following table summarizes the costs claimed by the ATCO transmission utilities: 7 8 The ATCO Transmission Utilities costs application is partial in anticipation that the record will be re-opened to consider the effect of ATCO Electric s Transmission General Tariff Application, Proceeding Decision 3597-D : 2013 Generic Cost of Capital Costs Award, Proceeding 3597, July 13, Decision D (December 2, 2016)

8 Claimant ATCO Electric (transmission) Hours Preparation Attendance Argument Fees Disbursements GST Total Bennett Jones $107, $2, $0.00 $110, Twin Brooks $30, $0.00 $0.00 $30, Brattle Group 1, $125, $2, $0.00 $128, ATCO Electric $43.56 $4, $0.00 $4, ATCO Pipelines Total 2, $264, $9, $0.00 $273, Bennett Jones $20, $ $0.00 $20, Twin Brooks $5, $0.00 $0.00 $5, Brattle Group $23, $ $0.00 $24, ATCO Pipelines $8.19 $ $0.00 $ Total $49, $1, $0.00 $51, Grand Total 2, $314, $10, $0.00 $325, The Commission finds that the ATCO transmission utilities acted responsibly in the original proceeding and contributed to the Commission s understanding of the relevant issues. However, the Commission is unable to approve the full amount of the legal fees claimed for the reasons set out below Bennett Jones LLP 24. As noted above, the ATCO transmission utilities were represented by Bennett Jones in the original proceeding. The fees claimed by the ATCO transmission utilities for the legal services provided by Mr. Smith, Ms. Sheehan, Ms. Prentice, Mr. Bryanskiy and Mr. Hassan included: responding to the Commission s issues list; preparing for and attending pre-hearing meetings; preparing for and attending negotiated settlement meetings; drafting and reviewing direct and rebuttal evidence, IRs and IR responses; preparing expert witnesses; drafting crossexamination; preparing for and attending the oral hearing; reviewing transcripts and drafting undertaking responses; and preparing argument and reply argument. Additionally, 0.12 of the hours claimed relate to document processing. 25. The Commission finds that the services performed by Bennett Jones were directly and necessarily related to the participation of the ATCO transmission utilities in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs, are reasonable. In particular, the Commission notes that the ATCO transmission utilities worked in conjunction with the other Utilities in the preparation of evidence, crossexamination and argument. The Commission finds that this cooperation avoided duplication of effort and a protracted hearing process. 26. However, the Commission is unable to approve the full amount claimed. The ATCO transmission utilities costs claim included Invoice , which relates to legal costs incurred to adjourn an appeal unrelated to the original proceeding. Appeal related costs are generally not recoverable from ratepayers, and these particular costs are not related to the original proceeding and, therefore, they are not recoverable under Rule 022. Consequently, the Commission denies recovery by the ATCO transmission utilities of the costs associated with this invoice. This results Decision D (December 2, 2016) 5

9 in a reduction of $ in legal fees for ATCO Electric (transmission) and a reduction of $52.05 in fees for ATCO Pipelines. 27. The Commission approves the claim by ATCO Electric (transmission) for legal fees in the amount of $107, and ATCO Pipelines claim for legal fees for Bennett Jones in the amount of $20, The Commission has reviewed the disbursements incurred by Bennett Jones for photocopying, meals, accommodation and travel in the amount of $2, allocated to ATCO Electric (transmission) and $ allocated to ATCO Pipelines and finds that they are in accordance with the Scale of Costs and are, therefore, approved Twin Brooks Ltd. 29. Mr. Buttke of Twin Brooks was retained by the Utilities to provide testimony on the current state of markets globally, with a specific focus on the U.S. and Canada. He also presented evidence on market participant perceptions of risk and reward in the Canadian utility sector. 30. The ATCO transmission utilities claimed a total of $36, for Mr. Buttke s services, which is in accordance with the agreed allocation of costs among the Utilities as well as among the ATCO Utilities. The fees claimed for the consulting services provided by Twin Brooks relate to: preparing written evidence; reviewing IRs from interveners; drafting IR responses; reviewing intervener evidence; drafting IRs to interveners; preparing rebuttal evidence; testifying at the oral hearing and assisting legal counsel in the preparation of cross-examination as well as oral argument and reply. 31. The Commission finds that the services performed by Twin Brooks were directly and necessarily related to the Utilities participation in the original proceeding, and that the fees, which were claimed in accordance with the Scale of Costs for those services, are reasonable. In particular, the Commission notes that it relied directly upon Mr. Buttke s evidence in its findings in Decision D Accordingly, the Commission approves the claim by ATCO Electric (transmission) for consulting fees for Twin Brooks in the amount of $30, and ATCO Pipeline s claim in the amount of $5, The Brattle Group 32. The Utilities retained Dr. Carpenter and Dr. Villadsen from Brattle to provide expert evidence in the original proceeding. Dr. Carpenter provided evidence on the business risk of the Utilities in the years 2016 and 2017, while Dr. Villadsen testified on the estimated cost of equity and on capital structure. 33. The ATCO transmission utilities claimed a total of $149, in fees for Brattle s services, which is in accordance with the agreed allocation of costs among the Utilities and among the ATCO Utilities. The fees claimed by the ATCO transmission utilities for the services provided by Dr. Carpenter and Dr. Villadsen relate to: preparing written evidence; drafting IR responses; reviewing intervener evidence; drafting IRs to interveners; preparing rebuttal 9 Decision D at paragraphs 81 and Decision D (December 2, 2016)

10 evidence; testifying at the oral hearing as expert witnesses; and assisting legal counsel in the preparation of cross-examination as well as oral argument and reply. 34. The Commission finds that the services performed by Brattle were directly and necessarily related to the ATCO Utilities participation in the original proceeding, and that the fees, which were claimed in accordance with the Scale of Costs for those services, are reasonable. Brattle s participation was effective and of assistance in the proceeding, and contributed to a better understanding of the issues before the Commission. In particular, the Commission notes that it relied directly upon the evidence of Dr. Carpenter and Dr. Villadsen in its findings in Decision D Accordingly, the Commission approves the claim by ATCO Electric (transmission) for consulting fees for Brattle in the amount of $125, and ATCO Pipelines claim in the amount of $23, The Commission has reviewed the disbursements claimed for airfare, meals, accommodation, taxi and courier fees in the amount of $2, for ATCO Electric (transmission) and $ for ATCO Pipelines and finds that they are in accordance with the Scale of Costs and are, therefore, approved. 36. Accordingly, the Commission approves the claim by ATCO Electric (transmission) for consulting fees for Brattle in the amount of $125,914.72, and disbursements of $2, for a total of $128, Similarly, the Commission approves ATCO Pipeline s claim for consulting fees for Brattle in the amount of $23, and disbursements of $ for a total of $24, ATCO transmission utilities disbursements 37. The ATCO transmission utilities requested recovery of disbursements for transcript costs. The Commission finds that the disbursements claimed are reasonable because they are directly and necessarily related to the proceeding and are within the Scale of Costs. Accordingly, the Commission approves the claim by ATCO Electric (transmission) for disbursements in the amount of $4, and ATCO Pipelines claim for disbursements in the amount of $ Total costs awarded 38. For the reasons set out above, the Commission approves the claim by ATCO Electric (transmission) for recovery of costs in the total amount of $273, This amount is composed of legal fees of $107,424.38, consulting fees of $156, and disbursements of $9, Similarly, the Commission approves the claim by ATCO Pipelines for recovery of costs in the total amount of $51, This amount is composed of legal fees of $20,197.56, consulting fees of $29, and disbursements of $1, AltaLink Management Ltd Allocation of costs 39. AltaLink submitted a costs claim in the amount of $542, for legal services performed by Borden Ladner Gervais LLP (BLG), consultant services performed by Sussex and 10 See, e.g., Decision D at paragraphs 90, 105, 180 and 515. Decision D (December 2, 2016) 7

11 Regulation UnFettered and internal costs. As noted above, the consulting fees for Sussex and Regulation UnFettered were for services provided to AltaLink and EPCOR. 40. In its application, AltaLink stated that it agreed to share the costs for the engagement of Sussex and Regulation UnFettered equally with EPCOR. EPCOR then allocated the consultant costs between its distribution and transmission functions. 41. The Commission finds that the allocation of consultant costs between AltaLink and EPCOR is reasonable in the circumstances Assessment of costs claimed 42. The following table summarizes AltaLink s costs claim: Claimant AltaLink Hours Preparation Attendance Argument Fees Disbursements GST Total Borden Ladner Gervais $302, $7, $0.00 $310, Regulation UnFettered $31, $1, $0.00 $32, Sussex Economic Advisors $183, $1, $0.00 $185, AltaLink Management Ltd $0.00 $14, $0.00 $14, Total 1, $517, $24, $0.00 $542, The Commission finds that AltaLink acted responsibly in the original proceeding and contributed to a better understanding of the relevant issues Borden Ladner Gervais LLP 44. AltaLink was represented by BLG in the original proceeding. The fees claimed by AltaLink for the legal services provided by BLG and specifically by Mr. Block and Mr. Massicotte, as well as Ms. Desbarats, Ms. Shannon, Ms. Salmon and Mr. Wilson, included: preparing for and attending negotiated settlement meetings; reviewing direct and rebuttal evidence, IRs and IR responses; preparing expert and company witnesses; drafting crossexamination; preparing for and attending the oral hearing; reviewing transcripts and drafting undertaking responses; and preparing oral argument and reply argument. 45. The Commission finds that the services performed by BLG were directly and necessarily related to AltaLink s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. In particular, the Commission recognizes that legal counsel for AltaLink and EPCOR coordinated cross-examination to avoid duplication and similarly avoided repetition in oral argument. The Commission also accepts that BLG assumed a larger role in the original proceeding than in the previous GCOC proceeding as a result of AltaLink providing companyspecific evidence. Accordingly, the Commission approves AltaLink s claim for legal fees for BLG in the amount of $302, and disbursements for airfare, mileage, taxi, parking, transcript costs, courier fees, telephone charges and photocopying of $7, for a total of $310, Decision D (December 2, 2016)

12 Regulation UnFettered 46. Mr. Fetter of Regulation UnFettered was retained by AltaLink and EPCOR to provide evidence regarding credit ratings and regulatory environment issues. The fees claimed by AltaLink in the amount of $31, for the services provided by Mr. Fetter relate to: preparing direct and rebuttal evidence; drafting IR responses; reviewing intervener evidence; preparing for and attending the oral hearing as an expert witness; and assisting legal counsel with oral argument and reply. 47. The Commission finds that the services performed by Regulation UnFettered were directly and necessarily related to AltaLink s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. Accordingly, the Commission approves AltaLink s claim for consulting fees for Regulation UnFettered in the amount of $31, and disbursements for airfare, accommodation, mileage and taxi fees of $1, for a total of $32, Sussex Economic Advisors 48. AltaLink and EPCOR retained Mr. Hevert of Sussex Economic Advisors to provide expert testimony regarding the cost of equity and capital structure. Mr. Hevert also provided evidence on capital market conditions, the integration and interdependence of the Canadian and U.S. economies and equity markets, and common equity rate analyses using various models and methodologies. 49. The fees claimed by AltaLink for the consulting services provided by Mr. Hevert include: preparing written evidence; drafting IR responses; reviewing the evidence of other utilities and interveners; drafting rebuttal evidence; preparing for and attending the oral hearing as an expert witness; and assisting legal counsel with drafting cross-examination and oral argument and reply. 50. The Commission finds that the services performed by Sussex were directly and necessarily related to AltaLink s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. In particular, the Commission notes that it relied directly upon Mr. Hevert s evidence in its findings in Decision D Accordingly, the Commission approves AltaLink s claim for consulting fees for Sussex in the amount of $183, and disbursements for airfare, accommodation, meals, taxi and telephone charges of $1, for a total of $185, AltaLink disbursements 51. AltaLink requested recovery of disbursements for transcript costs, accommodation, rental car, airfare, meals, mileage and parking. The Commission finds that the disbursements claimed are reasonable because they are directly and necessarily related to the proceeding and are within the Scale of Costs. Accordingly, the Commission approves AltaLink s claim for disbursements in the amount of $14, Decision D at e.g., paragraphs 91, 101, 151, and 319. Decision D (December 2, 2016) 9

13 Total costs awarded 52. For the reasons set out above, the Commission approves the claim by AltaLink for recovery of costs in the total amount of $542, This amount is composed of legal fees of $302,962.84, consulting fees of $214, and disbursements of $24, EPCOR Distribution & Transmission Inc Allocation of costs 53. EPCOR (transmission) submitted a costs claim in the amount of $192, for legal services performed by Fasken Martineau DuMoulin LLP (Fasken), consultant services performed by Sussex and Regulation UnFettered, and internal costs. 54. EPCOR agreed to share the consulting fees for Sussex and Regulation UnFettered equally with AltaLink. EPCOR then allocated the consultant fees, as well as the legal fees incurred by Fasken, 55 per cent to the distribution function and 45 per cent to the transmission function pursuant to the Commission s direction in Decision 3597-D In that decision, the Commission determined that costs would be allocated in proportion to the two-year average of the mid-term rate base for EPCOR s distribution and transmission functions. 55. As EPCOR s distribution function is currently regulated under the Commission s approved PBR plan, EPCOR s costs claim pertains to the 45 per cent allocation to EPCOR s transmission function only. 56. The Commission finds that the allocation of costs between AltaLink and EPCOR, and the further allocation of these costs as well as legal costs between EPCOR s distribution and transmission functions, are reasonable in the circumstances Assessment of costs claimed 57. The following table summarizes the EPCOR (transmission) costs claim: Claimant Hours Preparation Attendance Argument Fees Disbursements GST Total EPCOR Fasken Martineau DuMoulin LLP $89, $1, $0.00 $91, Regulation UnFettered $13, $ $0.00 $13, Sussex Economics $82, $ $0.00 $83, EDTI $0.00 $4, $0.00 $4, Total $185, $7, $0.00 $192, The Commission finds that EPCOR acted responsibly in the original proceeding and contributed to a better understanding of the relevant issues Fasken Martineau DuMoulin LLP 59. EPCOR was represented by Fasken and specifically by Mr. Liteplo in the original proceeding. The fees claimed by EPCOR in the amount of $89, for legal services provided by Mr. Liteplo, Mr. Bystrom, Ms. Roskey and Mr. Hulecki include: reviewing direct and rebuttal evidence as well as draft IRs; reviewing intervener evidence; preparing expert witnesses for 10 Decision D (December 2, 2016)

14 cross-examination; and preparing for and attending the oral hearing; and drafting oral argument and reply. 60. The Commission finds that the services performed by Fasken were directly and necessarily related to EPCOR s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. In particular, the Commission notes that Fasken worked cooperatively with BLG, dividing work on common technical issues where appropriate and avoiding duplication of effort where possible. Accordingly, the Commission approves the claim by EPCOR (transmission) for legal fees for Fasken in the amount of $89, The Commission also finds that the disbursements claimed by EPCOR (transmission) incurred by Fasken are within the Scale of Costs and, therefore, approves the recovery of the full amount, $1, As a result, the Commission approves the claim by EPCOR (transmission) for legal services for Fasken Martineau DuMoulin LLP in the total amount of $91, Regulation UnFettered 63. Regulation UnFettered was jointly retained by EPCOR and AltaLink to provide expert evidence in the original proceeding. The EPCOR (transmission) portion of consultant fees for Regulation UnFettered is $13, The Commission finds that the services performed by Mr. Fetter were directly and necessarily related to EPCOR s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. Accordingly, the Commission approves the claim by EPCOR (transmission) for consulting fees for Regulation UnFettered in the amount of $13, and disbursements for airfare, accommodation, mileage and taxi fees of $ for a total of $13, Sussex Economic Advisors 65. As noted above, Sussex was jointly retained by EPCOR and AltaLink to provide expert testimony regarding the cost of equity and capital structure. The EPCOR (transmission) allocation of consultant fees and time claimed for Sussex is $82, The Commission finds that the services performed by Mr. Hevert were directly and necessarily related to EPCOR s participation in the original proceeding, and that the fees and disbursements, which were claimed in accordance with the Scale of Costs for those services, are reasonable. Accordingly, the Commission approves the EPCOR (transmission) claim for consulting fees for Sussex in the amount of $82,359.79, and disbursements for airfare, accommodation, meals, taxi and telephone charges of $ for a total of $83, EPCOR (transmission) disbursements 67. EPCOR (transmission) requested recovery of $4, in disbursements for transcript costs and parking expenses incurred during the oral hearing. The Commission finds that the disbursements claimed are reasonable because they are directly and necessarily related to the proceeding and are within the Scale of Costs. Accordingly, the Commission approves the claim by EPCOR (transmission) for disbursements in the amount of $4, Decision D (December 2, 2016) 11

15 Total costs awarded 68. For the reasons set out above, the Commission approves the claim by EPCOR (transmission) for recovery of costs in the total amount of $192, This amount is composed of legal fees of $89,962.20, consulting fees of $95, and disbursements of $7, Consumers Coalition of Alberta Assessment of costs claimed 69. The following table summarizes the CCA s costs claim: Claimant CCA Hours Preparation Attendance Argument Fees Disbursements GST Total Wachowich & Company $132, $8, $7, $148, Regulatory Services Inc $124, $0.00 $6, $130, Dustin Madsen Consulting $5, $0.00 $ $5, Total $261, $8, $13, $284, The Commission finds that the CCA generally acted responsibly in the original proceeding and contributed to the Commission s understanding of the relevant issues. However, the Commission is unable to approve the full amount of the costs claimed in respect of the services performed by Wachowich & Company, Regulatory Services Inc. and Dustin Madsen Consulting for the reasons set out below Wachowich & Company 71. The CCA was represented by Wachowich & Company in the original proceeding. The fees claimed by the CCA are for legal services provided by Mr. Wachowich and Ms. Gibbons that relate to: reviewing evidence; attending negotiation meetings; reviewing IR responses; drafting cross-examination; preparing for and attending the oral hearing; and drafting oral argument. 72. Additionally, the fees include hours for work performed by Mr. Riley, a research associate who provided direct assistance to Wachowich & Company, at a rate of $ per hour exclusive of GST. The hours claimed by Mr. Riley appear to relate principally to an IR (i.e., CCA-Utilities-2016 Apr 28-05) regarding the standard deviation of earned ROEs of various utilities. 73. The Commission finds that the services performed by Wachowich & Company were, in general, directly and necessarily related to the CCA s participation in the original proceeding, and that the fees and disbursements were claimed in accordance with the Scale of Costs for those services. With respect to the work performed by Mr. Riley in particular, the Commission finds that these expenses were necessary as they were incurred in order to respond to an IR from the Utilities. 74. However, the Commission finds that some of the fees claimed for Wachowich & Company s legal services are unreasonable because a portion of cross-examination and argument 12 Decision D (December 2, 2016)

16 focused on issues that were either not relevant or contained argument that was not of assistance to the Commission in reaching its determinations in Decision D , as required by Section 11.1 of Rule 022. The particular issue raised by the CCA that was not required for the Commission s determination of ROE and capital structure was related to the returns historically earned by the utilities. 75. In addition, the timesheets do not provide sufficient detail to allow the Commission to assess the tasks performed or how those tasks relate to the original proceeding. Specifically, the line items on the time sheets do not provide an explanation of the relationship between the hours claimed and the tasks performed. For example, the descriptions contain references to the proceeding number generally but no further description is provided, such as RE: GCOC 2016 Id the 2016 GCOC. Given the limited amount of information provided, the Commission is unable to determine the nature of the tasks performed, with respect to the review of evidence, IRs, and argument and reply, or how the work performed by Wachowich & Company related to the work performed by the CCA s consultant, Regulatory Services Inc., who provided evidence on behalf of the CCA in the proceeding. 76. In Decision D , which followed the cost claim application in this costs proceeding, the Commission noted similar deficiencies in the CCA s costs claim application submitted by Wachowich & Company, and determined that more detail was required regarding the tasks undertaken and the work performed. The Commission stated: In addition, the costs claim application did not provide detail of the tasks undertaken by Wachowich & Company, or how those tasks related to the work performed by Regulatory Services Inc. As a result, it was difficult for the Commission to assess how the work performed by the legal counsel related to or supported the work performed by the CCA s consultant, Regulatory Services Inc., who both provided support to the CCA as an intervener in the proceeding For the above reasons, the Commission reduces the CCA s claim for Wachowich & Company by 10 per cent, such that the total amount for legal fees approved is $118, The Commission approves the CCA s claim for disbursements for mileage, transcripts and photocopying incurred by Wachowich & Company in the amount of $8, and GST of $6,394.05, as these disbursements are reasonable, necessarily related to the proceeding and are within the Scale of Costs. Based on the foregoing, the total amount approved for Wachowich & Company is $134, Regulatory Services Inc. 79. Regulatory Services Inc., and specifically Mr. Thygesen, was retained by the CCA to perform consulting services in the original proceeding and provide evidence on, among other things, the risk free rate, the introduction of negative interest rates, and whether past returns allowed by the Commission should be accounted for in future GCOC proceedings. 12 Decision D : Direct Energy Regulated Services 2015 Late Payment Penalty Charge Settlement Agreement, Proceeding 21694, October 3, 2016, at paragraphs 37 and Decision D (December 2, 2016) 13

17 80. Mr. Thygesen performed hours of work relating to: preparing an issues list; preparing for and attending pre-hearing meetings and negotiation meetings; preparing IRs; reviewing IR responses; drafting evidence and IR responses; drafting cross-examination questions; preparing for and attending the oral hearing; and assisting legal counsel with drafting oral argument. 81. While the services performed by Regulatory Services were, in general, directly and necessarily related to the CCA s participation in the original proceeding, the Commission finds that the fees claimed for these services are unreasonable because a portion of the evidence submitted by the CCA focused on issues that were not of assistance to the Commission. The particular issue raised by the CCA that was not germane to the application related to the returns historically earned by the utilities. Additionally, the Commission notes that it did not rely on any of Mr. Thygesen s evidence in Decision D Accordingly, the Commission reduces the CCA s claim for consulting fees for Regulatory Services by 15 per cent such that the amount for consulting fees approved is $105, plus GST of $5, for a total of $110, Dustin Madsen Consulting 83. Mr. Madsen of Dustin Madsen Consulting was retained by the CCA to assist with the preparation of an issues list and IRs relating to a proposed equity thickness increase for nontaxable utilities. Mr. Madsen performed hours of work. 84. While the services performed by Dustin Madsen Consulting were directly and necessarily related to the CCA s participation in the original proceeding, the Commission finds that the fees claimed for these services were unreasonable and excessive. Specifically, there was only one CCA IR (AML-CCA-2016MAY13-003) related to the non-taxable issue and Mr. Madsen did not file any evidence on the record of the original proceeding. Nonetheless, Mr. Madsen charged for upwards of 24 hours in relation to this issue. Accordingly, the Commission reduces the CCA s claim for consulting fees for Mr. Madsen by 15 per cent such that the CCA s claim for Dustin Madsen Consulting costs is approved in the amount of $4, plus GST of $ for a total of $4, Total costs awarded 85. For the reasons set out above, the Commission approves the CCA s claim for recovery of costs in the total amount of $249, This amount is composed of legal fees of $118,932.30, consulting fees of $109,987.45, disbursements of $8, and GST of $11, Allocation of intervener costs 86. The CCA was the only intervener group eligible to claim costs under Rule 022 in respect of the original proceeding. The CCA s participation addressed matters of general application to all the utilities who participated actively in the original proceeding. Accordingly, the Commission considers that each of these utilities should bear an equal proportion of the CCA s costs. This allocation method is consistent with the method employed by the Commission in Decision 3597-D Decision D (December 2, 2016)

18 87. Because TransAlta, Lethbridge and Red Deer were not active participants in the original proceeding, the Commission has not allocated costs to these utilities. 88. For the purposes of allocating the CCA s costs in the original proceeding, distribution and transmission units of individual companies have been treated separately. Consequently, the Commission has determined that each of the following entities will bear an equal 1/11 th share of the CCA s costs, equating to $22,705.62: AltaGas AltaLink ATCO Electric (distribution) ATCO Electric (transmission) ATCO Gas ATCO Pipelines ENMAX (distribution) ENMAX (transmission) EPCOR (distribution) EPCOR (transmission) FortisAlberta. 5 Order 89. It is hereby ordered that: 1) AltaGas Utilities Inc. shall pay intervener costs in the amount of $22, ) AltaGas Utilities Inc. shall record in its Deferred Regulatory Costs (Hearing) account, intervener costs in the amount of $22, ) AltaLink Management Ltd. shall pay external costs in the amount of $542, ) AltaLink Management Ltd. shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) AltaLink Management Ltd. shall record in its Hearing Cost Reserve Account, external and intervener costs in the amount of $564, ) ATCO Gas, a division of ATCO Gas and Pipelines Ltd., shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) ATCO Gas, a division of ATCO Gas and Pipelines Ltd., shall record in its Deferred AUC and Intervener Costs account, intervener costs in the amount of $22, ) ATCO Pipelines, a division of ATCO Gas and Pipelines Ltd., shall pay external costs in the amount of $51, ) ATCO Pipelines, a division of ATCO Gas and Pipelines Ltd., shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, Decision D (December 2, 2016) 15

19 10) ATCO Pipelines, a division of ATCO Gas and Pipelines Ltd., shall record in its Reserve for Hearing Costs account, external and intervener costs in the amount of $74, ) ATCO Electric Ltd. (distribution) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) ATCO Electric Ltd. (distribution) shall record in its Intervener Hearing Costs account, intervener costs in the amount of $22, ) ATCO Electric Ltd. (transmission) shall pay external costs in the amount of $273, ) ATCO Electric Ltd. (transmission) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) ATCO Electric Ltd. (transmission) shall record in its Hearing Cost Reserve account, external and intervener costs in the amount of $296, ) ENMAX Power Corporation (transmission) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) ENMAX Power Corporation (transmission) shall record in its Hearing Cost Reserve account, intervener costs in the amount of $22, ) ENMAX Power Corporation (distribution) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) ENMAX Power Corporation (distribution) shall record in its Hearing Cost Reserve account, intervener costs in the amount of $22, ) EPCOR Distribution & Transmission Inc. (distribution) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) EPCOR Distribution & Transmission Inc. (distribution) shall record in its Hearing Cost Reserve Account, intervener costs in the amount of $22, ) EPCOR Distribution & Transmission Inc. (transmission) shall pay external costs in the amount of $192, ) EPCOR Distribution & Transmission Inc. (transmission) shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, ) EPCOR Distribution & Transmission Inc. (transmission) shall record in its Hearing Cost Reserve account, external and intervener costs in the amount of $215, ) FortisAlberta Inc. shall pay intervener costs to the Consumers Coalition of Alberta in the amount of $22, Decision D (December 2, 2016)

20 26) FortisAlberta Inc. shall record in its Hearing Cost Reserve Account, intervener costs in the amount of $22, Dated on December 2, Alberta Utilities Commission (original signed by) Mark Kolesar Vice-Chair (original signed by) Bill Lyttle Commission Member (original signed by) Henry van Egteren Commission Member Decision D (December 2, 2016) 17