ATCO Delivering Over $500 Million in Savings to Albertans: Undeterred by AUC Decision, ATCO Continues to Pursue Efficiency and Affordability for Customers
ATCO is extremely disappointed with yesterday's AUC decision regarding regulatory rules. ATCO believes the AUC is now interpreting the rules differently than previously outlined.
ATCO is the only Utility in Alberta to reduce distribution costs by 8 per cent and continues to drive affordability for Albertans along with regulatory fairness.
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ATCO is the only utility in Alberta to reduce distribution costs during the current five-year regulatory term and supported the PBR (Performance-Based Regulation) framework since its introduction. PBR incentivizes Alberta utilities to reduce costs while maintaining safe and reliable service and then share those cost savings with customers.
ATCO is extremely disappointed with the position announced by the Alberta Utilities Commission (AUC) yesterday.
ATCO has already been granted the right to appeal the AUC PBR 2 Reopener decision, and the matter will be heard in the Alberta Court of Appeal this October.
"ATCO operated within the PBR regulatory framework and is proud of the cost savings we have achieved for customers and for our business under PBR," said Jason Sharpe, Chief Operating Officer of ATCO Energy Systems. "Our employees put the customer at the centre of our business, enabling ATCO to deliver more than $500 million in savings in distribution costs, which customers are already benefitting from over the 2023-2028 period."
"ATCO believes the rules that were established are now being interpreted and administered differently, after the fact," continued Mr. Sharpe. "We will continue to advocate for a regulatory framework that provides certainty for customers and industry alike."
As an energy provider in Alberta for more than 110 years, ATCO remains steadfast in its mission to serve Albertans with integrity and a long-term vision for reliable and affordable energy. ATCO continues to be a leader in advocating for a fair, affordable, and efficient regulatory and business environment in Alberta.
Background on Performance Based Regulation
Rates for electric and gas distribution utilities in Alberta are set under a form of Performance Based Regulation (PBR). PBR is designed to mimic competition and encourage efficiency by providing incentives for the utility to reduce costs, while safeguarding reliability, and minimizing rate increases.
The issue concerns the AUC's position that ATCO was not detailed enough in documenting the specific sources of all the cost savings achieved by its Alberta natural gas and electricity distribution utilities during the previous PBR period of 2018-2022.
The AUC has previously acknowledged that "it is difficult, if not impossible, to identify and separate cost reductions that the ATCO Utilities would have undertaken" in response to the PBR framework from other factors. Yet in the May 2024 PBR2 reopener decision, the AUC claimed that the ATCO Utilities failed to fully quantify or attribute all efficiency gains under PBR to specific programs or initiatives —leading to today's remedy decision. This contradiction underscores the pressing need for regulatory certainty. While the May 2024 PBR2 reopener decision is currently under appeal, ATCO requested that the AUC delay determining any remedy until the appeal is resolved. That request was denied.
From 2023 – 2028 ATCO Gas and ATCO Electric businesses will deliver over $500 million in distribution savings to its Alberta customers, already reducing distribution costs charged to customers by eight per cent. ATCO is the only Alberta utility that delivered natural gas and electricity rate reductions to customers at the end of the PBR2 period. While ATCO disagrees with the remedy decision issued, we remain proud to have already reduced rates for customers through the actions taken.
Distribution rates are the costs of operating the pipes and wires that provide natural gas and electricity to homes and businesses and represent the portion of the utility bill for which ATCO Gas and ATCO Electric are responsible.
About ATCO
As a global enterprise, ATCO Ltd. and its subsidiary and affiliate companies have approximately 21,000 employees and assets of $27 billion. ATCO is committed to future prosperity by working to meet the world's essential energy, housing, security and transportation challenges. ATCO Structures designs, builds and delivers products to service the essential need for housing and shelter around the globe. ATCO Frontec provides operational support services to government, defence and commercial clients. ATCO Energy Systems delivers essential energy for an evolving world through its electricity and natural gas transmission and distribution, and international electricity operations. ATCO EnPower creates sustainable energy solutions in the areas of electricity generation, energy storage, industrial water and cleaner fuels. ATCO Australia develops, builds, owns and operates energy and infrastructure assets. ATCO Energy and Home Services provides retail electricity and natural gas services, home maintenance services and professional home advice that bring exceptional comfort, peace of mind and freedom to homeowners and customers. ATCO also has investments in ports and transportation logistics, the processing and marketing of ash, retail food services and commercial real estate. More information can be found at www.ATCO.com.
Media Inquiries:
Kurt Kadatz
Director, Corporate Communications
[email protected]
587-228-4571
Forward Looking Information Advisory
Certain statements contained in this news release constitute forward-looking information, including, but not limited to, references to reductions in natural gas and electricity distribution rates to be delivered to customers during the regulatory rate period from 2023-2028.
Although we believe that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects beliefs and assumptions with respect to, among other things, the applicability and stability of legal and regulatory requirements; continuing collaboration with certain business partners, and regulatory and environmental groups; the performance of assets and equipment; the ability to meet current project schedules, and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein.
Actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things, risks inherent in the performance of assets; applicable laws and regulations and the interpretation and manner of enforcement of such laws and regulations; changes to government policies; regulatory decisions; competitive factors; evolving market or economic conditions; credit risk; interest rate fluctuations; the availability and cost of labour, materials, services, and infrastructure; future demand for resources; the development and execution of projects; prices of electricity and natural gas; the risk of operational disruptions, outages, or force majeure events; the occurrence of unexpected events such as fires, extreme weather conditions, explosions, blow-outs, equipment failures, transportation incidents, and other accidents or similar events; global pandemics; the imposition of or changes to customs duties, tariffs or other trade restrictions; geopolitical tensions and wars; and other risk factors, many of which are beyond control. Due to the interdependencies and correlation of these factors, the impact of any one material assumption or risk on a forward-looking statement cannot be determined with certainty. Readers are cautioned that the foregoing lists are not exhaustive. For additional information about the principal risks that are faced by the companies, see "Business Risks and Risk Management" in Management's Discussion and Analysis for ATCO Ltd. and Canadian Utilities Limited, respectively, for the year ended December 31, 2024.
Any forward-looking information contained in this news release represents management's expectations as of the date hereof, and is subject to change after such date. The companies disclaim any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.
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