Regulator orders refund after rejecting ATCO's request to delay decision pending court appeal
ATCO Ltd. has been ordered to refund $71m to customers.
The Alberta Utilities Commission (AUC) ruled the utility failed to properly attribute $500m in distribution savings under the province’s performance-based regulation (PBR) framework, according to The Globe and Mail.
The AUC stated that ATCO’s 2021–2022 rates were “not just and reasonable” and found that many of the claimed savings stemmed from operational decisions, such as forgoing capital projects, rather than from documented initiatives as required under PBR rules.
The commission ruled that the company’s savings could not be clearly linked to specific projects or programs, leading to a refund split between $35m for ATCO Electric and $36m for ATCO Gas customers.
That refund will be issued over six months starting in September.
According to ATCO’s May 29 press release, the company expressed disappointment with the AUC’s ruling and claimed that the commission is retroactively interpreting the rules.
“ATCO believes the rules that were established are now being interpreted and administered differently, after the fact,” said Jason Sharpe, chief operating officer of ATCO Energy Systems.
ATCO stated that it is the only utility in Alberta to reduce distribution costs during the current regulatory period and highlighted that customers are already benefitting from over $500m in savings between 2023 and 2028.
The company added that these efforts have reduced distribution costs by 8 percent.
The dispute over cost attribution has already led to an appeal, with the Alberta Court of Appeal scheduled to hear the case in October.
According to CEO Nancy Southern, ATCO believes it was operating within the regulatory framework and has challenged the AUC’s position.
The company had asked the commission to delay the refund decision until after the appeal, but the AUC denied that request.
Sharpe stated that the refund timeline may cause confusion if the court later finds in ATCO’s favour.
He said the refund was premature, in his opinion, as the full appeal process had not yet concluded, and noted that several deferral requests were rejected, according to The Globe and Mail.
The PBR model used in Alberta is designed to mimic competition by incentivizing utilities to lower costs while maintaining reliability.
These savings are then partially returned to customers.
According to ATCO’s press release, the AUC had previously acknowledged that it is “difficult, if not impossible” to distinguish which cost reductions stem directly from the PBR framework.
However, in its May 2024 decision, the commission still faulted ATCO for not quantifying its efficiency gains in line with program-specific requirements.
Paul Barry, executive director of the Industrial Power Consumers Association of Alberta, told The Globe and Mail that his group had sought nearly $100m in refunds from ATCO Electric alone.
He said the commission’s decision still sets a precedent and clearly shows the commission is seeking to hold utilities accountable.
This latest refund order follows a separate 2022 AUC decision, in which ATCO was fined $31m for overpaying a First Nation contractor and not disclosing the reasoning when seeking ratepayer reimbursement.
Sharpe described the current case as “very different,” clarifying that it is a refund rather than a penalty, and stems from differing views on rule application.
