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Decision 20761-D01-2015
EPCOR Distribution and Transmission Inc. 2015-2017 Transmission Facility Owner Tariff Costs Award December 22, 2015
The Alberta Utilities Commission
Decision 20761-D01-2015: EPCOR Distribution and Transmission Inc.
2015-2017 Transmission Facility Owner Tariff
Costs Award
Proceeding 20761
December 22, 2015
Published by
Alberta Utilities Commission
Fifth Avenue Place, Fourth Floor, 425 First Street S.W.
Calgary, Alberta
T2P 3L8
Telephone: 403-592-8845
Fax: 403-592-4406
Website: www.auc.ab.ca
Decision 20761-D01-2015 (December 22, 2015) • i
Contents
1 Introduction ........................................................................................................................... 1
2 Commission’s authority to award costs .............................................................................. 2
3 Commission findings – assessment of costs claimed .......................................................... 2 3.1 EPCOR Distribution & Transmission Inc. ..................................................................... 2
3.1.1 Fasken Martineau DuMoulin LLP .................................................................... 3 3.1.2 Dr. David Ryan and Ms. Donna White ............................................................. 4 3.1.3 Economic Research Associates Ltd. ................................................................. 4 3.1.4 Quanta Technology LLC .................................................................................. 5
3.1.5 Towers Watson ................................................................................................. 5 3.1.6 EDTI disbursements.......................................................................................... 6
3.2 Consumers’ Coalition of Alberta ................................................................................... 6 3.2.1 Wachowich & Company ................................................................................... 6 3.2.2 Regulatory Services Inc. ................................................................................... 7
4 GST ......................................................................................................................................... 8
5 Order ...................................................................................................................................... 9
Decision 20761-D01-2015 (December 22, 2015) • 1
Alberta Utilities Commission
Calgary, Alberta
EPCOR Distribution & Transmission Inc.
2015-2017 Transmission Facility Owner Tariff Decision 20761-D01-2015
Costs Award Proceeding 20761
1 Introduction
1. On November 25, 2014, EPCOR Distribution & Transmission Inc. (EDTI) filed a general
tariff application with the Alberta Utilities Commission for various approvals associated with its
transmission facility owner (TFO) function for the 2015, 2016 and 2017 test period (general
tariff application). The Commission assigned Proceeding 3539 and Application 1611027-1 to the
general tariff application. EDTI requested approval of its transmission rates, terms and
conditions of service and reserve and deferral accounts.
2. On November 27, 2014, the Commission issued a notice of application and requested
interested parties who wished to participate in the proceeding to submit a statement of intent to
participate (SIP) by December 11, 2014. The Commission received SIPs from the Alberta
Electric System Operator, AltaLink Management Ltd., ATCO Electric Ltd. - Transmission
Division, the Consumers’ Coalition of Alberta (CCA) and the Office of the Utilities Consumer
Advocate.
3. The Commission established a process schedule for dealing with the general tariff
application, which included the filing of information requests (IRs), IR responses, rebuttal
evidence, an oral hearing, argument and reply argument. The oral hearing was conducted from
June 10, 2015 to June 18, 2015.
4. The Commission considered the record with respect to the proceeding closed on July 23,
2015, the deadline date for filing reply argument.
5. In an August 20, 2015 letter, the CCA requested an extension to file its costs claim
application from August 22, 2015 to September 8, 2015.
6. On August 21, 2015, EDTI submitted its costs claim application to the Commission. The
Commission assigned Proceeding 20761 and Application 20761-A001 to the costs claim
application.
7. By way of an August 24, 2015 letter, the Commission granted the CCA’s request for an
extension and directed the CCA to file its costs claim application by September 8, 2015.
8. On September 8, 2015, the CCA submitted its costs claim application to the Commission.
In Proceeding 20761, the Commission assigned Application 20761-A002 to the CCA’s costs
claim application.
9. The Commission circulated a summary of costs claimed to interested parties on
September 11, 2015, and requested comments regarding the figures listed in the summary, or on
the merits of the costs claimed, by September 24, 2015.
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
2 • Decision 20761-D01-2015 (December 22, 2015)
10. On September 24, 2015, EDTI submitted a revised costs claim application to reflect an
adjustment to the amounts claimed for a Towers Watson report, called the BENVAL report. The
amount was adjusted from 100 per cent to 50 per cent because the report related to both the
general tariff application and another proceeding before the Commission.1
11. A revised summary of the costs claimed and request for comments was circulated by the
Commission on September 25, 2015. The Commission requested comments regarding the figures
listed in the revised summary, or on the merits of the amended costs claimed on or before
October 8, 2015. No comments were received from parties.
12. The Commission considers the close of record for this costs claim proceeding to be
October 8, 2015.
13. On October 21, 2015, the Commission issued Decision 3539-D01-20152 with respect to
the general tariff application.
2 Commission’s authority to award costs
14. When assessing costs claims pursuant to Section 21 of the Alberta Utilities Commission
Act, SA 2007, c. A-37.2, the Commission applies AUC Rule 022: Rules on Intervener Costs in
Utility Rate Proceedings (Rule 022). Appendix A of Rule 022 also prescribes a Scale of Costs
applicable to all costs claimed.
15. In exercising its discretion to award costs, the Commission will, in accordance with
Section 11 of Rule 022, consider whether an eligible participant’s costs are reasonable and
directly and necessarily related to the proceeding; and whether the eligible participant acted
responsibly in the proceeding and contributed to a better understanding of the issues before the
Commission. The Commission will be mindful of a participant’s willingness to co-operate with
the Commission and other participants to promote an efficient and cost-effective proceeding.
16. As the costs of a utility proceeding are generally passed on to customers, it is the
Commission’s duty to ensure that the customers receive fair value for a party’s contribution. The
Commission only approves those costs that are reasonable and directly and necessarily related to
the party’s participation in the proceeding.
3 Commission findings – assessment of costs claimed
3.1 EPCOR Distribution & Transmission Inc.
17. EDTI submitted a costs claim in the total amount of $563,430.99. The costs claim
requested approval of the following costs:
$395,707.20 for Fasken Martineau DuMoulin LLP (Fasken Martineau), which
includes legal fees of $391,672.00 and disbursements of $4,035.20.
1 Proceeding 20633, Application 20633-A001, EPCOR Energy Alberta (GP) Inc.’s 2016-2017 Regulated Rate
Tariff Application. 2 Decision 3539-D01-2015: EPCOR Distribution & Transmission Inc. 2015-2017 Transmission Facility Owner
Tariff, Proceeding 3539, Application 1611027-1, October 21, 2015.
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
Decision 20761-D01-2015 (December 22, 2015) • 3
$9,735.00 for consulting services for Dr. David Ryan and Ms. Donna White, which
includes $8,600.00 in consulting fees, and disbursements of $1,135.00.
$34,358.93 for consulting services for Dr. Robert Evans of Economic Research
Associates Ltd., which includes consulting fees of $32,940.00 and disbursements of
$1,418.93.
$44,595.88 for Quanta Technology, which includes $35,702.18 in consulting fees and
disbursements of $8,893.70.
$69,805.73 for Towers Watson, which includes consulting fees of $55,592.50 and
disbursements of $14,213.23.
$9,228.25 for EDTI’s disbursements for transcript costs.
3.1.1 Fasken Martineau DuMoulin LLP
18. The costs claim for Fasken Martineau relates to 1,180.20 hours of legal services
performed by Mr. Jonathan Liteplo, Mr. Christopher Bystrom and Ms. Hannah Roskey. The
hours claimed consisted of 737.10 hours for preparation, 157.20 hours in attendance at the oral
hearing and 285.90 hours related to argument and reply argument. The duties performed by the
three legal counsel related to:
providing regulatory and legal advice relating to the general rate application.
assisting EDTI to ensure that legal and regulatory requirements of the application
were appropriately addressed.
providing strategy advice and assisting EDTI in evaluating potential approaches to
addressing legal issues with respect to the general rate application.
serving as a regulatory law resource for EDTI’s external consultants.
reviewing and providing advice on the narrative portions of the EDTI’s application
and attachments for EDTI to meet its evidentiary onus.
providing advice and assistance in the preparation of IR responses, IRs on
interveners’ evidence, and rebuttal evidence.
preparing for, and attendance at, the oral hearing.
preparing argument, reviewing interveners’ arguments, and preparing reply argument.
19. The Commission has assessed the costs claim for legal services provided by Fasken
Martineau and the costs claimed are in accordance with the Scale of Costs. Two senior counsel
charged 1,177.40 of the 1,180.20 hours claimed. They spent 734.30 hours for preparation, 157.20
hours for attendance and 285.90 hours for argument and reply argument. The Commission
considers the hours incurred are not commensurate with the tasks performed by counsel for
preparation, argument and reply argument. Although the Commission considers that one or more
external counsel may be required for review and revision of the general tariff application and the
appendices, the number of hours spent by senior counsel on these activities is significant, and for
certain activities was duplicative i.e. activities related to the review of the application, business
cases and information requests.
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
4 • Decision 20761-D01-2015 (December 22, 2015)
20. In light of these findings, the Commission finds that a reduction of 15 per cent is
warranted with respect to the legal fees claimed for Fasken Martineau. The Commission
approves legal fees in the total amount of $332,921.20.
21. The Commission has also reviewed the disbursements claimed for accommodation,
courier fees, photocopying and binding, and taxi charges and the fees claimed are in accordance
with the Scale of Costs. The Commission finds that the disbursements were reasonably incurred
by Fasken Martineau related to legal counsel’s involvement in the proceeding.
22. Accordingly, the Commission approves recovery of EDTI’s costs claim for legal services
in the total amount of $336,956.40, which is composed of $332,921.20 in legal fees and
$4,035.20 in disbursements.
3.1.2 Dr. David Ryan and Ms. Donna White
23. The costs claim includes fees, in the amount of $8,600.00, and relates to 43.00 hours of
consulting services by Dr. David Ryan and Ms. Donna White. The hours claimed include 28.00
hours for preparation of evidence, 13.00 hours for attendance at the oral hearing and two hours
for argument and reply argument. The consulting hours claimed are for work performed in
preparing evidence related to the 2015-2017 forecast cost escalators, which EDTI used in support
of its general tariff application. A disbursement of $1,135.00 was claimed for data acquisition
from The Conference Board of Canada.
24. The Commission has assessed the costs claim for consulting services provided by Dr.
Ryan and Ms. White and finds that the tasks described and hours claimed are reasonable, directly
and necessarily related to the proceeding and are in accordance with the Scale of Costs. The
Commission also approves the costs claim related to the disbursement for data acquisition from
The Conference Board of Canada as reasonable and in accordance with the Scale of Costs. The
disbursement was reasonably incurred in the preparation of evidence in support of EDTI’s
application.
25. Accordingly, the Commission approves recovery of costs for Dr. Ryan and Ms. White in
the total amount of $9,735.00, which is composed of $8,600.00 in consulting fees and $1,135.00
in disbursements.
3.1.3 Economic Research Associates Ltd.
26. The costs claimed for Economic Research Associates, in the amount of $32,940.00,
relates to 122.00 hours of consulting services performed by Dr. Robert Evans. The hours claimed
include 92.50 hours for review and preparation of information requests and preparation of
evidence for the hearing, 2.50 hours for attendance at the oral hearing and 27.00 hours for
drafting the argument and reply argument. Dr. Evans provided evidence on the estimated
forecast cost of new debt for EDTI’s transmission operations in the test years, provided evidence
on forward curve debt costs and made recommendations in respect of whether the forecast cost
of debt or forward curve should be used. Disbursements of $1,418.93 were claimed for accessing
Consensus Forecast survey data, accommodation, mileage, and photocopying.
27. The Commission has assessed the costs claim for consulting services performed by Dr.
Evans and finds that the tasks described and hours claimed are reasonable, directly and
necessarily related to the proceeding and are in accordance with the Scale of Costs. The
Commission also finds the disbursements claimed by Dr. Evans for accessing Consensus
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
Decision 20761-D01-2015 (December 22, 2015) • 5
Forecast survey data, accommodation, mileage, and photocopying to be reasonable for his
participation in the proceeding and the disbursements are in accordance with the Scale of Costs.
28. Accordingly, the Commission approves recovery of costs for Economic Research
Associates in the total amount of $34,358.93, which is composed of $32,940.00 in consultant
fees and $1,418.93 in disbursements.
3.1.4 Quanta Technology LLC
29. The costs claim for Quanta Technology LLC, in the amount of $35,702.18, relates to
141.65 hours of consulting services performed by Mr. Bill Snyder, Mr. John Spare, Mr. John
Widdifield, and Mr. Gerry Sheerin. Quanta had previously conducted a detailed engineering
review of EDTI’s transmission infrastructure assets and authored reports related to the review of
transmission infrastructure assets. The hours claimed include 95.65 hours for preparation, which
included responding to IRs on the previously authored reports and preparing for the oral hearing.
An additional 46.00 hours was claimed for attendance at the oral hearing.
30. The Commission has assessed the costs claim for consulting services provided by Quanta
Technology LLC and finds that the tasks described and hours claimed are reasonable, directly
and necessarily related to the proceeding and are in accordance with the Scale of Costs. The
Commission also finds the disbursements claimed are related to each of the individual
consultant’s involvement in the proceeding. The disbursements for accommodation, airfare,
parking, and taxi charges are reasonable and in accordance with the Scale of Costs.
31. Accordingly, the Commission approves recovery of costs for Quanta Technology LLC in
the total amount of $44,595.88, which is composed of $35,702.18 in consulting fees and
$8,893.70 in disbursements.
3.1.5 Towers Watson
32. The costs claimed for Towers Watson, in the amount of $55,592.50, is based on 331.25
hours for consulting services related to EDTI’s non-union salary escalators and total
compensation. The hours claimed included 323.25 hours for the preparation of two reports:
“Memorandum on Non-Union Salary Escalation Factors for 2015 and 2016,” and “2014
Competitive Compensation and Benefits Analysis.” The latter report was referred to as the total
compensation report. The tasks performed related to the two reports included analyzing data,
reviewing documents, reviewing the BENVAL analysis report, drafting correspondence and
attending to conference calls, drafting reports, reviewing the draft reports, preparing draft
responses to IRs and reviewing rebuttal evidence. An additional 8.00 hours was claimed for
attendance at the oral hearing.
33. The Commission has assessed the costs claim for consulting services performed by
Towers Watson and finds that the tasks described and hours claimed are reasonable, directly and
necessarily related to the proceeding and are in accordance with the Scale of Costs.
34. The costs claim for Towers Watson included disbursements in the amount of $14,213.23.
Of the amount claimed, $11,425.00 was claimed for the BENVAL report, which was used in
preparation of the total compensation report. EDTI’s costs claimed are 50 per cent of the
$22,850.00 total costs for the BENVAL report because the report was also used by EPCOR
Energy Alberta GP Inc. in Proceeding 20633. The remaining balance for disbursements includes
costs related to accommodation, airfare, Capital IQ™ data access charges, meals, and taxi
charges. The disbursements claimed are in accordance with the Scale of Costs. The
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
6 • Decision 20761-D01-2015 (December 22, 2015)
disbursements incurred relate to Towers Watson’s involvement in the proceeding and are
reasonable.
35. Accordingly, the Commission approves recovery of costs for Towers Watson in the total
amount of $69,805.73, which is composed of $55,592.50 in consulting fees, and $14,213.23 in
disbursements.
3.1.6 EDTI disbursements
36. EDTI claimed disbursements in the total amount of $9,228.25. The amounts claimed
consist of $5,733.25 for transcript services from AMICUS Reporting Group Ltd. and additional
transcript costs of $3,495.00 for Realtime Streaming and Realtime Connection.
37. In assessment of the costs claimed for transcript services from AMICUS Reporting
Group Ltd., the Commission finds the $5,733.25 in transcript costs were incurred related to
EDTI’s involvement in the oral hearing and these costs are in accordance with the Scale of Costs.
38. With respect to the disbursements for Realtime Streaming and Realtime Connection, the
Commission has determined that these costs are not reasonable and directly and necessarily
related to EDTI’s participation in the hearing. A live feed of the public hearing is available
through the Commission’s website in addition to the daily hearing transcript service available
through AMICUS Reporting Group, which was purchased by EDTI. The Commission considers
that the live feed available on the Commission’s website and the transcript services should have
provided adequate support for EDTI’s staff and the witness panel to respond to undertakings and
perform other activities related to the hearing. The Commission will, therefore, allow $5,733.25
for daily transcript fees but denies the additional disbursements of $3,495.00 for Realtime
Streaming and Realtime Connection.
39. Accordingly, the Commission approves EDTI’s disbursements for transcripts in the
amount of $5,733.25.
EDTI’s total costs awarded
40. In accordance with the above findings, the Commission approves recovery of costs for
EDTI in the total amount of $501,185.19, which includes $332,921.20 in legal fees, $132,834.68
in consulting fees and $35,429.31 in disbursements.
3.2 Consumers’ Coalition of Alberta
41. The CCA submitted a costs claim for recovery of costs paid in the total amount of
$149,422.40. The costs claim requested approval of the following legal and consulting costs:
$55,246.54 for Wachowich & Company, composed of legal fees of $46,882.50,
disbursements of $5,733.25 and GST of $2,630.79.
$94,175.86 for Regulatory Services Inc., composed of consulting fees of $88,280.00,
disbursements of $1,411.30 and GST of $4,484.56.
3.2.1 Wachowich & Company
42. The claim for Wachowich & Company relates to 133.95 hours of legal services
performed by Mr. James Wachowich. The hours claimed include:
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
Decision 20761-D01-2015 (December 22, 2015) • 7
79.70 hours for review of the general tariff application, review of information
requests, review of the CCA's evidence, drafting and review of correspondence and
preparation of the CCA’s motion for confidential treatment of certain information.
36.20 hours for attendance at the oral hearing.
18.05 hours for preparation of argument and reply argument.
43. Disbursements of $5,733.25 were claimed for transcript costs.
44. The Commission has assessed the costs claim of Wachowich & Company and finds that
the tasks described and hours claimed are reasonable, directly and necessarily related to the
proceeding and are in accordance with the Scale of Costs. The Commission also finds the
disbursements claimed for transcripts to be reasonable and in accordance with the Scale of Costs.
45. The Commission approves the costs claimed for Wachowich & Company in the total
amount of $55,246.54, which is composed of $46,882.50 in legal fees, disbursements of
$5,733.25 and GST of $2,630.79.
3.2.2 Regulatory Services Inc.
46. The claim for Regulatory Services Inc. relates to 345.00 hours for consulting services
provided by Mr. Raj Retnanandan and Mr. Jan Thygesen. The total hours claimed include:
209.25 hours for review of the general tariff application and preparation of information requests,
16.00 hours for attendance at the oral hearing and 119.75 hours for preparation of argument and
reply argument.
47. The costs claim for Mr. Retnanandan included: 169.75 hours for review of the general
tariff application, review of information requests, and review of responses to information
requests, 11.50 hours for attendance at the oral hearing and 62.25 hours for the preparation of
argument and reply argument. Mr. Retnanandan’s hours incurred relate to the following areas of
the application: the test period, the forecast assumptions, the accounting policies, the high level
metrics analysis, the change in capitalization of indirect labour, total compensation and Alberta
Electric System Operator direct assign projects.
48. The costs claim for Mr. Thygesen included: 39.50 hours for review of the general tariff
application and preparation of information requests, 4.50 hours for attendance at the oral hearing
and 57.50 hours for preparation of argument. Mr. Thygesen reviewed the debt rates and use of
the forward curve, corporate costs allocations and shared costs.
49. The Commission has assessed the costs claim for consulting services provided by
Regulatory Services Inc. and finds that the tasks described and hours claimed are reasonable,
directly and necessarily related to the proceeding and are in accordance with the Scale of Costs.
The Commission also finds Mr. Retnanandan’s disbursements claimed for accessing Conference
Board of Canada data, accommodation, airfare, and mileage to be reasonable for his
involvement in the hearing and the disbursements are in accordance with the Scale of Costs. The
amount claimed in the CCA’s “Form U3: Summary of Disbursements Claimed” miscalculated
the amounts of taxi charges supported by receipts. Accordingly, the Commission has adjusted the
costs to reflect the receipt amounts from $68.57 to $75.00, which increases the total
disbursements awarded from $1,411.30 to $1,417.73.
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
8 • Decision 20761-D01-2015 (December 22, 2015)
50. The Commission, therefore, approves recovery of costs for Regulatory Services Inc. in
the amount of $94,182.29, which is composed of $88,280.00 in consulting fees, $1,417.73 in
disbursements, and GST of $4,484.56.
51. Accordingly, the Commission approves recovery of the CCA’s costs claim in the total
amount of $149,428.83, which includes of $46,882.50 in legal fees, $88,280.00 in consulting
fees, $7,150.98 in disbursements and GST of $7,115.35.
4 GST
52. In accordance with the Commission’s treatment of GST on costs awards, EDTI is
required to pay only that portion of GST paid by interveners that may not be recoverable through
the GST credit mechanism. Eligible GST is approved by the Commission in the amount of
$7,115.35.
53. The Commission emphasizes that its treatment of the GST claim in no way relieves
participants or their consultants from their GST obligations pursuant to the Excise Tax Act, RSC
1985, c. E-15.
2015-2017 Transmission Facility Owner Tariff Compliance Filing Costs Award EPCOR Distribution & Transmission Inc.
Decision 20761-D01-2015 (December 22, 2015) • 9
5 Order
54. It is hereby ordered that:
(1) EPCOR Distribution & Transmission Inc. shall pay its external costs in the amount of
$501,185.19.
(2) EPCOR Distribution & Transmission Inc. shall pay intervener costs to the
Consumers’ Coalition of Alberta in the amount of $149,428.83.
(3) EPCOR Distribution & Transmission Inc. shall record the approved costs in the
amount of $650,614.02 in its Hearing Costs Reserve Account.
Dated on December 22, 2015.
The Alberta Utilities Commission
(Original signed by)
Mark Kolesar
Vice-Chair
(Original signed by)
Kay Holgate
Commission Member
(Original signed by)
Kate Coolidge
Acting Commission Member