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Chapter R-4.5 Current as of September 25, 2024 RATE OF LAST RESORT STABILITY ACT

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Note All persons making use of this consolidation are reminded that it has no legislative sanction, that amendments have been embodied for convenience of reference only. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law. Regulations The following is a list of the regulations made under the Rate of Last Resort Stability Act that are filed as Alberta Regulations under the Regulations Act Alta. Reg.

Amendments Rate of Last Resort Stability Act Rate Cap (City of Medicine Hat) ................... 256/2017 ......... 258/2018, 199/2019, 27/2023 Rate of Last Resort Stability .......................... 28/2023 ........... 165/2024

1 RATE OF LAST RESORT STABILITY ACT

Chapter R-4.5 Table of Contents 1

Definitions 2 Imposition of maximum rates 4 . 1 Calculation of deferral amount and interest 4 . 2 Deferral accounts 4 . 3 Loans 4 . 4 Recovery of deferred amounts and interest 5 Operation of the Electric Utilities Act 5 . 1 Reviewing agency powers 5 . 2 Inspection, audits and reporting 5 . 3 Rules and guidelines 5 . 4 Administrative penalties 5 . 5 Immunity 6 Regulations 7 Consequential amendments 7.1 Repeal 8 Coming into force HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Definitions 1 In this Act, (a) “AUC Rule 023” means AUC Rule 023, Rules Respecting Payment of Interest, as published by the Commission and amended from time to time; (a.1) “City of Medicine Hat’s Electric Utility” means the City of Medicine Hat, or a subsidiary of the City of Medicine Hat, in its capacity as the owner and operator of an electric

Section 1

Chapter R-4.5 2 RATE OF LAST RESORT STABILITY ACT distribution system operated in the service area of the City of Medicine Hat; (a.2) “Commission” means the Alberta Utilities Commission established by the Alberta Utilities Commission Act; (a.3) “default (regulated) ra te customer” means a customer included in the definition of customer in the Rate Cap (City of Medicine Hat) Regulation (AR 256/2017) who has not elected the Energy Supply Pricing [Firm] contract option, or the Variable contract option, described in Bylaw No. 2244; (a.4) “deferral amount” in respect of an owner or the City of Medicine Hat’s Electric Utility means the total of the monthly amounts calculated by the owner or the City of Medicine Hat’s Electric Utility under

section 4.1(1) or (2), as the case may be; (a.5) “deferral period” means the period beginning on January 1, 2023, and ending on March 31, 2023; (b) “electric energy charge”, (

i) with respect to an owner, means the electric energy charge required to be shown on the bill of a regulated rate customer under

section 15(

a) of the Rate of Last Resort Regulation, and (ii) with respect to the City of Medicine Hat’s Electric Utility, means, subject to the regulations, the charge for which the City of Medicine Hat’s Electric Utility bills a default (regulated) rate customer that corresponds to the electric energy charge described in subclause (i); (c) “Market Surveillance Admini strator” means the corporation continued by

section 32 of the Alberta Utilities Commission Act; (d) “Minister” means the Minist er determined under

section 16 of the Government Organization Act as the Minister responsible for this Act; (

e) repealed 2024 c8 s6; (f) “owner” means an owner as defined in the Rate of Last Resort Regulation; (f.01) “Rate of Last Resort” m eans a Rate of Last Resort as defined in the Rate of Last Resort Regulation;

Section 2

Chapter R-4.5 3 RATE OF LAST RESORT STABILITY ACT (f.02) “ Rate of Last Resort Regulation” means the Rate of Last Resort Regulation (AR 262/2005); (f.1) “recovery period” means the period beginning on April 1, 2023, and ending on December 31, 2024; (g) “regulated rate customer” means a regulated rate customer as defined in the Rate of Last Resort Regulation; (

h) repealed 2024 c8 s6; (h.1) “reviewing agency” means (

i) the Commission, in respect of an owner whose regulated rate tariff is approved by the Commission pursuant to

section 103(2) of the Electric Utilities Act, and (ii) the Market Surveillance Administrator, in respect of (

A) an owner whose regulated rate tariff is approved by the council of a municipality or the board of directors of a rural electrification association pursuant to

section 103(3) or (4) of the Electric Utilities Act, or (

B) the City of Medicine Hat’s Electric Utility. 2017 cC-2.3 s1;2022 c19 s3;2024 c8 s6 Imposition of maximum rates 2 Notwithstanding any other enactment, during the deferral period (

a) an owner shall determine th e electric energy charge using (

i) the applicable monthly rate per kWh determined in accordance with the owner’s Rate of Last Resort energy price setting plan, or (ii) the rate of 13.5 cents per k Wh if that rate is lower than the rate referred to in subclause (i), a n d (

b) the City of Medicine Hat’s Electric Utility shall determin e the electric energy charge for a default (regulated) rate customer using (

i) the applicable rate per kWh determined in accordance with a method established by the council of the City of Medicine Hat in Bylaw No. 2244, or

Section 4.1

Chapter R-4.5 4 RATE OF LAST RESORT STABILITY ACT (ii) the rate of 13.5 cents per k Wh if that rate is lower than the rate referred to in subclause (i). 2017 cC-2.3 s2;2022 c19 s3;2024 c8 s6 3 and 4 Repealed 2022 c19 s3. Calculation of deferral amount and interest 4.1(1) For each calendar month in the deferral period in which the applicable monthly rate per kWh determined by an owner under

section 2(a)(

i) is higher than the rate set out in

section 2(a)(ii), the owner shall calculate the monthly amount by multiplying the difference between the 2 rates by the total number of kilowatt hours of electric energy provided by the owner to the owner’s regulated rate customers in that calendar month.

(2) For each calendar month in the deferral period in which the applicable monthly rate per kWh determined by the City of Medicine Hat’s Electric Utility under

section 2(b)(

i) is higher than the rate set out in

section 2(b)(ii), the City of Medicine Hat’s Electric Utility shall calculate the monthly amount by multiplying the difference between the 2 rates by the total number of kilowatt hours of electric energy provided by the City of Medicine Hat’s Electric Utility to its default (regulated) rate customers in that calendar month.

(3) An owner shall calculate the owner’s total deferral amount for the deferral period by adding each monthly amount calculated under subsection (1).

(4) The City of Medicine Hat’s Electric Utility shall calculate its total deferral amount for the deferral period by adding each monthly amount calculated under subsection (2).

(5) Subject to

section 4.3(3), an owner and the City of Medicine Hat’s Electric Utility may calculate interest on the deferral amount that is outstanding after June 30, 2023, in accordance with

section 3(3) of AUC Rule 023.

(6) The Commission may not make a direction under

section 3(3) of AUC Rule 023 in respect of interest under this Act. 2022 c19 s3 Deferral accounts 4.2(1) Notwithstanding anything to the contrary in the Rate of Last Resort Regulation, an owner shall establish a deferral account with the approval of the owner’s reviewing agency on or before December 23, 2022, for the purposes of administering the recovery

Section 4.3

Chapter R-4.5 5 RATE OF LAST RESORT STABILITY ACT of the deferral amount in the recovery period, with interest calculated in accordance with

section 4.1(5).

(2) The City of Medicine Hat’s Electric Utility shall establish a deferral account with the approval of its reviewing agency on or before December 23, 2022, for the purposes of administering the recovery of the deferral amount in the recovery period, with interest calculated in accordance with

section 4.1(5).

(3) A deferral account approved under this

section shall be used only (

a) for the purposes of this Act, and (

b) during the recovery period. 2022 c19 s3;2024 c8 s6 Loans 4.3(1) The Minister may make loans to owners and the City of Medicine Hat’s Electric Utility on any terms or conditions the Minister considers desirable for the purposes of implementing the objectives of this Act.

(2) Section 42.1 of the Financial Administration Act does not apply to loans made under this Act.

(3) An owner and the City of Medicine Hat’s Electric Utility may not calculate interest on its deferral amount under

section 4.1(5) if it has received a loan under this section. 2022 c19 s3 Recovery of deferred amounts and interest 4.4(1) An owner and the City of Medicine Hat’s Electric Utility may recover a deferral amount and the interest calculated under

section 4.1(5) in instalments over the recovery period.

(2) Not less than 5 business days prior to the commencement of each calendar month in the recovery period, each owner and the City of Medicine Hat’s Electric Utility shall apply to its reviewing agency for approval to recover an instalment referred to in subsection (1) in that calendar month.

(3) An application by an owner or the City of Medicine Hat’s Electric Utility must be made in the form and manner required by its reviewing agency and include (

a) the owner’s or the City of Medicine Hat’s Electric Utility ’s calculations under

section 4.1 and this section,

Section 5

Chapter R-4.5 6 RATE OF LAST RESORT STABILITY ACT (

b) information setting out whether calculations were based on estimated or actual values, and (

c) any other information required by the reviewing agency.

(4) The reviewing agency shall approve an application by an owner or the City of Medicine Hat’s Electric Utility in respect of a calendar month if the reviewing agency is satisfied that (

a) the calculations in the application are accurate, and (

b) the total amount will be rec overed in instalments over the recovery period in such a manner that there will be no amounts to be recovered after December 31, 2024.

(5) If the reviewing agency approves an owner’s application, the owner shall increase the electric energy charge on the bills sent to the owner’s regulated rate customers for that calendar month by the amount that will be sufficient to recover the instalment.

(6) If the reviewing agency approves an application from the City of Medicine Hat’s Electric Utility, the City of Medicine Hat’s Electric Utility shall increase the electric energy charge on the bills sent to its default (regulated) rate customers for that calendar month by the amount that will be sufficient to recover the instalment. 2022 c19 s3 Operation of the Electric Utilities Act 5 Nothing in this Act or the regulations affects the operation of the Electric Utilities Act or the regulations under that Act except to provide for maximum rates that may be charged to regulated rate customers or to certain customers of the City of Medicine Hat’s Electric Utility during the deferral period, to provide owners and the City of Medicine Hat’s Electric Utility with the ability to recover deferral amounts, with interest, in the recovery period and to permit owners and the City of Medicine Hat’s Electric Utility to maintain deferral accounts for this purpose, and in particular, without limiting the generality of the foregoing, (

a) nothing in this Act or th e regulations affects the duties of owners of electric distribution systems under

section 103 of the Electric Utilities Act, including the duty of owners to prepare regulated rate tariffs for the purpose of recovering the prudent costs of providing electricity services to eligible customers, and (

b) nothing in this Act or the regulations is intended to affe ct a Rate of Last Resort energy price setting plan approved as

Section 5.1

Chapter R-4.5 7 RATE OF LAST RESORT STABILITY ACT part of an owner’s regulated rate tariff in accordance with the Rate of Last Resort Regulation, whether approved before or after the coming into force of this section. 2017 cC-2.3 s5;2022 c19 s3;2024 c8 s6 Reviewing agency powers 5.1 A reviewing agency may do all things that are necessary for or incidental to the exercise of its powers and the performance of its duties and functions under this Act. 2022 c19 s3 Inspection, audits and reporting 5.2(1) An owner and the City of Medicine Hat’s Electric Utility shall make available for inspection by its reviewing agency all records and documents related to its estimates and calculations under this Act.

(2) A reviewing agency may review and audit the records and documents of an owner or the City of Medicine Hat’s Electric Utility to ensure that applications and calculations made by the owner or the City of Medicine Hat’s Electric Utility under this Act are correct.

(3) Commencing January 1, 2023, and continuing until the end of the recovery period, each reviewing agency shall provide a report to the Minister on the first day of each month setting out the following for each owner: (

a) the status of the owner’s deferral account; (

b) the amount the owner has recovered pursuant to

section 4.4 ; (

c) the interest referred to in

section 4.1(5) that has accumu lated on the deferred amounts; (

d) any other information required by the Minister.

(4) Commencing January 1, 2023, and continuing until the end of the recovery period, the Market Surveillance Administrator shall provide a report to the Minister on the first day of each month setting out the following for the City of Medicine Hat’s Electric Utility: (

a) the status of the City of Medicine Hat’s Electric Utility’ s deferral account; (

b) the amount the City of Me dicine Hat’s Electric Utility has recovered pursuant to

section 4.4;

Section 5.3

Chapter R-4.5 8 RATE OF LAST RESORT STABILITY ACT (

c) the interest referred to in

section 4.1(5) that has accumu lated on the deferred amounts; (

d) any other information required by the Minister. 2022 c19 s3 Rules and guidelines 5.3(1) The Commission may make rules applicable to owners whose regulated rate tariff is approved by the Commission pursuant to

section 103(2) of the Electric Utilities Act respecting (

a) reviews, verification, appr ovals and audits related to the recovery of deferred amounts and interest under

section 4.4, (

b) filing and reporting requirements related to the deferral period and the recovery period, (

c) owners’ duties to keep records and accounts related to deferral accounts, (

d) owners’ duties to keep records and accounts related to estimates, calculations and amounts under sections 4.1 and 4.4, and (

e) any other matter necessary for the administration of this Act.

(2) The Market Surveillance Administrator may make guidelines applicable to the City of Medicine Hat’s Electric Utility and owners whose regulated rate tariff is approved by the council of a municipality or the board of directors of a rural electrification association pursuant to

section 103(3) or (4) of the Electric Utilities Act respecting (

a) reviews, verification, appr ovals and audits related to the recovery of deferred amounts and interest under

section 4.4, (

b) filing and reporting requirements related to the deferral period and the recovery period, (

c) the City of Medicine Hat’s Electric Utility’s and the owne rs’ duties to keep records and accounts related to deferral accounts, (

d) the City of Medicine Hat’s Electric Utility’s and the owne rs’ duties to keep records and accounts related to estimates, calculations and amounts under sections 4.1 and 4.4, and (

e) any other matter necessary for the administration of this Act. 2022 c19 s3

Section 5.4

Chapter R-4.5 9 RATE OF LAST RESORT STABILITY ACT Administrative penalties 5.4 If the Commission, after a hearing or other proceeding, determines that an owner has contravened or failed to comply with any provision of this Act, an order of the Commission under this Act or a Commission rule under this Act, the Commission may deal with the contravention or failure to comply in accordance with

Part 6 of the Alberta Utilities Commission Act. 2022 c19 s3 Immunity 5.5 No action may be brought against the Crown claiming compensation for any real or perceived loss or damage resulting from the coming into force or the implementation of this Act or amendments to this Act or any regulations made or purported to be made under this Act. 2022 c19 s3 Regulations 6(1) The Minister may make regulations (

a) defining any word or expression used but not defined in th is Act and further defining or redefining “electric energy charge” for the purposes of

section 1(b)(ii); (a.1) respecting deferral accounts; (a.2) respecting the recovery of deferred amounts; (a.3) respecting the calculati ons of estimates, actuals, monthly amounts, deferral amounts, interest, instalments and residual amounts, including how amounts calculated based on estimated values are corrected; (a.4) respecting loans, loan agreements and loan repayment programs; (

b) repealed 2022 c19 s3; (

c) specifying a date and sp ecifying rate classes for the purposes of

section 2 and determining or providing for mechanisms for determining the rate per kWh that applies to the City of Medicine Hat’s Electric Utility or to a particular rate class of the City of Medicine Hat’s Electric Utility for the purposes of

section 2(b); (

d) respecting the making of any payments to owners or the City of Medicine Hat’s Electric Utility;

Section 7.1

Chapter R-4.5 10 RATE OF LAST RESORT STABILITY ACT (d.1) respecting adjustments to and extensions of the recovery period where the reasonable recovery of the deferral amount requires an adjustment or extension to the recovery period; (

e) respecting information, including personal information of customers, to be provided by owners and the City of Medicine Hat’s Electric Utility to reviewing agencies for the purposes of this Act; (

f) adding to, clarifying, lim iting or restricting any powers, duties or functions of the Commission or the Market Surveillance Administrator as the Minister considers necessary or advisable to enable the Commission or the Market Surveillance Administrator to exercise powers, duties or functions for the purposes of this Act; (

g) respecting any matter or thi ng that the Minister considers necessary to carry out the purposes of this Act.

(2) Regulations under

section 6(1)(

d) and (d.1) may be specific or general in their application.

(3) Repealed 2022 c19 s3. 2017 cC-2.3 s6;2019 c19 s3 7 (This

section amends other Acts; the amendments have been incorporated into those Acts.) Repeal 7.1 This Act is repealed on Proclamation. 2019 c18 s5 Coming into force 8 Sections 2(2), 3 and 6(1)(

c) and (d)(iii) come into force on Proclamation. (NOTE:

Section 2(2) proclaimed in force July 12, 2017. Sections 3 and 6(1)(

c) and (d)(iii) proclaimed in force January 1, 2018.)

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