What is the role of the AUC in setting natural gas rates?
TheAUC regulates investor-owned natural gas utilities in Alberta, ensuring that the rates consumers pay are just and reasonable and that the service provided is safe and adequate. The AUC is also required to regulate these utilities in ways that allow them to earn sufficient revenues to recover their costs, which includes a fair return on their investments. Therefore, in setting rates the AUC must balance the needs of consumers, along with the needs of utility companies. A utility company must apply to the AUC on a regular basis for approval of its distribution rates. Distribution costs are approved either through General Rate Applications, a thorough review which involves many financial aspects of the company, or through a negotiated settlement process. Gas supply costs are dealt with as a separate component but are also approved by the AUC.Utilities are not allowed to make a profit on the supply cost of gas. It is a flow-through cost that is passed on to consumers.
