It takes years to bring a PBR cycle to a successful conclusion. The rates EPCOR can charge are set by the City as regulator, with additional input coming from City Council, the utility and customer feedback.
Capital spending, community growth and the operating programs are considered over multi-year periods. To give a sense of the complexity of this process, the filing for the most recent PBR was 3,000 pages long and the capital program was $1.3 billion. Every dollar EPCOR wants to spend is in the PBR. “And it’s only by approving the collection of revenue from customers through rates that EPCOR gets permission to do those things,” notes Manning.
It’s also important to clarify the incentives at play. EPCOR is penalized if it fails to hit its targets but hitting the targets doesn’t guarantee extra profit. It only means EPCOR gets to keep doing its job. The transparency of the system guarantees that the holistic nature of the process is respected and nurtured. This matters because — balance, remember — EPCOR’s definition of doing a good job is not based solely on profit, but also by serving customers well, while doing its part to look after the planet, and while empowering customers to do their part, too. It’s about making sure the weight of each component helps maintain the balance of the whole.
The PBR process, in other words, is a way for every stakeholder to contribute toward creating a clean, livable and healthy community. The environmental aspect of the PBR process is indicative of this focus, especially as it so perfectly aligns with EPCOR’s broader ESG approach. A good example is the Stormwater Integrated Resource Plan (SIRP)
. This 20-year $1.6 billion plan approved in the latest PBR, the long-term goal being to protect communities from the risk of flooding. There were also dollars included to use green electricity for the water utility in Edmonton as part of an overall plan to ultimately reduce the electricity carbon footprint of those utilities to zero. The PBR process, therefore, is a direct contributor to and driver of EPCOR’s ESG goals.
Everything is connected. The PBR is a complex question asking for a simple answer: does EPCOR do what they say they are going to do, do they do it efficiently, and do they do it with integrity? EPCOR works hard to ensure the answers to those questions are always “yes,” so that future rates will encourage growth and continued success.
It takes people to make all this happen. Public engagement is important to both the LTP and PBR and involves meaningful and regular consultation to make sure EPCOR is delivering value for money and listening to what the community says it needs. As for the employees, the company can have a long-term plan, but without a talented and dedicated workforce, the plan is not worth the paper it’s written on.
“Our vision and mission revolves around four focus areas,” says Kennedy. “At the top of the list is people. We want to find good people and focus on learning and development, professional growth, career development initiatives, the diversity of employee populations, offering strong retirement and succession planning. The second of those four things is growth. The third is operational excellence. And the fourth is community, meaning the customer and the value EPCOR creates for the communities we serve.”