Contingent Loss Factor Claim

Through its Decision 790-D06-2017 (“Decision”), released December 18, 2017, the AUC asserted its position on several matters related to remedy under Module C of Milner Power Inc.’s complaint relating to the AESO Line Loss Rule. The Decision confirms that the new method that was used to calculate 2017 prospective loss factor rates would be used for the retrospective period January 1, 2006 – December 31, 2016. A single settlement approach will be used whereby the Alberta Electric System Operator (“AESO”) will calculate all eleven years before cash is settled. The Decision further confirms that the settlement be effected by reissuing invoices to the original party and that a rider will be applied to transmission rates across the industry to collect any shortfall from the inability to collect from an original party. The Corporation estimates that overpayments of approximately $40 million were made by Milner Power Inc. to the AESO for the period January 1, 2006 – December 31, 2016, based on calculations established using information currently available on public record, before accounting for the time value of money. The Corporation anticipates, based on AESO’s current published timelines, that collection of these prior overpayments and the time value of money component at the Bank of Canada Bank Rate +1.5% will occur in 2019. This timing is subject to successful appeals by counterparties.