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AltaGas Ltd T.ALA

Alternate Symbol(s):  ATGAF | T.ALA.P.A | ATGFF | T.ALA.P.B | T.ALA.P.G | AGASF | T.ALA.P.H | ATGPF

AltaGas Ltd. is a Canada-based energy infrastructure company that connects natural gas and natural gas liquids (NGLs) to domestic and global markets. The Company’s segments include Utilities and Midstream. Its Utilities segment owns and operates franchised, rate-regulated natural gas distribution and storage utilities, which includes four utilities that operate across five United States jurisdictions. It Utilities segment also includes storage facilities and contracts for interstate natural gas transportation and storage services, as well as the affiliated retail energy marketing business. Its Midstream segment includes global exports, which includes its two LPG export terminals; natural gas gathering and extraction, and fractionation and liquids handling. Its Midstream segment also consists of natural gas and NGL marketing business, domestic logistics, trucking and rail terminals, and liquid storage capability. Its subsidiaries include Wrangler 1 LLC, WGL Holdings, Inc. and others.


TSX:ALA - Post by User

Comment by Capharnaumon Oct 04, 2020 9:23pm
217 Views
Post# 31665179

RE:RE:RE:RE:ALA is a bargain ...

RE:RE:RE:RE:ALA is a bargain ...
JohnSP wrote: @Capharnaum

S
o you are saying they can bank the expenses until it's a more politically acceptable time to raise the gas utility rates than current in middle of Covid?

Also, I read once that any unpaid accounts receivable (ie customers not paying their utility bills) can I assume after a certain time period, be added into the utility rates and recovered. So basically a no  lose, albeit govt contriolled investment rate-of-return.


Under cost of service, the utility is guaranteed a return rate based on "regulated assets". Usually, rates are set to equal operating cost + amortization/depreciation + rate of return. However, some operating costs / amortization / depreciation can be put into a new "reported regulated asset" to be put into future rates. So, Altagas could propose to postpone costs or amortization/depreciation in order to keep lower rates for the next year. Those postponed costs or amortization/depreciation would be put back temporarily into the regulated assets base.

As to bad debt, it goes indeed into operating costs. Usually, in a cost of service model, these extra expenses are put into a regulated assets account to be recovered in later years. In the case of Altagas, these costs might already be taken care of in their COVID-19 regulated account that already got approval earlier in the year for most of their utilities.
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