The Government of Alberta has announced the Natural Gas Rebate Program from October 1st, 2022 to March 31st, 2023 to provide rebates to consumers if natural gas prices exceed $6.50/GJ. This program is enabled through the Utility Commodity Rebate Act, and the corresponding Utility Commodity Rebate Regulation, in particular Parts 2, 3 and 4 of the regulation. To be eligible, consumers must annually consume less than 2,500 GJ per site. As part of this new program, consumers of other heating fuels (non-connected gas, propane, kerosene, and heating oil) are also eligible, to a maximum monthly amount equivalent to 417 GJ (which equates to 2,500 GJ divided by 6 months, the total length of the rebate period). Alberta previously had a rebate program for natural gas and other fuels that operated from 2003 to 2009, which was administered by a third party contractor.
Administering the rebate program requires expertise and resources from a third-party contractor (henceforth addressed as the Contractor). The Contractor and its resources will be used to work with over 50 competitive retailers and the two default gas suppliers to ensure that funds are disbursed when the $6.50/GJ price is triggered during eligible months, with the intent of providing rebates onto the bills of an estimated 1.5 million natural gas consumers in Alberta. The Government would provide direct deposit to the applicant for the purpose of this program, rather than through the Contractor. In addition, it is expected that tens of thousands of rural customers on other heating fuels (an estimated 25,000, more or less, may be eligible) will also submit applications with supporting documents (receipts, invoices) manually to receive the rebates.
The program has two key expected outcomes: (1) default gas suppliers and competitive retailers receive rebate funds quickly so they can process rebates to eligible consumers in an accurate, efficient manner within the month of receiving the application; (2) eligible consumers of other heating fuels have their applications for rebates processed quickly following the submission of valid proofs of purchase and other appropriate documentation via a simple, effective, and straightforward application process constructed by the Contractor to ensure rebates are paid in a timely fashion.
The Contractor selected to administer this program would be responsible for two components: (1) managing applications from retailers and default gas suppliers and (2) processing applications received from those using other heating fuels.
For the first component, the Contractor and affiliated personnel will: work with the Province to finalize a program guideline document and to establish relevant forms for the program; to develop workflows and procedures on how the applications will be reviewed and processed, along with how to review and recommend rebate payments to the Province in response to the applications submitted (the procedures must demonstrate that appropriate internal control of the process and record-keeping are in place); and to develop relevant resource-tracking and monitoring spreadsheets. The guideline document, forms, internal processes, and monitoring spreadsheets must be acceptable to the Province. Following the Province’s approval of these, the Contractor must ensure readiness to process applications over the rebate period.
The second component would entail designing a separate rebate application for users of other heating fuels, which includes the Contractor playing a lead role in reviewing and verifying rebate amounts for such fuels, and developing any necessary IT systems and program application details to be user-friendly for the public. It is expected that the Contractor will develop and provide status-update reports to the Province with a monthly update, at a minimum, at the end of each month of the rebate period, see Appendix B for details on requirements for updates, and provide a final program report within a month after the end of the rebate program. The Province may request additional reports from time to time on performance measures, including but not limited to: 1) number of applications received; 2) number of applications rejected, including reasons for rejections; 3) amounts associated with rebates, including aggregate total, median and average value of consumer rebate; 4) amounts associated with rebates by retailer, distributor and other gas or heating fuel vendor, including aggregate total, median and average value of rebates flowed through to customers.
The program will have to be designed to allow for efficient and effective internal and external audit requirements and future program evaluation. The Contractor must ensure proper oversight and the development of suitable documentation. As well, the Contractor will also be responsible for reviewing and verifying applications before providing a recommendation to the Province if an application should be approved or declined, and confirming rebate amounts where the application is accepted. Ideally, an organization with experience in financial and accounting services or program management, preferably in the energy and commodities sectors, would be best positioned to deliver the program.
The Government of Alberta worked with marketplace participants to gather input on the development of this program in order to provide financial relief to Albertans and small businesses. Utility service providers for natural gas and the Contractor for the program will need to collaborate to ensure that applications are smoothly processed in a timely fashion when the trigger price is activated. Input from heating fuel retailers has been considered during the regulation development process, and the Contractor will be responsible for providing input to the Province pertaining to program implementation.
The project requires adherence to strict timelines while delivering a complex program. An urgent need exists to deliver the program with agility and flexibility.
