Category Archives: Utility Regulation

How Should We Assess Transmission Upgrades When They are Requested by the DFO?

PDF Version: How Should We Assess Transmission Upgrades When They are Requested by the DFO?

Decisions Commented On: (1) AUC Decision 23339-D01-2019, Alberta Electric System Operator Needs Identification Document Application AltaLink Management Ltd. Facility Applications Provost Reliability Upgrade Project, and January 22, 2019; and (2) AUC Decision 23393-D01-2019, Alberta Electric System Operator Needs Identification Document Application AltaLink Management Ltd. Facility Application Fincastle 336S Substation Upgrade, February 14, 2019.

These two decisions deal with the Alberta Utilities Commission’s (AUC) assessment of a needs identification document (NID) to build new transmission in a situation where the NID was prepared on the basis of a system access service request (SASR) originating from the incumbent distribution facility owner (DFO) – in this case, FortisAlberta. Both cases triggered a dissenting opinion from AUC Vice Chair Anne Michaud. In each case the principal difference between the dissent and the majority turned on the Alberta Electric System Operator’s (AESO) responsibility to assess the reasonableness of the need for system access where the impetus to prepare the NID came from the DFO. In both cases, Vice Chair Michaud takes the view that if the AESO fails to properly scrutinize the need for the DFO’s SASR request then there is no public interest assessment of such a request. In both cases Vice Chair Michaud would have sent the NID back to the AESO with the suggestion “that the NID application incorporates an analysis of the need for the project that includes a weighing of the expected increase in reliability against the potential impacts of the project, having regard for the fact that the AESO is not required in all circumstances to respond to a SASR with a proposed transmission solution.” (Provost Decision at para 313).

The argument that greater scrutiny may be required in the case of a NID prepared in response to a SASR request from a DFO draws on the understanding that a DFO (unlike the AESO) does not have a public interest mandate and may therefore have an incentive to overbuild to increase its rate base – unless dis-incented from doing so by the new approach to capital investment in Phase II of performance based regulation – a doubtful proposition at best. New transmission is expensive and the cumulative effects on consumer bills significant. An important element of assessing the need to upgrade existing transmission facilities is the applicable reliability standard: the higher the reliability standard the greater the capital expense. What is that standard? Who gets to set that standard and should it be the same for all that are connected to the transmission system?

Continue reading →

Opening a Can of Worms: What are the Applicable Market Rules for Generation Where the Generator Fails to Use the Entire Output?

By: Nigel Bankes

PDF Version: Opening a Can of Worms: What are the Applicable Market Rules for Generation Where the Generator Fails to Use the Entire Output?

Decision Commented On: EPCOR Water Services Inc., EL Smith Solar Power Plant, February 20, 2019, Decision 23418-D01-2019

This decision raises important questions as to the applicable rules for self-generation where the generator seeks to export any surplus to the grid. The decision deserves to be read by all those engaged in self-generation beyond the micro and small levels, including self-generation that benefits from designation as an industrial system.

Continue reading →

Leave to Appeal Denied on the AUC’s Jurisdiction to Create an Effective Remedy in the Line-Loss Saga

By: Nigel Bankes

PDF Version: Leave to Appeal Denied on the AUC’s Jurisdiction to Create an Effective Remedy in the Line-Loss Saga

Case Commented On: Capital Power Corporation v Alberta Utilities Commission, 2018 ABCA 437 (CanLII)

There are previous posts on ABlawg dealing with the line-loss issue including a post on the Alberta Utilities Commission’s (AUC) 2015 decision at issue in this case. In that decision, the AUC concluded that it had jurisdiction to order an effective remedy to deal with the fact that the Alberta Electric System Operator’s (AESO) line-loss rule in effect between 2005 and 2012 was unlawful and invalid, and that it could do so even though the result would be retrospective rate making. Some generators would receive rebates and some would receive invoices for past transmission losses.

Continue reading →

Implementing the Capacity Market for Electricity in Alberta: Bill 13 and the AESO’s CMD.2

By: Nigel Bankes

PDF Version: Implementing the Capacity Market for Electricity in Alberta: Bill 13 and the AESO’s CMD.2

Bill Commented On: An Act to Secure Alberta’s Electricity Future, Bill 13 [Alberta], first reading, April 19, 2018.

Documents Commented On: AESO, Comprehensive Market Design 2, and the Rationale for the Comprehensive Market Design 2, April 24, 2018

As previously noted on ABlawg, Alberta is in the processing of adding a capacity market to complement the existing energy and ancillary services markets in the electricity sector. This post comments on two recent developments in the field. The first is the release by the Alberta Electric System Operator (AESO) of the second iteration of its Comprehensive Market Design (CMD) for the proposed capacity market (CM). The second is the introduction of An Act to Secure Alberta’s Electricity Future (Bill 13). While this Bill has additional objectives as previously noted, the principal purpose of the Bill is to provide the necessary statutory support for the implementation of the CM. Continue reading →

Overturning Stores Block and Implementing the Capacity Market

By: Nigel Bankes

PDF Version: Overturning Stores Block and Implementing the Capacity Market

Bill Commented On: An Act to Secure Alberta’s Electricity Future, Bill 13 [Alberta], first reading, April 19, 2018

This Bill has four main objectives. First (clauses 1-2), Bill 13 overturns the majority decision of the Supreme Court of Canada in a case known as Stores Block: ATCO Gas & Pipelines Ltd. v Alberta (Energy & Utilities Board), 2006 SCC 4 (CanLII). Second (clauses 3-35), the Bill will amend a series of energy statutes to provide the necessary legislative framework to implement the government’s plan to establish an electricity capacity market to supplement the existing energy market. Third (clause 36), the Bill will afford the Alberta Utilities Commission (AUC) enhanced authority to make orders (including administrative penalties) with respect to electric utilities, regulated rate providers and retailers (and their gas equivalents) where the AUC concludes that there has been a failure to comply with the rules respecting service quality and standards. Fourth, the Bill (clause 57) will afford the Lieutenant Governor in Council the authority under s 142 of the Electric Utilities Act, SA 2003, c E-5.1 to allow the AUC and the Alberta Electric System Authority (AESO) to make rules with respect to the expedited construction of transmission. Such rules are currently found in some form in the Transmission Deficiency Regulation, Alta Reg 176/2014. Continue reading →