Rates – Balancing Pool Adjustment
In this decision, the AUC approved ATCO Electric’s 2020 Balancing Pool adjustment rider as filed, effective January 1, 2020.
Background and Details of the Application
Under the Electric Utilities Act (“EUA”), the benefits and costs associated with the Balancing Pool are shared among all electricity customers in Alberta. Accordingly, each year the Balancing Pool is required to forecast its revenues and expenses to determine any excess (or shortfall) of funds. Based on this forecast, the Balancing Pool determines an annualized amount that will be remitted to (or collected from) electricity consumers over the year. Pursuant to Section 82 of the EUA, these distributions or charges are made through the Alberta Electric System Operator (“AESO”) tariff, by way of Rider F.
The amount to be remitted or collected by way of Rider F is known as the consumer allocation and applies to all market participants who receive system access service under rate demand transmission service (“DTS”) and rate demand opportunity service (“DOS”) from the AESO. The allocation among participants is based on the amount of electric energy consumed annually. Because the AESO’s Rider F is calculated at the substation point of delivery (“POD”) level and a utility’s Balancing Pool allocation rider is applied at the customer meter level, in calculating a utility’s Balancing Pool allocation rider, the AESO’s charge rate must be adjusted to account for distribution losses.
In its application, ATCO Electric detailed the calculation of Rider B for all rate classes. More specifically, ATCO Electric detailed its proposed adjustment to the AESO Rider F charge of $2.50/MWh for distribution losses for all rate classes with the exception of transmission-connected classes (T31/T33), which are billed on a flow through basis. Metering and billing of these customers ensure that the amounts billed are consistent with the $2.50/MWh charge. ATCO Electric noted that consistent with previous Rider B applications, in setting its Rider B rates, it will continue to take into account the effects of distribution losses by rate class as approved in Decision 2011-483, ATCO Electric’s 2011 Phase II application.
The AUC noted that ATCO Electric calculated its proposed Rider B based on the AESO’s 2020 Rider F consumer allocation charge of $2.50/MWh, adjusted for ATCO Electric’s estimated 2020 distribution losses, consistent with the methodology used in other previous Rider B decisions. The AUC found the assumptions ATCO Electric relied on to be reasonable and its calculations correct.
The AUC acknowledged that ATCO Electric filed an updated Phase II application with updated distribution loss factors, which was currently before the AUC in proceeding 24747. It directed ATCO Electric, in its next Rider B application, to utilize any updated distribution line loss figures approved by the AUC in that proceeding.
The AUC approved ATCO Electric’s 2020 Rider B effective January 1, 2020, noting that ATCO Electric’s 2020 Rider B will eventually be trued up to ensure the approved amounts were collected from customers.