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Alberta Electric System Operator 2017 and 2018 Deferral Account Reconciliation (AUC Decision 24910-D01-2019)

Link to Decision Summarized

Deferral Accounts, AESO


In this decision, the AUC approved the Alberta Electric System Operator (“AESO”) request to settle its 2017 and 2018 net deferral account shortfall with market participants in the amount of $154.1 million, effective January 1, 2020.

Background

In September 2019, the AESO filed an application (the “Application”) with the AUC requesting approval of its 2017 and 2018 deferral account reconciliation (”DAR”) and changes to deferral account balances for 2016 through to 2006, representing the reconciled variances arising between the actual costs the AESO has incurred in providing system access service and the forecast amounts recovered in rates charged to market participants for those years. The AESO requested approval of the determination and allocation of a $154.1 million net deferral account shortfall and approval to collect and refund the allocated amounts.

Application details

The settlement of DAR balances only applied to customers who received system access under Rate Demand Transmission Service (“DTS”) and Rate Fort Nelson Demand Transmission Service (“FTS”) during 2018 through to 2006.

The Application reflected the AESO’s first reconciliation of deferral account balances for 2017 and 2018. The AESO DARs for production years 2017 and 2018 were prepared on a retrospective, annual and production year basis and relied on the final approval granted by the AUC in Decision 22942-D02-2019, to apply the revised DAR methodology for 2017 and future production years.

The Application also reflected the AESO’s subsequent reconciliations for the years 2016 through to 2006 deferral account balances. The DARs for years 2016 through to 2006 were prepared on a retrospective, monthly and production month basis, consistent with the methodology used in all reconciliations from 2016 to 2004.

AUC findings

The AUC directed the AESO to either file future DAR applications by quarter two of a calendar year and/or to provide distribution facility owners (“DFOs”) with estimates of the annual deferral account shortfall or surplus amounts by the end of quarter one. This allows DFOs to be in a better position to collect or refund these amounts in their transmission access charge deferral account applications during the same calendar year the AESO seeks settlement of these amounts.

The AUC reviewed the AESO’s methodology and found it consistent with the methodology approved for DAR applications in Decision 22942-D02-2019. The AUC reviewed the allocation of the deferral account balances and found that it was consistent with previous DAR applications approved by the AUC and the 2018 ISO tariff. The AUC also reviewed the AESO’s proposed settlement process and found that it was reasonable and consistent with previous DAR applications approved by the AUC.

The AUC approved the deferral account balances and the net deferral account shortfall in the amount of $154.1 million.

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