Facilities – Transmission
On March 18, 2020, the Government of Alberta announced that “Albertans who are experiencing financial hardship directly related to the COVID-19 pandemic can work with their utility company to defer electricity and natural gas bills until June 19, 2020, without any late fees or added interest payments.” This payment deferral option applies to residential, farm and small commercial electricity consumers with sites that consume less than 250,000 kilowatt-hours of electricity per year and to residential, farm and small commercial natural gas consumers with sites that consume less than 2,500 gigajoules per year (“Eligible Retail Consumers”). The program is known as the Utility Payment Deferral Program.
The structure of the electricity industry in Alberta is comprised of several parties, each of whom has a role to fulfill in the delivery of electricity services to Albertans:
Alberta Electric System Operator (”AESO”)
Transmission Facilities Owners (“TFOs”)
Distribution Facility Owners (“DFOs”)
Retail Electricity Service Providers (competitive electricity retailers or regulated rate option providers)
Consequently, when an Alberta consumer elects to defer the payment of its electricity bill further to the Utility Payment Deferral Program, each of the parties with a role in the delivery of electricity services to Albertans is affected.
On April 15, 2020, the AUC received an application from the AESO requesting approval to permit the deferral of the recovery of Rate DTS charges from DFOs that would otherwise apply, as approved by the AUC in Decision 25175-D01-2020 through two proposed deferral programs: (1) Retail Consumers Deferral Program; and (2) Transmission-Connected Deferral Program. Amendments to the application were made and filed on April 21, 2020.
Relief Requested by the AESO
The AESO proposed two distinct programs to temporarily facilitate the deferral of the collection of certain charges determined in accordance with Rate DTS in the ISO tariff.
Retail Consumers Deferral Program
The first program, referred to as the Retail Consumers Deferral Program, would permit each DFO and the City of Medicine Hat (collectively “DFOs”) to defer payment of the following ISO tariff charges billed to a DFO as a result of Eligible Retail Consumers during the 90-day period of the Utility Payment Deferral Program, from March 18, 2020, until June 19, 2020 (“Retail Consumers Deferral Period”), and any extension (“Extended Transmission-Connected Deferral Period”), if such charges are not paid by a Retail Electricity Service Provider to the DFO:
(a) Charges determined under Rate DTS in respect of the transmission of electric energy consumed by Eligible Retail Consumers; and
(b) Charges applied under Rider C, Deferral Account Adjustment Factor, of the ISO tariff (Rider C), and Rider F, Balancing Pool Consumer Allocation Rider, of the ISO tariff (Rider F).
The AESO made several specific requests for relief in support of its Retail Consumers Deferral Program.
Transmission-Connected Deferral Program
The AESO indicated that its proposed Transmission-Connected Deferral Program would apply to:
(a) persons who have entered into an arrangement directly with the AESO for the provision of system access service under subsection 101(2) of the Electric Utilities Act;
(b) the legal owners of industrial systems that have been designated as such by the AUC; and
(c) the City of Medicine Hat.
(collectively, “Transmission-Connected Market Participants”).
The AESO proposed that under the Transmission-Connected Deferral Program, Transmission Market-Connected Participants would be able to defer payment of any increase in their charge determined by the AESO from Rate DTS in place before April 1, 2020, to the interim Rate DTS approved in Decision 25175-D01-2020 or any final Rate DTS approved in an AESO tariff decision during the period April 1, 2020, to June 30, 2020 (“Transmission-Connected Deferral Period”) or during the period of any extension to the Transmission-Connected Deferral Period (“Extended Transmission-Connected Deferral Period”).
The AESO made several specific requests for relief in support of its Transmission-Connected Deferral Program.
Discretion to Issue a Decision Without Notice or Hearing
The AUC found that no party would be directly and adversely affected by granting the requested relief. Notwithstanding this finding, the AUC issued a filing announcement and provided notice to parties registered in Proceeding 25175 of this application. As well, although no formal process was established, AUC staff heard brief oral submissions from the AESO, and the DFOs on April 20, 2020, regarding the application and the AESO’s amended application reflected these submissions.
Authority to Grant Relief
Section 8(2) of the Alberta Utility Commission Act grants the AUC broad authority in the exercise of its powers, while section 23(1) grants the AUC further general powers to order persons to do (or cease to do) any act matter or thing under AUC jurisdiction.
The AUC found that its mandate is sufficiently broad to confer jurisdiction to grant the AESO’s requested relief if the AUC determined that doing so is within the public interest.
Public Interest to Grant Relief
Given the complex electricity industry structure, a substantive change to the functioning of one element necessarily has a domino effect on the other entities who are charged with a role in the delivery and billing of electricity to Albertans. Although the AESO’s proposal will lead to an increase in tracking and reporting activity for certain affected market participants, the AUC considered that this activity will be manageable and will not result in a significant cost burden given the information regularly provided in tariff bill files. Further, if DFOs incur additional costs to facilitate the relief proposed, namely, that the AESO carry the costs of the DTS charges of the electricity bills of Eligible Retail Consumers who have opted to defer payment of their electricity bills under the Utility Payment Deferral Program, these DFOs may apply to the AUC for recovery of their tracking and reporting costs as a Y factor adjustment.
Moreover, the AUC noted the proposed deferral programs are conceptually aligned with the Utility Payment Deferral Program and have been brought forward in response to the direction of the Alberta Department of Energy as part of the Government of Alberta’s efforts to address financial hardships affecting Albertans as a consequence of the COVID-19 pandemic.
The AUC considered it to be in the public interest to approve the establishment of the two proposed deferral programs.
Process for Recovery of Deferred Payments by the AESO
The AESO will be required to collect the DTS, Rider C, and Rider F charges that are not paid by a Retail Electricity Service Provider to a DFO and the deferred portion of the Rate DTS charges of Transmission-Connected Market Participants at some future point. Under this requirement, the AESO will be authorized to create any deferral accounts as part of the implementation of the relief requested in the application.
The AESO has the authority to recover these revenue shortfalls through a rate rider or riders to its ISO tariff. Any proposal to collect amounts that may be accrued to the above-noted deferral accounts as a consequence of this decision and to be recovered through a rate rider shall be set out in an application from the AESO to be filed for approval by the AUC.
The AUC granted the AESO the relief to temporarily facilitate the deferral of the collection of certain charges determined under Rate DTS in the ISO tariff, to enable the Retail Consumers Deferral Program and the Transmission-Connected Deferral Program.