Review and Variance – Distributed Generation – AESO Tariff
In this decision, the AUC approved the preliminary stage application from the Community Generation Working Group (“CGWG”) and FortisAlberta Inc. (“FortisAB”) for review and variance of specific findings in section 7.3 of Decision 22942-D02-2019 (the “Decision”) regarding the Alberta Electric System Operator’s (“AESO”) proposed adjusted metering practice. Having granted a review of the AESO’s proposed adjusted metering process, the AUC would proceed with a second stage variance proceeding.
Introduction and Background
The Decision addressed an application from the AESO for approval of an adjusted metering practice as part of its 2018 ISO tariff application. In the Decision, the hearing panel (“Hearing Panel”) approved the AESO’s proposed adjusted metering. Under the approved adjusted metering practice the AESO would separately meter supply transmission service (“STS”) and distribution transmission service (“DTS”) amounts at distribution facility owners (“DFO”) substations on a “gross” basis rather than metering energy flowing on the Alberta Interconnected System (“AIES”) on a “net” basis. Among other effects, the Decision to allow the AESO to meter on a gross basis could have a significant effect on the economics of distribution-connected generation, because it would cause AESO contribution amounts to include amounts arising from the substation faction formula in accordance with the ISO tariff.
The AUC’s Review Process
The AUC’s authority to review its own decisions is discretionary and is found in Section 10 of the Alberta Utilities Commission Act. That act authorizes the AUC to make rules governing its review process and the AUC established Rule 016 under that authority. Rule 016 sets out the process for considering an application for review.
The review process has two stages. In the first stage, a review panel must decide whether there are grounds to review the original decision. This is sometimes referred to as the “preliminary question.” If the review panel decides that there are grounds to review the decision, it moves to the second stage of the review process where the Commission holds a hearing or other proceeding to decide whether to confirm, vary, or rescind the original decision.
In this decision, the review panel (“Review Panel”) decided the preliminary question.
Grounds for Review and Hearing Panel Findings
CGWG Review Application
In the review application, the CGWG requested a review of the AUC’s approval of the AESO’s transmission cost allocation substation fraction formula methodology. The CGWG objected primarily to paragraph 742 of the Decision:
742. The substation fraction formula is a long-established mechanism used by the AESO to allocate the costs of local interconnection facilities that may have joint use. Further, while the Commission considers that use of a ratio of the respective STS and DTS contract capacities as a percentage of the combined DTS and STS contract capacities of customers using the local interconnection facilities is a relatively simple mechanism, it is not unreasonable in the absence of any other information. The Commission notes that no parties in the current proceeding have provided any evidence suggesting that a mechanism other than the substation fraction formula would be an improvement for this purpose.
To support its review request, the CGWG argued two grounds of review: (1) errors of fact, law, or jurisdiction, which are apparent in the Decision or had been established to exist on a balance of probabilities; and (2) previously unavailable facts material to the particular aspect of the Decision that is the subject of this application, that existed prior to the issuance of the Decision but were not previously placed in evidence or identified in the proceeding, and could not reasonably have been discovered during the course of the 2018 ISO Tariff proceeding.
The CGWG argued the substation fraction formula proposed by the AESO was not a “long-established mechanism” and that there were other options available to the AUC that were outlined in evidence. It further argued that formula changes embedded in AESO ID# 2019-016T could not have been discovered at the time of proceeding 22942 by the CGWG exercising reasonable diligence.
FortisAlberta Review Application
In its review application, FortisAB sought a review of the findings on the AESO’s adjusted metering practice. In support of its application, FortisAB argued that there were multiple errors in law and fact in the Decision and that, since the issuance of the Decision, there had been changes in circumstances material to the Decision.
Review Panel Findings
The Review Panel made no findings in response to the specific grounds raised by each of the CGWG and FortisAlberta in their respective review applications. Because the Review Panel has directed a review of the Hearing Panel’s findings in section 7.3 of the Decision, including consideration of a new proposal for the substation fraction methodology that could resolve issues raised by these parties, a determination of whether the grounds raised by these parties has been demonstrated and further, whether the errors alleged by each of these parties are both obvious on the face of the Decision and material, was not required.
In answering the preliminary question, the Review Panel found that there were changed circumstances that could lead the AUC to materially vary or rescind its findings in section 7.3 of the Decision. It also noted that there were specific findings in section 7.3 of the Decision which would not be the subject of a variance proceeding, and it outlined these findings in an appendix to the decision. Having met the first stage of the review and variance application, the AUC advised that it would issue process and scope directions for a new proceeding to consider the second stage of the review process, the variance proceeding, in Proceeding 25175: 2018 ISO Tariff Compliance Filing Pursuant to Decision 22942-D02-2019 and 2020 ISO Tariff Update Application.