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Alberta Electric System Operator Approval of Proposed Amended Section 505.2 of the ISO Rules, AUC Decision 26329-D01-2021

Link to Decision Summarized

ISO Rules – GUOC Refund


In this decision, the AUC approved the amendments to Section 505.2 of the independent system operator (“ISO”) Rules, Performance Assessment for Refund of Generating Unit Owner’s Contributions, proposed by the Alberta Electric System Operator (“AESO”).

Background

The AESO submitted that it is required to include in the ISO tariff the generating unit owner’s contribution (“GUOC”), which is meant to provide a long-term siting signal for generators to site in areas that would be most beneficial to load. Section 505.2 contains the performance assessment calculations for determining the refund of a GUOC to the legal owner of the generating unit. The currently approved version of Section 505.2 calculates a GUOC refund using rate system transmission service (“STS”) contract capacity as an input.

The AESO submitted that following the recent approval of the ISO tariff, Section 505.2 required updates to include the AESO’s new method for calculating the GUOC, the revised GUOC rates, and new terms for payment of the GUOC. The AESO explained this was needed as the ISO tariff changes require the extension of the GUOC to generating units that are not the subject of a Rate STS agreement with the AESO.

Under the proposed amended Section 505.2, the AESO would carry out the following process to assess GUOC refunds:

(a)     Assess performance in January;

(b)     Assess a performance factor of 100% or 0%, based on the metered energy of the generating unit during the performance year; and

(c)      Continue to provide the legal owner of the generating unit with a preliminary refund assessment, identifying the inputs used to arrive at the GUOC refund.

The AESO submitted that the proposed amendments to are consistent with the statutory scheme, the approved ISO tariff, complete and self-contained, and drafted to be clear, concise, and cohesive to facilitate stakeholder’s understanding.

The AESO submitted that the revisions incentivize market participants to provide the AESO with the best possible information. It submitted that this would: increase the AESO’s confidence that a connection project will proceed due to financial obligations being triggered upon execution of the Rate STS agreement, where applicable; reduce the risk that system transmission facilities are built for connection projects that do not materialize and ensure those market participants with generation pay an appropriate amount of a GUOC. The amendments also remove duplication in the legislative scheme, aligning with the Government of Alberta’s Red Tape Reduction initiative.

AUC Findings

Noting the absence of opposition to the application, and as no evidence to the contrary was submitted, the AUC was satisfied, based on the AESO’s explanations, that the proposed amendments to Section 502.10 are not technically deficient; support the fair, efficient, and openly competitive operation of the market; and are in the public interest.

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