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Alberta Electric System Operator Application for Approval of the Adjusted Metering Practice Implementation Plan and Associated Section 502.10 of the ISO Rules, AUC Decision 27047-D01-2022

Link to Decision Summarized

ISO Rules

In this decision, the AUC refused an application by the Alberta Electric System Operator (“AESO”) for approval of the adjusted metering practice (“AMP”) implementation plan. The AUC considered whether the AMP implementation plan and the related proposed amendments to the Independent System Operator (“ISO”) tariff and s. 502.10 of the ISO Rules, Revenue Metering System Technical and Operating Requirements, provided a way to implement the AMP that complies with the Electric Utilities Act (“EUA”).

Background and Application

In Decision 22942-D02-2019, the AUC approved the 2018 ISO tariff, including the AESO’s proposed AMP. In Decision 25848-D01-20220, the AUC varied its findings from Decision 22942 and determined that grandfathering the AMP was unnecessary.

The AESO filed this application in compliance with directions issued in Decision 26215-D02-2021.

Issues

Do the Rule Amendments Meet the Criteria set out in the EUA

The AUC found that the AESO’s proposed amendments to the ISO Rules are consistent with the statutory scheme and authorized by subsections 20(1)(a), 20(1)(c), and 20(1)(l) of the EUA. The AUC further found that the rules, as amended, are complete and reasonably self-contained. The AUC was therefore satisfied that the proposed amendments do not render the rules technically deficient. The AUC was also satisfied that the AESO had complied with requirements regarding information and consultation set out in Rule 017.

The AUC was not satisfied that the proposed amendments support the fair, efficient and openly competitive operation of the electricity market or that the proposed amendment is in the public interest. The AUC noted that the phase-out of distribution-connected generator (“DCG”) credits will substantially decrease billing determinant erosion, independent of the implementation of the AMP. It was therefore not clear how much benefit the AMP implementation would provide.

As a result, the AUC could not evaluate the AESO’s claim that the benefits of more accurate billing determinants provide sufficient justification for the different timing of implementation at Category B and Category C substations.

The AUC was not satisfied with the accuracy and available information related to the cost estimates provided by the AESO in the AMP implementation plan. The AUC was concerned that it could not conduct a reasonable assessment of the AESO’s Phase 3 costs estimates. With no information on the estimated costs of Phase 3, and given that the requested approval of the AMP implementation plan includes Phase 3, the AUC must be satisfied that Phase 3 costs are (1) reasonable and (2) in the public interest. The AESO did not provide sufficient cost estimates to allow for this assessment.

As a result, the AUC determined that the AESO did not demonstrate that the submitted AMP implementation plan would be in the public interest.

Given this uncertainty, the AUC did not require the AESO to file a further application proposing an implementation plan for the AMP. However, if the AESO does wish to apply for approval of an AMP implementation plan in the future, the AUC sets out specific information requirements in this decision.

Order

The AUC noted that s. 20.21(4) of the EUA sets out that the AESO must satisfy the AUC that the approval criteria are met. The application from the AESO did not discharge this onus.

Accordingly, pursuant to subsection 20.21(1)(c) of the EUA, the AUC denied the application.

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