Loss Factor Methodology
In this decision, the AUC found that the Alberta Electric System Operator (“AESO”)’s proposed Modified Module B methodology for calculating loss factors from January 1, 2006, to December 31, 2016, (the “historical period”) was compliant with the AUC’s directions in Decision 790-D06-2017. The AUC directed the AESO to apply the Modified Module B methodology to calculate loss factors for the historical period. The AUC also approved the AESO’s request to split the compliance filing to Decision 790-D06-2017 and directed the AESO to file a second compliance filing to address issues related to the collection and reimbursement of loss charges calculated for the historical period.
There are only two approved methodologies for calculating loss factors: the Module B methodology to be applied going forward (pursuant to Decision 790-D03-2015 (Phase 2, Module B)), and the Modified Module B methodology to be applied to the historical period (pursuant to Decision 790-D06-2017 (Phase 2, Module C)).
Issues Related to the Collection and Reimbursement for Loss Charges
The AUC found that dividing the compliance filing will assist in completing the Modified Module B calculations more quickly. Therefore, the AUC approved the AESO’s proposal to file a second compliance filing. The second compliance filing will consider issues related to the collection and reimbursement of loss charges, including Rider E adjustments.
Compliance Filing Requirement in Decision 790-D06-2017
In Decision 790-D06-2017, the AUC approved the use of the Modified Module B methodology for calculating line losses for the historical period.
There are distinctions between the Module B methodology and the Modified Module B methodology. The Module B methodology was approved on a go-forward basis effective January 1, 2017, as ISO Rules Section 501.10 Transmission Loss Factors, (“ISO Rule 501.10”). The Modified Module B methodology was approved for use during the historical period based on the Module B methodology but with modifications. Specifically, when calculating loss factors for the historical period, the aggregation of generating units is not permitted. In addition, the Modified Module B methodology must use actual, rather than forecast, data.
Incremental Loss Factor Methodology
The AUC found that the AESO’s proposed compliance filing was consistent with the requirement for an incremental loss factor methodology, because the Module B methodology was approved as an incremental loss factor methodology and, other than replacing the word “must” with “will” there were no material differences between subsection 8(1) and the AESO’s proposed Modified Module B methodology for the historical period.
Location as the Metering Point Identifier
The AUC found that the AESO’s proposed changes satisfied and were consistent with the AUC’s previous directions.
Keeping Load Constant and Scaling Up Other Generation
The AUC found that the AESO’s March 12, 2019, compliance filing update, which applied to fewer than 10 locations, was a reasonable adjustment to implement the AUC’s broader direction of applying the Modified Module B methodology to the historical period and was consistent with the AUC’s previous directions in this regard.
Using the Energy Market Merit Order to Determine Loss Factors
The AUC found that the AESO’s proposed methodology for the historical period, as amended by the March 12, 2019, compliance filing update, was materially comparable to the lawful rule approved in Decision 790-D05-2016 and, as such, was reasonably capable of meeting the same legislative and regulatory requirements.
Applying Collars to Adjust Loss Factors
The AUC found that the AESO proposed Modified Module B methodology for implementing collars during the historical period was consistent with the AUC’s findings. The AUC found that Milner’s proposal to use previous collars based on forecast data for the years 2006 through 2008, was without merit.
Shift Factors
The AUC found that the AESO’s application of shift factors in its March 12, 2019 compliance filing update, was consistent with the AUC’s previous directions.
Treatment of the Bow River Hydro System
The AUC found that no additional details were required in the AESO’s proposed methodology regarding the treatment of loss factor calculations for multiple generating unit systems during the historical period.
Subsection 5(4) of ISO Rule 501.10 allows the multiple generating units of the Bow River Hydro System to be aggregated into a single source asset for the purpose of calculating loss factors.
Exclusion Provisions
The AUC found the AESO’s proposal to refrain from materially changing the exclusion provisions in section 8 of ISO Rule 501.10 for the historical period to be reasonable.
The exclusion provisions in ISO Rule 501.10 were previously approved by the AUC as part of the Module B methodology. The AUC further directed that the Module B methodology be used for the historical period with modifications related to using actual data and eliminating aggregation. The AESO proposed no material changes to the exclusion provisions in section 8 of ISO Rule 501.10 for the historical period. The AESO opposed the addition of “thresholds” to limit the number of excluded hours because it considered such limits to be arbitrary and because they might introduce a greater need for manual interventions when calculating loss factors.
Summary
The AUC found that the AESO complied with the AUC’s direction from Decision 790-D06-2017. The AUC confirmed that although the proposed methodology for the historical period required AUC approval, the related procedure documents in this proceeding did not, because these procedures will likely evolve as necessary to implement the Modified Module B methodology.
The AUC ordered that the AESO’s proposed Modified Module B methodology applied to calculate line losses for the historical period. The AUC further ordered that the AESO file a second compliance filing to address issues related to the collection and reimbursement of loss charges calculated for the historical period.
