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Alberta Electric System Operator Independent System Operator Tariff Modernization Application, AUC Decision 27864-D01-2023

Link to Decision Summarized

Electricity – Rates


The Alberta Electric System Operator (“AESO”) applied for revisions to the Independent System Operator (“ISO”) tariff. The proposed revisions related to the AESO’s existing practices and processes for reviewing system access service (“SAS”) requests (the “SASR revisions”), the generating unit owner’s contribution (“GUOC”), and the costs of complying with applicable emissions legislation in the existing compensation formula for the provision of conscripted transmission must-run service (the “TMR revisions”), as well as introducing associated new or amended definitions in the Alberta Electric System Operator (“AESO”)’s Consolidated Authoritative Documents Glossary.


The AUC approved the application as filed, with one exception. The AUC  directed the AESO to revise its proposal concerning the terms and conditions applicable to the GUOC to reflect the alternative approach provided by the AESO in its final argument.

Applicable Legislation

Electric Utilities Act, SA 2003, c E-5.1.

Transmission Regulation, Alta Reg 86/2007.

ISO Rules.

Pertinent Issues

The AESO determined the scope of the revisions sought in the application based on stakeholder consultation. The AESO sought approval of revisions that it considered would be non-controversial, would improve clarity and reduce repetition, and better reflect the AESO’s existing practices and process. The AESO took and intends to continue taking, a modular or phased approach to tariff filings, applying more frequently for the approval of separate tariff components as part of smaller tariff filings, rather than submitting large general tariff applications every three or four years.

The TMR Revisions

The AESO proposed to amend the ISO tariff to allow a generator that provides uncontracted TMR service, in response to an AESO directive, to be compensated for the actual emissions costs incurred. The AESO also proposed to extend the invoicing period for emissions compliance costs to prevent a generator from being required to issue invoices before knowing the actual emissions compliance costs. The AUC approved these revisions as filed.

The SASR Revisions

The AESO submitted that revisions to the SASR related sections were necessary to better align with, and clarify the AESO’s existing practices and processes for the review of SASRs submitted by market participants.

Interveners argued that the revisions related to the timing for execution of SAS agreements in s 3.6(1)(b) and notification of changes to a SASR in s 3.9(2) of the ISO tariff should not be approved as the revisions reduce the transparency, intelligibility, and certainty of the ISO tariff and negatively impact investor certainty and the fair, efficient and openly competitive operation of the Alberta Interconnected Electric System. In the AUC’s view, the proposed revisions to s 3.6(1)(b) reflect no change to the scope of discretion that the AESO currently holds under s 3.6(1)(b). The AESO, in creating practices in the ISO tariff such as requiring market participants to execute SAS agreements at certain times, using certain forms containing certain information if a new or an amended needs approval is required for a connection project, assists the AESO in satisfying its duties set out in s 6(1) of the Transmission Regulation. Consequently, the AUC approved the AESO’s requested SASR revisions to s 3.6(1)(b) and s 3.9(2) as filed.

The New Definitions

The AUC approved the AESO’s proposed new exhaustive definition for “system transmission facilities” because it found that the change is purely administrative in nature, will not impact the AESO’s existing practices, and will result in greater consistency in the application of the ISO tariff.

GUOC Revisions

GUOC is a refundable payment made by the owner of a generating unit or aggregated generation facility to the AESO. The purpose of GUOC is to provide a long-term siting signal to generators to site in areas that would be most beneficial to load. GUOC must be paid before the commencement of construction of the facilities required to connect a generating unit or aggregated generation facility, and is refundable to the owner subject to the satisfactory operation of the generating unit determined under s 505.2 of the ISO rules, Performance Criteria for Refund of Generating Unit Owner’s Contribution.

The current version of s 7.5(2) states that the GUOC refund period starts on January 1 following the initial contract capacity date specified in the SAS agreement. Under the AESO’s proposal, the GUOC refund period starts on January 1 following the energization date specified in the GUOC notice that will be issued by the AESO under s 7.4(3). Interveners expressed concerns that the AESO’s proposed revisions to s 7.5(2) would fix the start date for a project’s GUOC refund period at an earlier date than is currently the case, thereby increasing the risk that a refund is forfeited if a generation project’s actual energization date is delayed.

The AUC agreed that the proposed revisions would increase the risk that a GUOC refund is forfeited for some market participants. The AUC approved the alternative approach that the AESO proposed in its final argument, which provided that the energization date specified in the GUOC notice could be amended to align with any subsequent changes to the initial contract capacity date described in a SAS agreement, before the SAS agreement becoming effective, for generation projects that require a SAS agreement.

The AUC approved the proposed GUOC revisions as filed, with the following exception: the AUC directed the AESO to revise its proposed GUOC revisions, the ISO tariff, and any other documents that may be affected, in its compliance filing to this decision, to reflect the approach that the AESO provided in its argument.

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