Request for Stakeholder Comments on
AESO 2018 ISO Tariff Consultation
Background
On March 1, 2017, the AESO and stakeholders participated in a consultation meeting to discuss (1)
potential changes to the ISO tariff’s terms and conditions; (2) potential changes/amendments to Rider A1
– Transmission Duplication Avoidance Adjustment Dow Chemical Canada Inc. / Dow Hydrocarbons /
ASU2; and (3) application process and next steps. Based on discussion at the meeting, the AESO invites
written comments from stakeholders on the information presented. The meeting presentation is posted on
the AESO website and can be accessed at www.aeso.ca by following the path Rules, Standards and
Tariff ► Stakeholder engagement ► 2018 ISO Tariff Application.
Please use the comment form below when submitting comments to the AESO on the 2018 ISO tariff
consultation. Please ensure that your comments represent all interests within your stakeholder
organization with respect to the consultation. Please provide comments or questions no later than
March 17, 2017, to LaRhonda Papworth at [email protected] or 403-539-2555.
Consultation and Stakeholder Identification
Date of Request for Comments: March 7, 2017
Period of Consultation:
November 15, 2016 – March 7, 2017
Comments From:
Date:
Contact:
Phone:
Email:
Stakeholder Comments on AESO Information
Stakeholder Comment
(1) ISO Tariff Terms and Conditions Proposals
(Slides 6 – 30)
A. Principles for Load Customers (Slide 10):

Provide a price signal;

System transmission facilities are not built as the result of a connection(s) not
proceeding; and

General high-level alignment with Decision 3473-D02-2015.
Stakeholder Comments:
B. Alternative Selection for Load Connections (Slides 11-13):
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Stakeholder Comment

Load connection alternative must be unconstrained; and

Alternative selected will be lowest overall costs alternative.
Stakeholder Comments:
C. System Transmission Facilities Required for a Load Connection – “Filed System NID” (Slides
14 – 16):

AESO is proposing to change language in the ISO tariff terms and conditions to add
clarity regarding “long term transmission system plan” and “as the ISO reasonable
expects will be required in the future” (section 8, subsection 3(3)(b)).
Stakeholder Comments:
D. System Transmission Facilities Required for a Load Connection – with a Filed System NID
(Slide 17):

Market participant can wait for build?

If not, a System NID with date driven milestones – customer would pay advancement
costs calculated in accordance with current ISO tariff provisions

If not, and a System NID without date driven milestones – customer would pay
“commitment” charge
Stakeholder Comments:
E. Concept 1: System Transmission Facilities Required for a Load Connection – without a Filed
System NID (Slides 18 - 21):

Market participant can wait for build?

If market participant can wait for system development (with milestones), the system
transmission development will be initiated upon market participant’s energization;

If market participant cannot wait for system development (with milestones), market
participant pays a refundable deposit in order to provide “sufficient certainty” of project
going ahead.
o Market participant will be refunded deposit upon connection project
energization
Stakeholder Comments:
F. Concept 1: Refundable Deposit – What does it provide for the AESO? (Slide 21):

Provides “sufficient certainty” that connection project will energize;

Will not build system transmission assets that will not be used;

Provides a price signal where there is limited capacity; and

Only applies when the market participant cannot wait for system transmission facilities.
Stakeholder Comments:
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Stakeholder Comment
G. Concept 1: Refundable Deposit – Pros and Cons (Slide 22):
Pros:

Strong price signal if market participant cannot wait;

Aligns with Generator Unit Owner’s Contribution (“GUOC”) incentives, (i.e. “performance”
= “energization”);

Encourages timely energization as the AESO is holding a large deposit;

The market participant can choose to wait or stage their contract to accommodate current
system capacity and system facilities construction will begin after connection project
energization.
Cons:

System transmission facility costs might be prohibitively high;

Delay in cost estimates (may not occur until the creation of the system NID).
Stakeholder Comments:
H. Concept 2: System Transmission Facilities Required for a Load Connection – without a Filed
System NID (Slides 23 - 24):

Market participant can wait for build?

If market participant can wait for system development (with milestones), the system
transmission development will be initiated upon market participant’s energization;

If market participant cannot wait for system development (with milestones), market
participant pays a “sufficient certainty charge” in order to provide “sufficient certainty” of
project going ahead.
o System transmission facilities will be initiated upon receipt of the
“sufficient certainty charge”.
Stakeholder Comments:
I.
Concept 2: Sufficient Certainty Charge – What does it provide for the AESO? (Slide 25):

Restores a reasonable balance between certainty and price signals;

Provides the AESO with sufficient certainty that the connection project will energize;

May calculate in accordance with the current tariff provisions;

Provides a price signal where there is limited capacity;

Only applies when the market participant cannot wait for system transmission facilities;
and

Intended to address system build required that is not anticipated or planned in the AESO
near-term planning horizon (5 years).
Stakeholder Comments:
J. Concept 2: Sufficient Certainty Charge – Pros and Cons (Slide 26):
Pros:

Market participant pays a share of the system transmission facilities for causing
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Stakeholder Comment
advancement of unplanned facilities;

Strong price signal if market participant cannot wait;

The market participant can choose to wait or stage their contract to accommodate current
system capacity (considering forecast growth) and system facilities construction will
begin after connection project energization.
Cons:

“Sufficient certainty charge” cost might be high.
Stakeholder Comments:
K. Tariff Alignment – Other items (Slides 28 - 29):
1. Advancement costs apply to ally system transmission facilities required for a load
connection, not solely radial facilities planned to be looped (section 8, subsection 3(3)(b));
2. “Accelerated construction costs” as contemplated in Decision 3473-D02-2015;
3. Filed system NID (with MW milestones) required, current tariff refers to the long-term plan,
or as ISO reasonable expects will be required in the future;
4. Differentiation between generation and load connections; and
5. “Shared with system” cost provisions.
Stakeholder Comments:
L. Next Steps (Slide 30)

Allow stakeholders to review presentation and concepts;

Gather stakeholder feedback and incorporate in to further work;

Follow up in next stakeholder session; and

Work towards recommended approach for application.
Stakeholder Comments:
(2) Rider A1 – Dow Chemical Canada Inc. / Dow Hydrocarbons / ASU2 Changes
(Slides 31 – 33)
A. Rider A1 – Dow Duplication Avoidance Tariff (DAT) Issues (Slide 32):

Rider A1 is inconsistent with other Rider A’s with language and detail;

Forecast benefit table ends in 2021 – what happens after 2021; and
o

25-year (approx.) business case assumption in original application does not
reflect the expectation of asset life for a transmission line.
What is required in the ISO tariff to provide clarity on future duplication avoidance sites’
treatment.
Stakeholder Comments:
B. Rider A1- Dow Duplication Avoidance Tariff (DAT) – Next Steps (Slide 33):
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Stakeholder Comment
1. The AESO plans to update Rider A1 to authoritative language;
2. High-level test of some criteria considered in original AEUB decision U98125 (available
capacity, credible bypass threat, and service life of transmission facilities);
3. Consideration of Rider A1 continuing to a reasonable expected transmission life period
with recovery of O&M and losses annual/monthly payments from Dow; and
4. Add “expiry” or “term” to clarify what happens after a certain date, i.e. re-application for
duplication avoidance tariff? Other?
Stakeholder Comments:
(3) Application Process, Timeline and Next Steps (Slides 34 – 39)
A. The AESO discussed the status of a number of 2018 ISO tariff application scope items
(Slide 36) and a 2018 ISO tariff tentative timeline.
Stakeholder Comments:
Additional Comments
Please return this form with your comments by March 17, 2017, to:
LaRhonda Papworth
Manager, Tariff Design
Email: [email protected]
Phone: (403) 539-2555
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