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Decision 2013-421 Alberta Electric System Operator

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Decision 2013-421 Alberta Electric System Operator Decision 2013-421 Alberta Electric System Operator 2014 ISO Tariff Application and 2013 ISO Tariff Update Negotiated Settlement – Cost Causation Study November 27, 2013 Alberta Utilities Commission Decision 2013-421: Alberta Electric System Operator AESO 2014 ISO Tariff Application and 2013 ISO Tariff Update Negotiated Settlement – Cost Causation Study Application No. 1609765 Proceeding ID No. 2718 November 27, 2013 Published by Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street SW Calgary, Alberta T2P 3L8 Telephone: 403-592-8845 Fax: 403-592-4406 Web site: www.auc.ab.ca Contents 1 Introduction and background .............................................................................................. 1 2 Discussion ............................................................................................................................... 2 3 Commission findings ............................................................................................................. 4 3.1 Commission considerations in assessing the settlement agreement .............................. 4 3.2 Fairness of the negotiated settlement process ................................................................ 6 3.3 Just and reasonable rates and public interest considerations ......................................... 7 3.4 Is the settlement agreement patently against the public interest or contrary to law? ..... 7 4 Order ...................................................................................................................................... 7 Appendix 1 – Proceeding participants ........................................................................................ 9 Appendix 2 – Negotiated settlement agreement ....................................................................... 13 AUC Decision 2013-421 (November 27, 2013) • i Alberta Utilities Commission Calgary, Alberta Alberta Electric System Operator Decision 2013-421 2014 ISO Tariff Application and 2013 ISO Tariff Update Application No. 1609765 Negotiated Settlement – Cost Causation Study Proceeding ID No. 2718 1 Introduction and background 1. On July 17, 2013, the Alberta Electric System Operator (AESO) filed an application with the Alberta Utilities Commission (AUC or Commission) regarding the AESO 2014 ISO (Independent System Operator) Tariff application and the AESO 2013 ISO Tariff Update. The Commission issued an alert of notice and a notice of application on July 19, 2013. The notice of application invited those who wished to participate in this proceeding to file a statement of intent to participate (SIP) with the Commission by 2 p.m., August 2, 2013. 2. On July 24, 2013, the AESO filed an invitation to interested parties and stakeholders to attend two technical sessions. A general technical meeting was proposed for the afternoon of August 8, 2013, for the first session and a cost causation technical meeting was proposed for the afternoon of August 15, 2013 for the second session. The cost causation technical meeting was subsequently rescheduled to August 19, 2013. The AESO provided notice of this schedule change to parties through its correspondence of July 25, 2013 (Exhibit 28.01). 3. The Commission, by letter dated August 13, 2013, established separate process schedules for the two components of the application: the AESO 2013 ISO Tariff Update and the AESO 2014 ISO Tariff. 4. With respect to the 2014 AESO ISO Tariff, the Commission established a schedule which enabled parties to provide information requests (IRs) to the AESO by September 4, 2013. Responses to the IRs were due from the AESO by September 18, 2013. 5. On August 29, 2013, the AESO submitted a letter to the Commission requesting approval to commence a negotiated settlement process pertaining to the Alberta Transmission System Cost Causation Study (2014-2016 cost causation study) pursuant to AUC Rule 018: Rules on Negotiated Settlements (Rule 018). 6. The AESO stated that there appeared to be limited issues raised to date with respect to the 2014-2016 cost causation study, but recognized that participants to the proceeding would like to further test the study. The AESO identified the following three issues that it believed could be resolved through a negotiated settlement process: (a) the functionalization of transmission capital costs into bulk system, regional system, and point of delivery functions; (b) the functionalization of transmission operating and maintenance costs into similar functions; and AUC Decision 2013-421 (November 27, 2013) • 1 AESO 2014 ISO Tariff Application and 2013 ISO Tariff Update Negotiated Settlement – Cost Causation Study Alberta Electric System Operator (c) the classification of bulk system and regional system costs into demand-related and energy-related components. 7. Rate design matters, terms and conditions and the point of delivery cost function were not proposed by the AESO to be included in the negotiated settlement process (NSP). 8. The Commission approved the AESO’s request to enter into a NSP in Decision 2013-3401 subject to the conditions2 set out at page 4 of that decision. 9. On September 30, 2013, the AESO provided an update on the status of its NSP.3 The AESO stated that as the Commission had granted extensions to the deadline for the AESO’s responses to information requests, the initial meeting for the NSP had not yet occurred. The AESO submitted that it would provide a further update to the Commission on or before October 31, 2013, including whether a formal application requesting approval of the 2014-2016 cost causation study may be expected. 10. On October 16, 2013, the Commission advised the AESO that it was not prepared to extend the dates for the NSP beyond October 31, 2013 and, if a settlement was reached on or before that date, the AESO was directed to file a formal application on the record of this proceeding requesting approval of the 2014-2016 cost causation study by no later than November 7, 2013.4 11. On November 7, 2013, the AESO filed an application5 for approval of the 2014-2016 Cost Causation Negotiated Settlement Agreement6 (NSA). No further process was directed by the Commission.7 2 Discussion 12. The AESO submitted that the settlement agreement is unanimously supported and has been executed by all participants in the negotiated settlement process and that no issues in 1 Decision 2013-340:Alberta Electric System Operator, 2014 ISO Tariff Application and 2013 ISO Tariff Update – Request to Enter into a Negotiated Settlement Process, Application No. 1609765, Proceeding ID No. 2718, September 10, 2013 2 The request to enter into a negotiated settlement process (NSP) was approved by the Commission subject to: 1. The scope of the negotiated settlement be limited to issues related to the 2014-2016 cost causation study. 2. The AESO shall provide notice of the schedule for the NSP by email to all parties registered in this proceeding. 3. The AESO shall advise the Commission on or before September 30, 2013 on the status of the NSP and whether a formal application requesting approval of the 2014-2016 cost causation study may be expected. 4. If a negotiated settlement agreement on all issues cannot be reached, the AESO shall submit to the Commission, on behalf of the parties to the NSP a list of issues that are agreed upon and a list of those issues that remain in dispute. 3 Exhibit 108.01. 4 Exhibit 116.01, paragraph 4. 5 Exhibit 120.02. 6 Exhibit 120.03 plus appendices A through E (exhibits 120.04 to 120.08). 7 Exhibit 135.01. 2 • AUC Decision 2013-421 (November 27, 2013) AESO 2014 ISO Tariff Application and 2013 ISO Tariff Update Negotiated Settlement – Cost Causation Study Alberta Electric System Operator respect of the 2014-2016 cost causation study remain in dispute.8 More specifically, Section 3 (settlement brief) of the NSA, stated: The AESO considers that the settlement agreement reached with participants9 and filed for approval in this Application provided an efficient and effective resolution of issues related to cost causation in the AESO’s 2014 ISO tariff application. By providing an alternative to the traditional hearing process that resulted in an efficient and effective resolution of issues, the settlement agreement satisfies the public interest. In addition, the participants in the negotiated settlement process provided broad and varied representation of stakeholders. The settlement agreement was unanimously supported by all participants in the process and is unopposed by any other party. The AESO submits these facts further support the settlement agreement being in the public interest. As required by Section 6(1) of AUC Rule 018, paragraph 15 of the settlement agreement provides a representation that no party has withheld relevant information. Consistent with the conditions included in Decision 2013-340, the settlement agreement includes only issues related to the 2014-2016 cost causation study. No issues in respect of the 2014-2016 cost causation study remain unresolved among the participants in the negotiated settlement process. Based on the entirety of this application, the AESO submits that the settlement process was conducted in a fair and open manner and that the settlement agreement reasonably resolves issues related to the 2014-2016 cost causation study and is in the public interest. 8 Exhibit 120.01. 9 Participants and signatories to the NSA include: Alberta Direct Connect Consumers Association AltaLink Management Ltd. ATCO Electric Ltd. Consumers’ Coalition of Alberta Dual Use
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