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    Bulk and Regional Tariff Design

    The AESO sincerely thanks stakeholders for their involvement, contribution and feedback during the Bulk and Regional Tariff Design engagement. Over the course of 19 months, stakeholders shared their perspectives in eight engagement sessions, two technical information sessions, and one written consultation. This engagement was completed in October 2021.

    Engagement outcomes

    Your participation in this engagement was instrumental to the development of a new bulk and regional (B&R) rate design and a modernized Rate Demand Opportunity Service (DOS) design. Together, these rate designs will ensure that customers pay the costs that reflect their use of the transmission system going forward, which is particularly important as the interconnected electric system evolves to encompass new uses and technologies. A mitigation proposal will also be put forward in the application, in conjunction with the new B&R rate design, proposing a transition period for the most impacted customers.

    On Oct. 15, 2021, the AESO submitted its Bulk and Regional Rate Design and Modernized DOS Rate Design Application to the Alberta Utilities Commission (AUC). View our application.

    We encourage stakeholders and other interested parties to follow the AUC website at Apply or Access Applications (auc.ab.ca) for updates on the proceeding process. The proceeding number for our application is AUC Proceeding 26911.

    Purpose

    The purpose of this engagement is to work with stakeholders to redesign the ISO tariff to ensure rates appropriately and fairly recover the sunk costs of the current transmission system and send efficient price signals to guide investment and electricity consumption decisions. Specifically, the AESO is considering the monthly coincident peak (12-CP) bulk cost recovery methodology. The treatment of energy storage in the ISO tariff is also in scope for this engagement, as the chosen path for treatment can have interactions with rates for system cost recovery.

    Background

    The AESO has been engaging with stakeholders since early 2018 on bulk and regional rates to understand and analyze the issue of recovering sunk transmission costs through the 12-CP mechanism as directed by the Alberta Utilities Commission ("Commission") in the June 29, 2018 Ruling in Proceeding 22942: AESO 2018 ISO Tariff Application.

    Scope

    The scope of this engagement will be focused on the development of a tariff rate design for bulk and regional charges and will include tariff treatment of storage. The following topics are out-of-scope and will not be discussed as part of this engagement:

    • Participant-Related Costs for DFOs (Substation Fraction) and DFO Cost Flow-Through
    • Rates Update Applications
    • Other 2018 GTA Decision and Corresponding Compliance Filing Items
    • Adjusted Metering Practice implementation plan
    • Options or opportunities outside of the ISO tariff

    Stakeholder engagement and filing schedule

    • Session 1<br>March 13, 2020

       Session objectives

      • Present rate design options for bulk and regional cost recovery with rate objectives assessment
      • Provide rate design analysis tools
      • Review, respond to clarifying questions and collect initial input on options
    • Session 2<br>Sept. 24, 2020

      Session objectives

      • Review and gain acceptance on process and approach to complete a rate design
      • Understand current state rate design
      • Reconfirm tariff rate design objectives and balance of trade-offs
      • Understand rate design bookends
      • Identify initial implications of rate design bookends
      • Understand energy storage treatment options and considerations
      • Provide technical clarity around rate design bookends
    • Tech. Session I<br>Oct. 14, 2020

      Session objectives

      • Ensure stakeholders understand the mechanics of the rate bookends
      • Enable stakeholders to evaluate the impacts of the rate bookends on their sites
      • Assist stakeholders in assessing the materiality of changes to their invoices
      • Ensure stakeholders are equipped to present and/or understand rate design options at the Oct. 22, 2020 stakeholder session
    • Session 3<br>Nov. 5, 2020

      Session objectives

      • Stakeholders to present and discuss alternative rate design options, including energy storage options and implications
      • Understand which rate design options stakeholders support and why
    • Session 4 <br>Dec. 10, 2020

      Session objectives

      • Understand common themes across stakeholder rate design proposals and the AESO rate design bookends
      • Understand areas of agreement and disagreement and why
      • Introduce mitigation conversation to foster/build understanding
    • Session 5<br>March 25, 2021

      Session objectives

      • Present preferred rate design, including energy storage treatment, to stakeholders
      • Present and discuss path to achieving minimal disruption
      • Present bill impact summary and assumptions
      • Provide Bill Impact Tool
      • Begin to discuss implementation considerations
    • Tech. Session II<br> March 31, 2021

      Session objectives

      • Review how to use the Bill Impact Tool in order to:
        • Enable stakeholders to evaluate the impacts of the rate design and mitigation on their sites; and
        • Enable stakeholders to assess the materiality of changes to their invoices
      • Respond to stakeholder questions
    • Targeted Mitigation <br>March-June 2021<br>

      Targeted mitigation engagement purpose and objectives

      The AESO's overall purpose of this targeted mitigation engagement is to work with the stakeholders most heavily impacted (“impacted parties”) by the preferred Bulk and Regional Tariff rate design to identify a path to a minimally disruptive transition to the new rate design. The impacted parties are those with an estimated transmission cost impact of greater than 10 per cent increase under the AESO's preferred tariff redesign.

      The AESO's specific objectives of this engagement include:

      • Reach a shared agreement on a temporary mitigation option that supports ‘a path to minimal disruption’
      • Engage efficiently and actively at the table to progress conversations forward
      • Achieve regulatory efficiency in the resulting AUC proceeding by putting forward a solution that is acceptable to all or most of the impacted parties, the AESO and the broader stakeholder group
    • Session 5B (DOS)<br>May 20, 2021<br>

      Session purpose and objectives

      The purpose of this session is to engage stakeholders in a discussion of the AESO’s demand opportunity service (DOS) modernization recommendation to allow expanded eligibility (e.g., energy storage). The specific objectives include:

      • Present additional background on the AESO’s DOS – what it is, the service it provides and how it operates today
      • Share our learnings on DOS modernization stakeholder feedback
      • Present and discuss the AESO’s DOS modernization recommendation for the purpose of seeking stakeholder feedback on the recommendation
    • Session 6A<br>June 3, 2021<br>

      Session purpose and objectives

      The purpose of this session is to engage stakeholders in a discussion of Session 5 stakeholder feedback or follow-up and key questions raised by the Alberta Utilities Commission (AUC) staff, and to provide additional clarity and build mutual understanding of the AESO’s preferred rate design and stakeholder concerns. The specific objectives include:

      • Share our learnings on Session 5 stakeholder feedback or follow-up
      • Present and seek stakeholder input on additional information on preferred rate design, including analysis of the potential response to the incentives provided in the rate design
      • Present responses to key questions raised by AUC staff
      • Seek to understand outstanding stakeholder concerns
    • Session 6B<br>June 24, 2021

      Session purpose and objectives

      The purpose of the session is to engage stakeholders in a discussion of the AESO’s targeted mitigation discussion outcomes, Session 5B (DOS) and Session 6A stakeholder feedback, and areas of alignment. The specific objectives include:

      • Provide an overview and seek stakeholder input on the outcomes of the targeted mitigation engagement
      • Share our learnings and seek stakeholder input on Session 5B (DOS) and Session 6A stakeholder feedback and areas of alignment
      • Present and discuss implementation considerations
      • Seek to understand outstanding stakeholder concerns
    • Rate Sheets <br>Sept. 7-21, 2021<br>

      Purpose

      The purpose of the written consultation is to seek stakeholder input on the clarity and effectiveness of the proposed drafts of the following Bulk and Regional Preferred Rate Design tariff components:

      • Tariff Rate Sheets
      • Demand Opportunity Service (DOS) Rate Sheet
      • Tariff Terms and Conditions
      • DOS Proforma Agreement
    • Engagement Survey<br>Sept. – Oct. 2021

      Purpose

      The purpose of the survey is to seek stakeholder input on the overall Bulk and Regional Tariff Design engagement process to guide the AESO as we continuously work to improve how we engage stakeholders to ensure our approach allows stakeholders’ needs and interests to be consistently, transparently and meaningfully considered.

    • B&R Application<br>Oct. 15, 2021

      The AESO will file its Bulk and Regional Tariff Application with the Alberta Utilities Commission (AUC) putting forward its preferred rate design and DOS modernization on or before Oct. 15, 2021.

    • Engagement Survey

      Purpose

      The purpose of the survey is to seek stakeholder input on the overall Bulk and Regional Tariff Design engagement process to guide the AESO as we continuously work to improve how we engage stakeholders to ensure our approach allows stakeholders’ needs and interests to be consistently, transparently and meaningfully considered.

      Stakeholder comments

      We value stakeholder input, and we thank you for sharing your insights on the Bulk and Regional Tariff Design engagement process with us.

      Engagement survey materials

    • Rate Sheets | Sept. 7-21, 2021

      Purpose

      The purpose of this written consultation is to seek stakeholder input on the clarity and effectiveness of the proposed drafts of the following Bulk and Regional Preferred Rate Design tariff components:

      • Tariff Rate Sheets
      • Demand Opportunity Service (DOS) Rate Sheet
      • Tariff Terms and Conditions
      • DOS Proforma Agreement

      The proposed drafts are blacklined indicating revisions to incorporate proposed changes from the AESO’s Preferred Rate Design and/or the Modernized DOS design.

      Note that the AESO is seeking feedback as to whether the rate sheets and other revisions to the ISO Tariff are clear and effectively reflect the AESO's Preferred Rate Design and the Modernized DOS design as presented during Stakeholder Sessions 5, 5B (DOS), 6A and 6B. The AESO appreciates all of the feedback it has previously received regarding the Preferred Design and Modernized DOS and will not be considering additional comments on the rate design at this time.

      The AESO has not included actual values in the "Charge" column of the rate sheets as rates (or charges) to be effective in the future (potentially January 1, 2024) would be imprecise and should result from an ISO tariff update application. For example, a 2024 ISO tariff update reflecting an applied for or approved revenue requirement and up-to-date billing determinant forecast would include rate sheets with actual rates or charges. In order to provide information regarding future rates to stakeholders, the AESO has posted the Estimating Rate Calculations Tool with estimation-level accuracy of future rates under a new tariff design.

      Stakeholder comments

      We value stakeholder feedback, and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Rate Sheets in the materials section below. 

      Rate sheet materials

    • Additional Information on Preferred Rate Design

      Based on stakeholder feedback, the AESO continues to release additional information relating to the AESO’s preferred rate design. Further, we continue to consider other questions and requests we have received to determine whether and when additional information should be shared.

      Recently added or updated information:

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us. View all stakeholder comments received on updated rate estimates in the materials below.

      Additional preferred rate design materials

    • Session 6B | June 24, 2021

      Session purpose and objectives

      The purpose of the session is to engage stakeholders in a discussion of the AESO’s targeted mitigation discussion outcomes, Session 5B (DOS) and Session 6A stakeholder feedback, and areas of alignment. The specific objectives include:

      • Provide an overview and seek stakeholder input on the outcomes of the targeted mitigation engagement
      • Share our learnings and seek stakeholder input on Session 5B (DOS) and Session 6A stakeholder feedback and areas of alignment
      • Present and discuss implementation considerations
      • Seek to understand outstanding stakeholder concerns

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Session 6B as well as stakeholder comments received on the updated rate estimates in the materials below. 

      Session 6B materials

    • Session 6A | June 3, 2021

      Session purpose and objectives

      The purpose of this session is to engage stakeholders in a discussion of Session 5 stakeholder feedback or follow-up and key questions raised by the Alberta Utilities Commission (AUC) staff, and to provide additional clarity and build mutual understanding of the AESO’s preferred rate design and stakeholder concerns. The session objectives include:

      • Share our learnings on Session 5 stakeholder feedback or follow-up
      • Present and seek stakeholder input on additional information on preferred rate design, including analysis of the potential response to the incentives provided in the rate design
      • Present responses to key questions raised by AUC staff
      • Seek to understand outstanding stakeholder concerns

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us. View all stakeholder comments received on Session 6A in the materials below.

      Session 6A materials

    • Session 5B (DOS) | May 20, 2021

      Session purpose and objectives

      The purpose of this session is to engage stakeholders in a discussion of the AESO’s demand opportunity service (DOS) modernization recommendation to allow expanded eligibility (e.g., energy storage). The session objectives include:

      • Present additional background on the AESO’s DOS – what it is, the service it provides and how it operates today
      • Share our learnings on DOS modernization stakeholder feedback
      • Present and discuss the AESO’s DOS modernization recommendation for the purpose of seeking stakeholder feedback on the recommendation

      Stakeholder comments 

      We value stakeholder feedback and we thank you for sharing your perspectives with us. View all stakeholder comments received on Session 5B (DOS) in the materials below.

      Session 5B (DOS) materials 

    • Targeted Mitigation Engagement

      Overall engagement purpose and objectives

      The AESO's overall purpose of this targeted mitigation engagement is to work with the stakeholders most heavily impacted (“impacted parties”) by the preferred Bulk and Regional Tariff rate design to identify a path to a minimally disruptive transition to the new rate design. The impacted parties are those with an estimated transmission cost of greater than 10 per cent increase under the AESO's preferred rate design. This is an opportunity to work together to minimize impacts and reach an agreement that is acceptable to all or most of the impacted parties in advance of an Alberta Utilities Commission (“AUC”) proceeding. The outcomes of this targeted engagement will be tested by the AUC, who will make a decision on the overall rate design and any agreements on mitigation that are reached through this engagement process.

      The AESO's specific objectives of this targeted mitigation engagement include:

      • Reach a shared agreement on a temporary mitigation option that supports ‘a path to minimal disruption’
      • Engage efficiently and actively at the table to progress conversations forward
      • Achieve regulatory efficiency in the resulting AUC proceeding by putting forward a solution that is acceptable to all or most of the impacted parties, the AESO and the broader stakeholder group

      Scope

      The scope of this engagement will be focused on the development of an acceptable mitigation option that supports a minimally disruptive transition path to the new rate design. The following topics are out-of-scope and will not be discussed as part of this targeted engagement:

      • Need for change to the ISO tariff rate design
      • The AESO’s preferred rate design and alternatives
      • Options or opportunities outside of the ISO tariff
        • Reductions to revenue requirement
        • Legislative changes
        • Other government actions

      Approach

      We will engage impacted parties at roundtable discussions to develop the mitigation option(s) that delivers the best holistic outcomes for all stakeholders. The artifact that will be developed at the end of this engagement is a Memorandum of Agreement (MOA) that will be presented to the broader stakeholder group and the AUC as part of the formal Bulk and Regional Tariff Application.

      Confidentiality

      Organization identities (participating impacted parties) will not be disclosed during the course of the targeted mitigation engagement. The AESO will include the names of all participating parties in its application to the AUC, whether or not an agreement is reached.

      Transparency and reporting back publicly

      The AESO will publish a summary of its initial 1:1 meetings with impacted parties, a status report halfway through the targeted engagement and a summary at the conclusion of the targeted engagement. 

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us. View all stakeholder comments received on the Targeted Mitigation Status Report in the materials below.

      Materials

      • Summary | Targeted Mitigation Engagement [Posted: June 17, 2021]
      • Stakeholder Comments | Targeted Mitigation Status Report [Posted: May 20, 2021]
      • Comment Matrix | Targeted Mitigation Status Report [Posted: May 4, 2021]
      • Summary | Targeted Mitigation Status Report [Posted: May 4, 2021]
      • Summary | Targeted Mitigation 1:1 Meetings [Posted: April 22, 2021]
    • Technical Session II | March 31, 2021

      Session purpose and objectives

      The purpose of this technical information session is to help ratepayers understand the impacts of the preferred rate design presented by the AESO on March 25, 2021 on their invoices.

      The session objectives include:

      • Review how to use the Bill Impact Tool in order to:
        • Enable stakeholders to evaluate the impacts of the rate design and mitigation on their sites; and
        • Enable stakeholders to assess the materiality of changes to their invoices
      • Respond to stakeholder questions

      Technical information session || materials

    • Session 5 | March 25, 2021

      Preferred rate design published

      The AESO has released its preferred rate design and Bill Impact Tool. Our design provides a strong foundation for the future. It creates stability for businesses investing in the province while supporting the ongoing transformation of Alberta’s electricity system. We believe our design strikes the right balance moving forward by more appropriately allocating costs to better reflect a customer’s use of the system, putting the appropriate long-term signals in place, and providing for a transition path of minimal disruption.

      Energy storage tariff treatment still has some outstanding questions to explore before we make our recommendation. We will be seeking stakeholder input on these questions, including demand opportunity service (DOS) questions.

      Questions from AUC staff

      On April 7, 2021, following Session 5, the AESO received correspondence and list of questions from Alberta Utilities Commission (AUC) staff regarding the preferred Bulk and Regional Tariff rate design. The AESO appreciates the opportunity to consider the AUC staff questions as part of its stakeholder engagement and is of the view that this will bring efficiencies to the overall regulatory process. Please click here to view the letter and list of questions.

      Session purpose and objectives

      The purpose of this session is to present and discuss the AESO’s preferred rate design. The session objectives include:

      • Present preferred rate design, including energy storage treatment, to stakeholders
      • Present and discuss path to achieving minimal disruption
      • Present bill impact summary and assumptions
      • Provide Bill Impact Tool
      • Begin to discuss implementation considerations

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Session 5 in the materials below.

      Session 5 materials

    • Session 4 | Dec.10, 2020

      Session purpose and objectives

      The purpose of this session is to build shared understanding of common themes between the proposals and the rate design bookends, and areas of agreement and disagreement.

      The session objectives include:

      • Understand common themes across stakeholder rate design proposals and the AESO rate design bookends
      • Understand areas of agreement and disagreement and why
      • Introduce mitigation conversation to foster/build understanding

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Session 4 in the materials below.

      Session 4 materials 

    • Session 3 | Nov. 5, 2020

      Session purpose and objectives

      The purpose of this session is for stakeholders to propose rate design option alternatives. 

      The session objectives include:

      • Stakeholders to present and discuss alternative rate design options, including energy storage options and implications
      • Understand which rate design options stakeholders support and why

      Stakeholder proposals & evaluations

      The AESO thanks all stakeholders who provided alternative rate design option proposals and evaluations. View all stakeholder proposals as well as stakeholder evaluations in the materials below.

      Session 3 materials

    • Technical Session I | Oct. 14, 2020

      Session purpose and objectives

      The purpose of this technical information session is to help ratepayers understand the impacts of the rate design bookends presented by the AESO on Sept. 24, 2020 (the “rate bookends”) on their invoices. The AESO will provide technical information and answer questions to enable continued dialogue regarding the rate bookends at future stakeholder sessions. 

      The session objectives include:

      • Ensure stakeholders understand the mechanics of the rate bookends;
      • Enable stakeholders to evaluate the impacts of the rate bookends on their sites;
      • Assist stakeholders in assessing the materiality of changes to their invoices; and
      • Ensure stakeholders are equipped to present and/or understand rate design options at the Oct. 22, 2020 stakeholder session

      Technical session materials

    • Session 2 | Sept. 24, 2020

      Purpose and session objectives

      The purpose of this session is to re-engage in discussions on the bulk and regional tariff design. The session objectives include:

      • Review and gain acceptance on process and approach to complete a rate design
      • Understand current state rate design
      • Reconfirm tariff rate design objectives and balance of trade-offs
      • Understand rate design bookends
      • Identify initial implications of rate design bookends
      • Understand energy storage treatment options and considerations
      • Provide technical clarity around rate design bookends

      Stakeholder comments 

      We value stakeholder feedback and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Session 2 as well as stakeholder comments received on the proposed agenda in the materials below.

      Session 2 materials 

    • Session 1 | March 13, 2020

      Purpose of this session

      The purpose of this session is to:

      • Present work that has been completed-to date including Rate Design Objectives along with the AESO’s analysis;
      • Provide AESO rate design options to stakeholders with Rate Design Objectives analysis; and
      • Respond to questions and gather initial feedback from stakeholders on work-to-date including rate design options, Rate Design Objectives analysis, impact and issues.

      Stakeholder comments

      We value stakeholder feedback and we thank you for sharing your perspectives with us.  View all stakeholder comments received on Session 1 as well as stakeholder comments received on the proposed agenda in the materials below.

      Session 1 materials

    For information on the Tariff Design Advisory Group (TDAG) which was disbanded in January 2020 please click here.

    If you have any other questions, please contact tariffdesign@aeso.ca and subscribe to our stakeholder newsletter for updates.

    Bulk and Regional Tariff Design