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    Loss factors

    During the transmission of electricity, some energy is “lost” from the transmission system, usually in the form of heat. This lost energy is known as transmission losses. The AESO recovers the cost of transmission losses from generating facilities and other services by establishing a percentage loss factor, for each generating facility or service, that reflects its location and contribution to transmission losses.

    The AESO must establish loss factors to reasonably recover the cost of transmission losses on the electric system in accordance with Section 31 of the Transmission Regulation. The AESO must determine loss factors for each location on the transmission system where system access service is provided to a generating facility, an export path, an import path, or an opportunity service.

    The requirements for determining loss factors are set out in Section 501.10 of the ISO rules, Transmission Loss Factors. Loss factors are determined in November of each year for the next calendar year. In addition, loss factors are adjusted each calendar quarter by a calibration factor to ensure that the actual cost of transmission losses is reasonably recovered on an annual basis.