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    Tariff modernization

    Introduction – the case for change

    The ISO tariff is central to many on-going changes in the Alberta electricity industry. The wires costs required to be recovered through the ISO tariff have been increasing over the past decade with completed transmission reinforcements, while new technologies such as distributed energy resources and energy storage are changing the ways the transmission system is used. The current ISO tariff rate design needs to evolve and adapt to these changes. At the same time, consumers need clear and stable price signals to be provided by the ISO tariff so they can make effective business decisions. This requires a more modern approach to tariff rates, structure and processes to keep pace and adapt as required to a rapidly changing landscape. As such, the AESO is considering both the short-term and long-term as it evolves the design of the ISO tariff in order to:

    • send price signals to incent the efficient use of transmission infrastructure;
    • effectively reflect both the cost of transmission service and the value received from a connection to the transmission system;
    • provide clear and simple price signals to users of the transmission system;
    • be adaptable to changing conditions;
    • allow market participants to innovate and provide economic value to all of Alberta; and
    • evolve the ISO tariff in a manner that is effective, but minimally disruptive. 

    Tariff structure and process improvement

    The AESO’s intent with the tariff structure and process improvement activity is to work with key internal and external stakeholders to identify opportunities to simplify and modularize the ISO tariff structure and approval process, with the objectives of: increasing the efficiency of the regulatory process; making the ISO tariff more accessible; and making the tariff more adaptable to the ongoing transformation of Alberta’s electricity system. Changes to the ISO tariff content and/or structure identified through this improvement are expected to be implemented through the on-going modular tariff filings, where the AESO will propose improvements that align or are associated with other changes being proposed.

    Modular (phased) approach to tariff filing

    To promote a more agile and adaptable approach through this tariff evolution, the AESO has proposed to address changes to tariff provisions with the Commission using a modular approach as opposed to a comprehensive tariff filing. Following the 2018 ISO tariff compliance filing on Jan. 31, 2020 to the Commission, the intent is to file modules (phases) to meet Directions. The phases identified to address AUC Directions from Decision 22942-D02-2019 and their proposed filing dates include:

    • Phase 1: Bulk and Regional Rate Redesign (to be filed by June, 2021)
      • For additional information and stakeholder engagement opportunities for this initiative, please click here
    • Phase 2A: Point-of-delivery (POD) cost function, investment policy and optional facilities (to be filed by June 30, 2021)
    • Phase 2B: Criteria for system versus connection projects and “grey area” costs (to be filed by June 30, 2021)
    • Phase 3: Other Directions (Decision 22943) including power factor deficiency, contract level adjustment provisions, system access service request provisions, and relocation principles (to be filed by June 30, 2021)

    For details on each of these phases, please see the 2020-2021 Plan for ISO Tariff-Related Activities and schedule below.

    2020-2021 Plan for ISO Tariff-Related Activities

    The 2020-2021 Plan for ISO Tariff-Related Activities provides an overview of the ISO tariff-related activities that the AESO intends to progress and engage on in Q4 2020, and in 2021. The intent is to provide stakeholders with a consolidated view of the AESO’s 2020 and 2021 planned tariff-related activities for their information and planning purposes. Issues being addressed in the AUC’s Distribution System Inquiry or tariff implementation matters in ongoing ISO tariff-related AUC proceedings (e.g. 2019 DAR) are not included here. 

    2020-2021 ISO Tariff-Related Activities Schedule

    2020 2021 ISO Tariff Related Activities Plan Schedule FINAL Sept 14 2020

    Click here or the graphic above to view larger

    Stakeholder Comments on 2020-2021 Plan for ISO Tariff-Related Activities

    All stakeholder comments have been posted below as received. [Posted: Oct. 13, 2020]

    Materials

     

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