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    Participant-Related Costs for DFOs (Substation Fraction) and DFO Cost Flow-Through Technical Session(s)

    For information regarding specific Technical Session(s) engagements please click here.


    On Jan. 15, 2020, the Alberta Utilities Commission (AUC) approved the AESO’s request, in Proceedings 25101 and 25102, to hold one or more technical session(s) regarding:

    (i)     the AESO’s “substation fraction formula”, as it relates to the allocation of costs to services being obtained by a single market participant such as a distribution facility owner (DFO), and

    (ii)     the DFO flow-through of transmission costs to distribution-connected generation (DCG).

    The AESO is commencing this work with notice to interested stakeholders. As part of this stakeholder engagement, the AESO intends to engage with stakeholders regarding the issues to be examined and the action items to be undertaken, to achieve a joint proposal with stakeholders regarding a path forward, and the joint proposal, if achieved, or individual proposals, would then be filed with the AUC for consideration and determination of next steps.

    High-level overview of the proposed process:

    • Session 1<br>Feb. 27, 2020

      Session objectives

      • Clarify intent and understanding of participant-related costs for DFOs (Substation Fraction) and DFO cost flow-through
      • Review and collect input on high-level principles
    • Session 2A<br>May 14, 2020

      Session objectives

      • Review high-level principles
      • Summarize learnings from Feb 27 session
      • Presentations of stakeholder proposals for participant-related costs for DFOs (Substation Fraction) and DFO cost flow-through



    • Session 2B<br>May 28, 2020

      Session objectives

      • Summarize learnings from May 14 session
      • Group discussion on evaluation of proposals for participant-related costs for DFOs (Substation Fraction) and DFO cost flow-through
    • Session 3<br>June 25, 2020

      Session objectives

      • Presentation and discussion of the AESO proposal details
      • Share process for preparation of report for the AUC


    Note: Session dates once finalized will be shared with stakeholders. Additionally, stakeholders will have opportunities to provide written feedback through comment matrices issued at certain points in the process.

    Objectives for this engagement

    As the AESO noted in its Dec. 16, 2019 submission to the AUC, the objectives of the technical session(s) include facilitation of:

    (i)     a common understanding of the purpose and application of the substation fraction formula;

    (ii)    agreement on high-level principles applicable to the substation fraction formula including, for instance, cost certainty for DCG, parity between transmission-connected generation and distribution connected generation (DCG) regarding participant-related costs, and certainty for DFOs regarding the flow-through of costs to be attributed to DCG; and

    (iii)   a common understanding of the financial impacts associated with the substation fraction and any associated flow-through of participant-related costs to different stakeholder groups, including DCG, TCG, DFOs, and ratepayers.

    Out-of-scope for this engagement

    The following topics are out-of-scope and will not be discussed as part of the technical session(s):

    • Bulk and Regional Rate Tariff Design
    • Treatment of Energy Storage in ISO Tariff
    • 2020 Rates Update
    • Other 2018 GTA Decision and Corresponding Compliance Filing Items

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