Capacity Market Regulation Feedback Form

Transcription

1 Capacity Market Regulation Feedback Form ] 1. Name of Company or Organization Cities of Lethbridge and Red Deer 8/7/18 10:45:41 AM MDT 2. Alberta Energy intends to post all of the feedback received from stakeholders on its website. This provides transparency in the engagement process. Please check here if your organization does not wish to have your organization's feedback posted. 3. Should there be other AESO decisions that are subject to the abbreviated complaint process other than those listed above? If yes, please indicate what other capacity market complaints should be included. Please provide a rationale for your answer. 4. Do you agree with the level of MSA involvement proposed for this process? If no, please provide additional input in the next question. 5. If you answered no to Question 4, please indicate which statement most reflects your rationale.

2 6. Do you think that the documentation that would be submitted to the AUC for consideration of a complaint is appropriate, given the minimal time available to resolve these disputes? If no, please indicate what evidence you believe would be most valuable to assist in the resolution of these disputes. 7. To facilitate the implementation of the capacity market, certain aspects of the energy and ancillary services (EAS) markets will be evolved. Given this, do you believe a similar, abbreviated dispute resolution process is needed for electricity market disputes? If yes, please indicate what disputes would require an abbreviated process. Please provide a rationale for your answer. 8. Do you have any further comments on the regulatory concepts for dispute resolution? (3,000 character limit) No 9. Overall, do the proposed regulatory concepts adequately establish the resource adequacy standard? If you do not believe them to be adequate, please explain what additional aspects are needed. 10. Should loss of load be defined in the regulation? Please provide your rationale.

3 11. Is the requirement for annual reporting from the AESO appropriate? 12. If you answered no to question 11 please indicate what, if any, would be a more appropriate reporting method? Please provide a rationale for your answer. 13. Do you have any further comments on the proposed regulatory concepts for the resource adequacy standard? (3,000 character limit) No 14. Overall, do the proposed regulatory concepts provide adequate guidance to the AESO with regards to the development and implementation of the Weighted Energy Method? If no, what additional guidance or alternative concepts are required? Please provide rationale for your responses. The cities consider the DOE s stated principles to be reasonable in that they identify an overall intent while providing some flexibility for the regulator to ensure capacity costs are fairly recovered from enduse customers. 15. Do the proposed regulatory concepts provide adequate guidance to distribution system owners with regards to cost recovery? If no, what additional guidance is required? Please provide the rationale for your response. The cities principle concern is that capacity costs are recovered in a fair manner: specifically that individual customers who contribute to the need for system capacity even if only as a backup to on

4 site generation cannot avoid 100% of the cost by reducing or eliminating consumption during a small number of hours. The proposed guidance is specific but flexible enough for the distribution utility to propose a fair method of cost recovery to it s regulator. 16. Are there any barriers for distribution system owners to treat the costs of the capacity market as flow through costs to enduse consumers? Please provide the rationale for your response. There are no new or additional barriers that prevent distribution utilities from flowing through capacity costs. The barrier that has always existed is that a large segment of the customer base may only be cumulatively metered and that the utility s only practical options for billing these customers is a fixed monthly charge and/or a per kwh charge for all kwh consumed in the billing period. Arguably, virtually none of the distribution utility s input costs vary with either of these measures, but this has not prevented utilities and their regulators from developing a just and reasonable distribution tariff. Provided that the draft regulation is not overly prescriptive, existing regulatory processes and generally accepted ratemaking practices are equipped to give full consideration of how best to (i) fairly allocate or attribute capacity costs to rate classes, and (ii) fairly recover the allocated costs from each member of the rate class given metering and billing constraints. If this process determines that material billing system changes are required, part of this consideration will be possible interim solutions and an allowance of a reasonable amount of time to enact and test billing system changes. It is possible that such considerations might be necessary to ensure that customers are not unintentionally harmed by billing errors or bills that are confusing and difficult to understand. 17. What terminology do distribution system owners use to define and distinguish enduse consumers with interval meters, who are billed on their individual consumption, from enduse consumers who are billed on a deemed load profile and may have cumulative meters? Is this information currently used to allocate portions of the ISO tariff to these two different types of consumers? The cities distribution utilities and rate bylaws identify rate classes, each with a set of requirements and specifications for a customer to qualify for that rate class. One of the requirements indicated within a rate class definition is the type of meter. Business practices concerning profiling, cost allocation methods, and billing typically follow from the type of meter. Because rate class definitions differ slightly between distribution utilities, the cities do not recommend that the draft regulation be any more prescriptive than what is contained within the DOE s policy paper. The cities submit that it is sufficient to simply state a principle that distribution utilities should flow through capacity costs as accurately and as reasonably as possible with due regard for existing technological and cost constraints. Constraints do evolve with time and what might not be practical today may be more easily achieved in the future. The existing regulatory process is capable of openly and transparently addressing this issue. 18. What are possible barriers for distribution system owners to apply the costs of the capacity market, in a manner that reflects the dollar per megawatt hour rates resulting from the weighted

5 energy method approved in the ISO tariff and charges all consumers reasonably for the portion of this cost they have incurred? Please see the cities response to Question Do you have any further comments on the regulatory concepts for cost allocation in the Capacity Market Regulation? (3000 character limit) The cities note that the DOE s discussion paper inappropriately generalizes that the AUC reviews and approves the recovery of current transmission costs for all distribution utilities. The cities trust that a draft regulation will appropriately reference distribution utility regulators in a manner that is consistent with and respectful of Section 102 of the Electric Utilities Act. To reiterate, the cities agree that the draft regulation should provide guiding principles for the utility regulator to consider when approving a distribution tariff, including the passthrough of transmission and capacity costs. However, the regulation should be drafted in such a manner as to respect municipal authority to approve distribution tariffs under the conditions specified in the Electric Utilities Act.