AESO 2005-2006 GTA Refiling Technical Meeting on Direction 6 Response Agenda

AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
AESO 2005-2006 GTA Refiling
Technical Meeting on Direction 6 Response
John Martin, Regulatory
Stakeholder Presentation
October 26, 2005 — Calgary
Agenda
● Discussion limited to $/month POD charge
● Background to refiling and supplemental response
● Review of POD data
● Preliminary responses to EUB Information
Requests
● Process and options
● Questions
● Next steps
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AESO Stakeholder Meeting
1
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
Original Direction 6
● Contained in Decision 2005-096 issued by EUB on
August 28, 2005
● Direction 6 stated (in part):
“Levy a customer-related POD charge, as
suggested in the TCCS [Transmission Cost
Causation Study]”
● AESO interpreted “POD charge” as it is defined
and used in its tariff
● AESO submitted refiling on September 27, 2005
noting concerns about $/month component of
POD charge
3
Interpretation of “POD Charge”
● POD is defined in tariff and is basis for DTS
contracts and DTS billing of customers
● POD equates to DTS contract
● POD equates to settlement point for billing
● Evidence provided during GTA proceeding was
consistent with POD as defined above
● Bill impact calculation included in EUB decision
applied full POD charge at dual-use site
● No parties (to AESO’s recollection) argued for
application of DTS-STS or equivalent ratio to POD
charge during 2006 GTA proceeding
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AESO Stakeholder Meeting
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AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
EUB Clarification
● On October 20 the EUB clarified their intent that
the $/month component apply on a substation, not
POD, basis:
“…the new customer charge component of the
DTS rate ordered in Direction 6 would be
apportioned amongst the customers served by a
particular POD rather than applied in full to each
customer served by that POD”
5
Concerns Expressed to AESO
● Bill impact
● Small single DTS PODs (DISCO-served)
● Multiple DTS PODs
● Dual-use (DTS and STS) PODs
● Isolated generation sites (DISCO-served)
● Misalignment with costs
● Customer-owned substations
● PODs receiving Primary Service Credit
● “Changing of rules”
● Inability to respond to new rate structure
● Customers terminating service
AESO Stakeholder Meeting
6
3
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
AESO Response
● AESO identified concerns with $/month charge in
September 27 refiling
● Additional discussions with customers and further
review convinced the AESO the $/month charge
as refiled was problematic
● No immediate solution was apparent
● No time existed for stakeholder consultation
● AESO therefore decided to provide a
supplemental response, in a manner similar to the
alternative response provided to Direction 5A but
without public stakeholder consultation
7
$/Month Component Proposals
● In AESO’s September 27 refiling:
● $18,648.00/month at each Point of Delivery
● In AESO’s October 7 supplemental response:
● $4,252.00/MW for Billing Capacity less than 5 MW, or
● $21,260.00/month for Billing Capacity 5 MW or greater
● In response to EUB’s October 20 clarification:
● $22,144.00/month × Substation Fraction at each Point of
Delivery
DTS Capacity
Sub Fraction =
∑ All DTS and STS Capacities at Substation
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AESO Stakeholder Meeting
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AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
No Clear Winner
● No proposal addresses all concerns
● New rate needs to be implemented on January 1
● Time needed for implementation in AESO’s billing
system
● AESO believes rate for 2006 should be approved
on a final basis, with further refinement occurring
as part of 2007 GTA development
● What should 2006 rate be?
● How does EUB determine what to approve?
● What further process is required?
9
Background Data
● AESO has 480 DTS Points of Delivery
● AESO has 450 substations serving DTS PODs
● After applying Substation Fractions, AESO has
406 “equivalent” substations serving DTS PODs
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AESO Stakeholder Meeting
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AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
Data Category Definitions
● In response to EUB clarification and IRs
● AESO-served direct connected PODs: served at
transmission voltage and billed by AESO
● DISCO-served direct connected PODs: served at
transmission voltage and billed by DISCO
● DISCO-served distribution PODs: served at distribution
voltage and billed by DISCO
● Dual-use: at least one DTS POD and at least one STS
POS at same substation
● Multi-DTS: at least two DTS PODs and no STS POS at
same substation
● Single DTS: one DTS POD at substation
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AESO-Served Direct Connected
PODs
Dual-Use
Less Than 5 MW
Number of PODs
17
Average Capacity
0.9 MW
Average Load Factor
11%
Average Monthly Bill
$2,098
5 MW to Less Than 20 MW
Number of PODs
6
Average Capacity
7.5 MW
Average Load Factor
9%
Average Monthly Bill
$15,222
Greater Than 20 MW
Number of PODs
8
Average Capacity
71.6 MW
Average Load Factor
4%
Average Monthly Bill
$126,827
Multi-DTS Single DTS
Total
–
–
–
–
–
–
–
–
17
0.9 MW
11%
$2,098
3
14.6 MW
58%
$62,451
6
15.1 MW
27%
$55,409
15
12.0 MW
26%
$40,743
1
54.4 MW
93%
$307,712
2
23.6 MW
41%
$92,627
11
61.3 MW
19%
$137,053
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AESO Stakeholder Meeting
6
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
DISCO-Served Direct Connected
PODs
Dual-Use
Less Than 5 MW
Number of PODs
9
Average Capacity
1.5 MW
Average Load Factor
8%
Average Monthly Bill
$3,050
5 MW to Less Than 20 MW
Number of PODs
3
Average Capacity
15.0 MW
Average Load Factor
21%
Average Monthly Bill
$30,729
Greater Than 20 MW
Number of PODs
3
Average Capacity
33.3 MW
Average Load Factor
35%
Average Monthly Bill
$122,302
Multi-DTS Single DTS
Total
3
3.4 MW
77%
$23,760
27
2.4 MW
50%
$27,537
39
2.2 MW
42%
$21,596
8
12.0 MW
69%
$58,944
31
9.4 MW
64%
$57,467
42
10.3 MW
62%
$55,838
4
56.1 MW
86%
$301,831
20
48.0 MW
77%
$250,546
27
47.6 MW
74%
$243,895
13
DISCO-Served Distribution PODs
Dual-Use
Less Than 5 MW
Number of PODs
6
Average Capacity
1.9 MW
Average Load Factor
30%
Average Monthly Bill
$5,749
5 MW to Less Than 20 MW
Number of PODs
12
Average Capacity
9.6 MW
Average Load Factor
46%
Average Monthly Bill
$40,162
Greater Than 20 MW
Number of PODs
6
Average Capacity
45.2 MW
Average Load Factor
34%
Average Monthly Bill
$159,274
Multi-DTS Single DTS
Total
4
3.6 MW
69%
$21,765
33
2.1 MW
53%
$26,662
43
2.2 MW
51%
$23,288
10
9.8 MW
76%
$51,345
141
12.2 MW
67%
$70,382
163
11.8 MW
66%
$66,989
2
47.9 MW
75%
$222,302
117
42.6 MW
68%
$199,685
125
42.8 MW
67%
$198,107
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AESO Stakeholder Meeting
7
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
1(a) Basis for Consideration
● Record in 2005-2006 GTA proceeding (AESO’s
application, IR responses, evidence, argument,
and reply) commented on:
● Impact on smaller customers
● Use of demand ($/MW) charge as alternative to customer
($/month) charge
● 5 MW as threshold below which special consideration
could be given to bill impact
● AESO’s alternate rate design could be considered
in the context of information already on the record
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1(b) Impact on Larger Customers
● Customer ($/month) component would increase to
$22,144/month from $18,648/month for a
substation serving a single DTS POD
● From 5.6-10% increase for 5 MW single DTS POD
to 0.4-1.7% increase for 100 MW single DTS
POD, depending on load factor
● Compared to DTS rates in September 27 refiling
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AESO Stakeholder Meeting
8
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
2(a) Small Site Breakdown
● 32 “small site” customers are DISCO-served direct
connected PODs
● Represents about 2% of AESO’s annual DTS
revenue requirement
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2(b) DISCO Flowthrough Change
● DISCO flowthrough of AESO charges at
transmission connected sites remains appropriate
for harmonization between AESO and DISCOs
● Has been in place since 1998
● Allows costs to be directly assigned when able to
be identified
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AESO Stakeholder Meeting
9
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
2(c) DISCO Averaging Alternative
● DISCO average would impose an average rate
representing an allocation of costs on customers
for whom AESO actual costs are known
● Assuming a DISCO average would be lower than
AESO actual costs, other DISCO customers would
be subsidizing the transmission connected DISCO
customers
● If DISCO average is higher than AESO actual
costs, DISCO customer would argue for
flowthrough of costs rather than average
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3(a-c) Non-Affiliated Dual-Use Data
● IR seeks information on dual-use sites where
parties responsible for DTS and STS costs are
not affiliated
● AESO has no formal information on contractual
arrangements between parties responsible for
DTS and STS costs
● 17 “small site” customers are AESO-served direct
connected PODs at dual-use sites
● Represents about 0.1% of AESO’s annual DTS
revenue requirement
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AESO Stakeholder Meeting
10
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
3(d-e) Non-Affiliated Dual-Use
Contracts
● AESO does not know details of relationship
between non-affiliated parties responsible for DTS
and STS costs
● AESO cannot provide any assurances that DTS
customer is not receiving the benefit of STS
reductions
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4(a-c) Affiliated Dual-Use Data
● IR seeks information on dual-use sites where
parties responsible for DTS and STS costs are
affiliated
● AESO has no formal information on contractual
arrangements between parties responsible for
DTS and STS costs
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AESO Stakeholder Meeting
11
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
4(d) Fixed Costs vs. Size
● AESO does not have cost information available
● Data submitted in response to Direction 13A
suggests some differences
● 0-15 MW: $1,300,000 + ($434,000/MW × Capacity)
● 15-60 MW: $2,300,000 + ($108,000/MW × Capacity)
● Large scatter in data for similar size projects
● Cost data does not account for distinctions
between radial line costs, transformation costs,
and costs for other items such as buswork,
switchgear, communications equipment, and site
itself
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4(e) Postage Stamp Principle
● Electric Utilities Act, section 30(3):
“The rates set out in the [ISO] tariff…shall not be
different…as a result of the location…on the
transmission system”
● Rate differences based on size do not violate the
postage stamp principle
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AESO Stakeholder Meeting
12
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
5(a-b) 12 CP Billing Implementation
● It would take about 10 to 12 weeks in total to
develop, program, test, and move to production
billing with a 12 CP approach.
● Direction in mid-November 2005 could be
implemented by February 1, 2006
● Direction in late November or early to midDecember 2005 could be implemented by
March 1, 2005
● 12 CP billing would cost $25,000 to $50,000 more
to implement than 1 CP billing
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5(c) Interim Rate With True-Up
● The AESO recommends 1 CP billing approach for
Bulk System demand component
● Alternatively, the AESO recommends demand and
energy charges as proposed in its 2006 GTA
● The AESO does not support implementing a
revised rate structure through the deferral account
● Deferral account trues up differences in costs and
revenues, not in rate structure
● Seems more like retroactive rate making than deferral
account reconciliation
● Customers should know basis for charges in advance
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AESO Stakeholder Meeting
13
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
6(a-b) Small Customer Rate Classes
● Rate classes should be based on distinct usage or
cost patterns
● Usage patterns have not been demonstrated to be
different for small customers
● Cost data is not available to assess differences for small
customers
● Establishing rate classes should be considered
after comprehensive investigation and through
consultation and regulatory process
● Stakeholders should have opportunity for input
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7(a-b) Shared Substation Impacts
● Revised $/month charge would be:
● $22,144.00/month × Substation Fraction at each Point of
Delivery
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AESO Stakeholder Meeting
14
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
Refiling Process to Date
● AESO refiled on September 27, 2005
● Parties provided comments
● EUB asked IRs on October 19 (with later
supplemental IRs)
● AESO to respond to IRs by October 28
● Parties to provide reply comments by November 4
● Tariff legislated to be effective January 1, 2006 by
Transmission Regulation
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Discussion of Process
● Has EUB clarification addressed primary
concerns?
● Should AESO withdraw its supplemental response
to Direction 6?
● If so, what should EUB rely on to approve POD charge?
● Can other alternatives be offered to the EUB? In
what manner or process?
30
AESO Stakeholder Meeting
15
AESO 2005-2006 GTA Refiling Technical
Meeting on Direction 6 Response
(Corrected)
October 26, 2005
Discussion and Questions
● Is there more information that should be included
in IR responses?
● Will all relevant information be provided as part of
refiling process?
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AESO Contacts
● Rob Senko
Director, Regulatory
(403) 539-2786
[email protected]
● John Martin
Manager, Regulatory
(403) 539-2468
[email protected]
● Information can be accessed on www.aeso.ca by
following path Quick Links ► Current Regulatory
Activities ► AESO 2005-2006 General Tariff
Application Refiling
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AESO Stakeholder Meeting
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