Stakeholder Comment Matrix September 18, 2015

Stakeholder Comment Matrix
September 18, 2015
The Timing for Implementation of the New Loss Factor Rule and Methodology and
the AESO’s Proposal Not to Calculate New Loss Factors for 2016 Using the MLF/2 Methodology
Date of Request for Comment:
Comments Due:
September 18, 2015
September 18, 2015
Comments From:
Capital Power Corporation
Date [yyyy/mm/dd]:
2015/09/30
through
September 30, 2015
Contact:
Steve Kanerva
Phone:
403-717-8941
Email:
[email protected]
Please place your comments/reasons for position underneath (if any).
Introduction, Background & Scope of Consultation
Stakeholder Comments/Position
Comment #1:
Stakeholder Support
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The AESO’s September 18 , 2015 letter requesting
comments from market participants states that the
Alberta Utilities Commission (“AUC” or the
“Commission”) suggested the AESO “consult with
interested stakeholders regarding the timing for
implementation of the new loss factor rule and
methodology that will result from Proceeding 790,
Phase 2, Module B, which is currently in progress.”
Capital Power submits that the AESO’s present
consultation does not fully address the intent of the
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AUC’s suggestion. In the August 27 letter the
Commission suggested that:
...the AESO consult with interested parties
about how its proposal for a compliant line
loss rule and methodology will be
implemented so that parties understand
and perhaps can come to an agreement
regarding implementation that is in the
public interest.
While implementation timing details and options
regarding an effective date for the forthcoming AUC
Issued for Stakeholder Comment: September 18, 2015
Page 1 of 7
approved methodology have been proposed by the
AESO, Capital Power submits that several relevant
and key elements remain unspecified. In spite of these
shortcomings, Capital Power nevertheless recognizes
the importance of timeliness to the development of an
implementation plan for the AUC approved loss factor
rule and methodology. In light of the foregoing, Capital
Power submits the following comments specific to
implementation timing of a new loss factor rule and
methodology but notes that these are subject to
change as new information becomes available.
Further, to satisfy the Commission’s suggestion to
involve stakeholders in discussions regarding how the
methodology is to be implemented, Capital Power
anticipates additional AESO consultation subsequent
to the issuance of the AUC’s Module B Decision. This
consultation will establish details for the AESO’s
implementation of the approved new rule and
methodology.
In general, Capital Power’s position regarding the
AESO’s proposed implementation approaches remains
unchanged from those presented in its Reply Argument
(790-X0435, paragraphs 52-65).
AESO Approach 1: New ILF loss factors for 2016 (slides 13-15 of presentation)



New ILF loss factors expected to be available in Q1 2016
New ILF loss factors would be effective January 1, 2016
Risk: Decision on Module B may not approve ILF methodology
Comment #2:
☐ Support
Approach 1 includes the AESO’s proposal to seek the
MSA’s agreement to forebear the production and
issuance of 2016 MLF/2 loss factors in order to carry
forward MLF/2 loss factors from 2015 as presented in
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the AESO presentation September 17 , pages 13-15.
☒ Oppose
☐ Indifferent
Slide 15 of the September 17 stakeholder meeting
presentation indicates the AESO would begin
development of programming code to calculate ILF
Issued for Stakeholder Comment: September 18, 2015
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loss factors prior to the release of a Module B decision.
Capital Power submits that this work is premature and
inappropriate. The investment of significant resources
to activities beyond the necessary Development of
2016 Base Cases while awaiting the Commission’s
decision in Module B is imprudent and sets a
dangerous precedence that costs be incurred for
initiatives awaiting an AUC decision(s).
The AESO is placing costs borne by others at risk
while speculating the Commission will present an ILF
outcome as identified as a Risk on Slide 13. The
AESO should not be encouraged to place costs at risk
– in this case generator costs as collected through the
pool trading charge.
Capital Power urges the AESO to direct its focus and
invest resources to establish the GSO and uncorrected
base cases for 2016. This scope of work is required
regardless of the loss factor methodology being
applied; including MLF/2 for 2016, as noted on slide
11. Capital Power encourages the AESO to include
stakeholder review and comment ensuring the integrity
of the base cases. It was made evident in Module B of
Proceeding 790 that there is significant value from
stakeholder participation evidenced by the
identification of substantial errors in the AESO base
cases.
AESO Approach 2: New ILF loss factors for 2017 (slides 16-18 of presentation)



New ILF loss factors for 2016 expected to be available for information only in
Q2 2016
New ILF loss factors for 2017 would be effective January 1, 2017
Time period to be addressed in Module C would be extended to include 2016
Issued for Stakeholder Comment: September 18, 2015
Comment #3:
Capital Power reiterates its view from Comment 2
above that loss factor methodology implementation
activities performed in advance of an AUC Decision
must be limited to work that can be applied to all
methodologies.
☐ Support
☒ Oppose
☐ Indifferent
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Capital Power submits that an effective date of January
1, 2017 provides sufficient time to produce 2016 MLF/2
loss factors and then correct the base case errors for
application in the successor line loss methodology
approved by the Commission in Module B.
It is only reasonable that the AESO produce the 2016
MLF/2 loss factors as obligated because, as illustrated
on Slide 17, there are available resources to develop
the 2016 MLF/2 loss factors in the gap presented
between August 2015 and December 2015. Doing so
will eliminate the need to request forbearance from the
MSA to avoid submitting 2016 MLF/2 loss factors and
does nothing to alter the Approach 2 schedule
requirements. Also, producing the 2016 MLF/2 loss
factors avoids creating unnecessary challenges if 2015
MLF/2 losses were rolled forward as explored in
Comment #4.
AESO’s proposal not to calculate new loss factors for 2016 using the MLF/2
methodology, but rather to continue the existing 2015 loss factors into 2016 until a
new methodology can be implemented (as discussed at meeting)

AESO would seek MSA’s agreement to forebear
Comment #4:
Approach 1 and Approach 2 both include the AESO's
proposal to seek the MSA’s agreement to forebear the
AESO’s obligation to produce 2016 MLF/2 loss factors.
☐ Support
☒ Oppose
☐ Indifferent
It is understood that there is sufficient time for the
AESO to produce the 2016 MLF/2 loss factors within
the prescribed deadline set forth at subsection 2(4) of
ISO Rule 501.10. Despite being derived under an
impugned methodology, Capital Power submits that
important information can and will be established from
2016 MLF/2 loss factors including, but not limited to
overall system losses, the impact to losses from the
two HVDC transmission lines set to begin service by
year-end, and other changes to Alberta’s
interconnected electric system topology. Such
information would be missed if the 2015 MLF/2 losses
Issued for Stakeholder Comment: September 18, 2015
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were simply rolled forward.
Presently, the loss factors from 2013 onward are
understood to exist on an interim basis. Simply rolling
the 2015 loss factors into 2016 does not provide a
consistent baseline and approach for establishing the
2016 interim loss factors relative to the historic
practices. As a result, a one-off dissimilar set of loss
factors is created for 2016. Capital Power is
concerned that introducing a third point of reference –
first; 2016-2012 (actual under MLF/2), second; 20132015 (interim under MLF/2), and third; 2016 (2015
MLF/2 rolled over) - creates unnecessary complexity in
Module C.
Capital Power contends it will be of value to have the
2016 MLF/2 loss factor results to provide a consistent
basis with respect to the historic MLF/2 loss factors. It
is similarly reasonable to expect the 2016 MLF/2 loss
factors will be requested as part of Module C as a
basis for comparison. Preserving a consistent base
line calculation and methodology will provide greater
efficiency when correcting the 2016 test year loss
factors.
In addition, the AESO has acknowledged that certain
“changes in its loss factor practices” will need to be
incorporated over the course of implementing whatever
line loss rule and methodology receives Commission
approval. In the absence of an approved methodology
and rule, development of 2016 MLF/2 loss factors
provides the AESO with the opportunity to test the
changes to its loss factor practices. Capital Power
submits that the 2016 MLF/2 loss factors be similarly
produced in conjunction with these changes.
Issued for Stakeholder Comment: September 18, 2015
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Alternative: Calculation of new MLF/2 loss factors for 2016 (slides 19-21 of
presentation)



New ILF loss factors would not be calculated for 2016
New ILF loss factors for 2017 would be effective January 1, 2017
Time period to be addressed in Module C would be extended to include 2016
Comment #5:
Capital Power understands that the AESO must
establish the GSO and base cases consistent with
historic practice as a means to establishing corrected
base cases for use in the methodology replacing the
impugned MLF/2.
☒ Support
☐ Oppose
☐ Indifferent
As mentioned in Comment 4 above, the results for
2016 MLF/2 loss factors will be valuable in assessing
differences between the MLF/2 methodology and the
successor methodology. Again, once the MLF/2 base
cases are determined these base cases can then be
turned for corrections (use in successor methodology)
or to compute the 2016 MLF/2 losses.
Capital Power continues to support an efficient and
transparent regulatory process. Producing 2016
MLF/2 loss factors preserves a consistent historic base
line for comparison in Module C, advances
development of the GSO and base cases for the
successor methodology, eliminates risk of
unreasonably deploying resources for activities in
advance of the Commission’s decision, does not
introduce new considerations that could affect or
influence Module C, and honours the AESO’s
obligations under Rule 501.10.
Additional alternative

Please provide sufficient detail to allow the alternative to be compared to those
discussed at the meeting
Issued for Stakeholder Comment: September 18, 2015
Comment #6:
Capital Power provides no comments regarding
additional alternatives.
☐ Support
☐ Oppose
☒ Indifferent
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Other Stakeholder Input
Comment #7:
Capital Power appreciates the concern with ongoing
delays and the need to have a compliant line loss rule
and methodology in place; however, it must be noted
that failing to ensure stakeholders are confident that
the new rule is implemented properly will create
ongoing and protracted conversations addressing
errors that should have and could have been avoided
in the first place. To this end, Capital Power expects
that the AESO will work constructively with
stakeholders during the implementation phases to
ensure that parties have sufficient opportunity and
information to understand the details of how the new
methodology will be implemented once the AUC’s
Module B Decision has been issued.
Issued for Stakeholder Comment: September 18, 2015
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