Discussion Paper Market Participant Choice to Construct, Own, Operate and Maintain Transmission

Discussion Paper
Market Participant Choice to Construct,
Own, Operate and Maintain Transmission
Lines Connecting its Facilities to the
Interconnected Electric System
Date:
Prepared by:
Prepared for:
Version:
September 29, 2011
Doyle Sullivan, Director, Regulator
Market Participants and Interested Stakeholders
1.0
Table of Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Executive Summary ............................................................................................................................. 3
Purpose ................................................................................................................................................. 3
Introduction ........................................................................................................................................... 3
Eligible Market Participants................................................................................................................. 4
Eligible Connection Projects ............................................................................................................... 5
Model ..................................................................................................................................................... 5
Integration into the Existing AESO Connection Process ................................................................. 6
Request For Proposal Approach ........................................................................................................ 7
Connection Queue Administration ..................................................................................................... 7
TFO Requirements and Obligations ................................................................................................... 8
10.1
10.2
Legislative Domain ..................................................................................................................................... 8
AESO Documents ...................................................................................................................................... 9
11. ISO Rule Changes ................................................................................................................................ 9
12. Next Steps ............................................................................................................................................. 9
Appendix 1 – Legislative References...................................................................................................... 10
Appendix 2 – ISO Rules 9.3, Transmission Facility Projects ............................................................... 13
1.
Executive Summary
The AESO is initiating discussion and consultation on providing market participants the opportunity to
construct, own, operate and maintain the transmission facilities required to connect their facilities to the
interconnection electric system; referred to as “market participant choice” for purposes of this discussion
paper.
The AESO is commencing discussion and consultation on market participant choice as it believes it is
permitted within the existing legislated framework and can be implemented providing there are no
adverse impacts on the Alberta interconnected system and market participants, This discussion is also in
response to market participants who have expressed the desire for an alternative to the incumbent
transmission facility owners (“TFOs”) constructing, owning, operating and maintaining those connections.
The AESO understands this desire results generally from both the perceived high cost and extensive
schedule associated with incumbent TFOs constructing the connection projects.
In summary, at this point in time the AESO considers that all market participants who require a connection
to the transmission system and all types of connection projects may be eligible to participate in market
participant choice. Should a market participant choose to provide its own connection project, the market
participant would assume all accountabilities of TFO, including construction, ownership, operations and
maintenance, and all other obligations stipulated in legislation and AESO authoritative documents. The
market participant would also be required to meet all normal obligations applicable to the type of system
access service it is seeking connection to the system for. The AESO currently believes that minimal
changes may be required to its authoritative documents to accommodate market participant choice, and
that the existing connection process can effectively and efficiently support market participant choice with
a few key procedural changes.
2.
Purpose
The purpose of this discussion paper is to set out concepts related to market participant choice and seek
feedback seek feedback on those concepts.
Stakeholders are encouraged to comment on this discussion paper using the attached stakeholder
comment matrix. Please provide written comments to [email protected] by Friday, October 28,
2011. Should you have any questions on this discussion paper, please contact Nicole Weigel at 403 –
539 - 2874.
3.
Introduction
Market participant choice refers to providing the opportunity for a market participant to construct, own,
operate and maintain (“own”) the transmission facilities required to connect a market participant’s facilities
to the interconnected electric system. For clarity, market participant choice does not include bulk
transmission system projects.
Section 35(1) of the EUA provides authority for the AESO either to direct a TFO to prepare a facility
application or to request a proposal from a market participant. Therefore, the legislative framework
fundamentally supports market participant choice. For convenience, section 35(1) of the EUA can be
found in Appendix 1.
Market participant ownership of transmission facilities is not entirely a new concept in Alberta; while it is
not be a well established practice, it has occurred in a few cases under a variety of historical
circumstances.
While market participant are permitted to own transmission facilities, there are at the same time some
important reliability, operational and planning concerns that must properly be addressed. Specific
Page 3
concerns relate to access to the transmission facilities for subsequent users for possible integration to the
interconnected electric system as system facilities, and the challenges related to a “patchwork” of
transmission facility operators in Alberta.
With respect to access to the transmission facilities, section 39(3)(e) of the Electric Utilities Act (EUA) is
clear that a TFO (whether incumbent or not) must provide the AESO with the use of the transmission
facilities for the purpose of carrying out the AESO’s duties and responsibilities, as such, in the AESO’s
view, gaining access to the transmission facilities is not a barrier. For convenience, section 39(3)(e) of
the EUA can be found in Appendix 1.
In addition, section 28(3) of the Transmission Regulation states that an owner of a generating unit
interconnected to the transmission system may not prohibit interconnection or access to the
interconnection facilities by other market participants.
With respect to a patchwork of transmission facility operators, any market participant, including incumbent
TFOs, owning transmission facilities are required to comply with legislation and regulation requirements,
Alberta Utilities Commission rules, ISO rules, ISO tariff and Alberta Reliability Standards. This
comprehensive set of requirements ensures that all transmission facilities are built to a minimum set of
requirements and operated in a safe, reliable, consistent and coordinated manner. In addition, consistent
with current practices, market participants and TFOs are required to execute joint operating agreements 1
prior to energizing transmission facilities and those joint operating agreements set out matters such as
ownership and operating procedures. While market participant choice may result in additional
transmission facility owners and operators, the end state should not result in any kind of patchwork
operation of the interconnected electric system given that all TFOs operate to the same requirements and
to the joint operating agreements in place.
In the AESO’s view, no barriers exist to advancing market participant choice and as such the AESO
wishes to discuss and seek feedback from stakeholders on matters relating to market participant choice.
Using the stakeholder comment matrix provided please provide comments on the Introduction and
indicate if you see any barriers to advancing market participant choice.
4.
Eligible Market Participants
The AESO is considering choice for all types of market participants that require connections to the
transmission system, as listed below. Different considerations may have to be taken into account for the
different types of market participants, such as waivers by distribution facility owners (“DFOs”) for direct
connect loads under section 101 of the EUA. For convenience, section 101 of the EUA can be found in
Appendix 1.
1. Direct connect generators
2. Direct connect loads
3. Dual use (generation and load)
4. Market participants who own industrial systems
5. Owners of an electric distribution facility (DFOs)
1
References to a joint operating agreement exist in ISO Rules OPP 604, Commissioning Transmission Facilities and
Loads, ISO Rules OPP 605, Commissioning Generators and Associated Transmission Facilities, and the AESO’s
energization checklist used in the AESO connection process.
Page 4
As a note, the definition of an “electric distribution system” in the Electric Utilities Act (“EUA”) states that
an electric distribution system does not include a transmission facility. While an electric distribution
system cannot include a transmission facility, the AESO suggests DFOs should not be precluded from
consideration of market participant choice as contemplated in this discussion paper, provided the DFOs
undertake the necessary steps to support ownership of transmission facilities.
Using the stakeholder comment matrix provided please indicate if you agree with the proposed eligible
market participants. If you do not agree please provide rationale supporting your position.
5.
Eligible Connection Projects
In the AESO’s view, all transmission connection projects at all voltage levels can be eligible for market
participant choice. Some connection projects will be simple and straightforward, such as a T-Tap. Other
connection projects may be more complicated, such as in-out connections which may include more
complex bus configurations such as ring buses. Many factors can introduce complexity into the design of
a connection project, and this discussion paper is not intended to list all the factors or propose solutions
to address those complexities. Market participants choosing to own transmission facilities would be
required to work with incumbent TFOs to coordinate the construction and connection to the
interconnected electric system, coordinate the operation of the transmission facilities, and execute a joint
operating agreement with the incumbent TFO such that the system can be operated in a coordinated,
safe and reliable manner.
Using the stakeholder comment matrix provided please indicate if you agree or disagree that all
transmission connection projects should be eligible for market participant choice. If you believe that the
types of projects eligible should be limited please indicate those limitations and the supporting rationale.
6.
Model
Section 35(1) of the EUA allows the AESO to request a proposal from a market participant. In the
AESO’s view this proposal must include responsibility for all facets of the life cycle of those facilities which
includes construction, ownership, operation, maintenance, replacement and/or retirement of those
facilities; referred to as the “own model”. In the AESO’s view the own model will deliver the most efficient
approach for advancing market participant choice. For convenience, section 35(1) of the EUA can be
found in Appendix 1.
If upon energization and commissioning of the transmission facilities, the market participant – who is then,
by definition, a TFO, chooses to transfer those transmission facilities to the incumbent TFO or another
party, it may pursue such a transfer subject to receiving the necessary regulatory approvals. The transfer
logistics are outside the scope of this discussion paper as the AESO does not have any authority to
approve or refuse transfers.
Using the stakeholder comment matrix provided please provide comments on using the own model as the
approach for advancing market participant choice. If proposing an alternate model please provide the
logistics of that model and rationale supporting that model.
Page 5
7.
Integration into the Existing AESO Connection Process
Maximum efficiencies will be realized by utilizing the existing connection process. In the AESO’s view,
the existing connection process can effectively support market participant choice and a separate and
distinct process is not required. In essence, this means the market participant would be “wearing two
hats” throughout the process: that of a TFO, and that of the end-use market participant.
The diagram below provides a high level overview of the connection process and indicates the key
procedural changes required at various stages to accommodate market participant choice.
The diagram below, or this discussion paper, do not provide a list of the detailed activities performed by a
TFO throughout the AESO’s connection process. For additional information on TFO activities please
refer to the connection process documentation on the AESO website at www.aeso.ca.
Stage 0:
Identify Project
Stage 1:
Connection
Study Scope
Market participant
confirms that it chooses to
own transmission
facilities, or declines.
Stage 2:
Connection
Proposal
Stage 3:
NID and Facility
Application
Stage 4:
Application
Filings and AUC
Approval
Stage 5:
Construction
and Prepare to
Energize
Stage 6:
Energize,
Commission
and Close
AESO prepares and issues
the functional specifications
and requests a proposal to
provide service (PPS) from
the market participant.
AESO reviews the PPS and
approves the PPS provided
it meets the need.
AESO directs the market
participant, functioning as a
TFO to submit a facility
application to the
Commission.
Market participant submits a
facility application to the
Commission.
The first key procedural change would occur at Stage 0. At this stage a market participant would be
required to confirm, in writing, that it intends to own the transmission facilities to its facilities, or not, and, if
it does seek to own the transmission facilities then confirm that it will assume all requirements, obligations
and responsibilities imposed on a TFO throughout the connection process 2, and, expects the AESO to
treat it accordingly. Following this written acknowledgement the AESO would carry out activities in
accordance with the existing connection process.
The second key procedural change would occur at Stage 3. At this stage, the AESO would prepare and
issue the functional specifications to the market participant, and in accordance with 35(1) of the EUA, the
AESO would request a PPS from a market participant rather than directing an incumbent TFO to provide
the PPS, provided the market participant met the suggested Stage 0 requirements. The AESO would
review the PPS received from the market participant and provided it met the project need the AESO
would direct the market participant to file a facility application as it would any incumbent TFO. Section
14(1) and (2) of the Hydro and Electric Energy Act, makes reference to a “person” which suggests that
the Commission can issue a permit to a party other than an incumbent TFO. Therefore, in the AESO’s
view, it can direct a party other than an incumbent TFO to submit a facility application to the Commission.
In addition, section 15.4 of the Hydro and Electric Energy Act further suggests that a “person” may make
an application and the Commission may combine this application with a needs identification document
2
TFOs carry out many activities throughout the connection process including but not limited to: studies, cost
estimates, proposals, consultation, facility application, design, procurement, construction, construction management,
energization and commissioning. Stakeholders are encouraged to review the AESO’s connection process
documentation to gain a better understanding of TFO responsibilities.
Page 6
submitted by the AESO under section 34(1) of the EUA. Again this reinforces that submission of a facility
application is not restricted to an incumbent TFO. For convenience, sections 34(1) and 35(1) of the EUA,
and sections 14 and 15.4 of the Hydro and Electric Energy Act can be found in Appendix 1.
The AESO anticipates that some changes may be required to existing documentation used in the AESO’s
connection process but in the AESO’s view the suggested procedural changes will enable the AESO to
efficiently and effectively integrate market participant choice into the existing connection process.
Using the stakeholder comment matrix provided please indicate if you agree or disagree that the
proposed procedural changes can effectively integrate market participant choice into the existing
connection process. If you disagree please proposed alternate procedures and the rationale supporting
those alternate procedures.
8.
Request For Proposal Approach
Section 35(1) of the EUA allows the AESO to request a proposal, during Stage3 of the Connection
Process, from a market participant(s); note the use of the plural term. For purposes of scoping and
advancing market participant choice the AESO proposes that it request that proposal, referred to in
section 35(1) of the EUA, only from the market participant requesting system access service. For clarity,
the AESO is not suggesting that it request proposals from several market participants with respect
meeting the need for an individual system access service request. For convenience, section 35(1) of the
EUA can be found in Appendix 1.
Using the stakeholder comment matrix provided please indicate if you agree or disagree that the request
for a proposal be made only to the market participant requesting system access service. If you disagree
with the proposed approach, please provide the supporting rationale for your position.
9.
Connection Queue Administration
As suggested in Section 7 above, a market participant seeking to own the transmission facilities
connecting its facilities to the interconnected electric system must provide written confirmation to that
respect at Stage 0 of the connection process, or decline the opportunity to own transmission facilities.
If a market participant chooses to own the transmission facilities at Stage 0 and later in the connection
process determines that it does not want to own the transmission facilities, the AESO proposes that it
cancel the project resulting in the loss of the market participant’s connection queue position. Should the
market participant wish to proceed with the project, it would be required to submit a new system access
service request and obtain a new connection queue position.
And, conversely, if a market participant declines ownership of the transmission facilities at Stage 0 and
later in the connection process determines that it chooses to own the transmission facilities, the AESO
proposes that it cancel the project resulting in the loss of the market participant’s connection queue
position. Should the market participant wish to proceed with the project, it would be required to submit a
new system access service request and obtain a new connection queue position.
In the AESO’s view, a market participant should accept responsibility for understanding all requirements
and obligations of a TFO prior to making a decision, and if it changes that decision then the project would
be cancelled and the queue position revoked.
Using the stakeholder comment matrix provided please indicate if you agree or disagree that the project
should be cancelled and the queue position revoked if a market participant changes it position regarding
owning transmission facilities. If you disagree please indicate why the proposed approach is
inappropriate and suggest another approach with supporting rationale.
Page 7
10. TFO Requirements and Obligations
10.1 Legislative Domain
The incumbent TFO and any new TFOs emerging from market participant choice are required to comply
with all Acts, Regulations and Alberta Utilities Commission Rules applicable to TFOs. In the AESO’s
view, new TFOs have the responsibility to review and understand the legislative domain as it applies to
owning transmission facilities and should not be treated any differently than incumbent TFOs. Market
participants interested in participating in market participant choice are encouraged to review legislation
including but not limited to the Electric Utilities Act, the Hydro Electric and Energy Act, the Public Utilities
Act, the Surface Rights Act, the Transmission Regulation and the Alberta Utilities Commission Rules to
understand TFO requirements and obligations.
While the purpose of this discussion paper is not to list out all the requirements and obligations of a TFO,
there are three notable legislative requirements:
1. AESO directions to a TFO. The EUA and the Transmission Regulation provide the AESO with
authority to direct a TFO to perform activities and the TFO is required to comply with those directions
unless there is real or substantial risk of damage to the transmission facilities, safety to employees or
the public, or undue injury to the environment. Sections 35 and 39 of the EUA, and section 14 of the
Transmission Regulation set out requirements and obligations regarding AESO directions. For
convenience the above noted sections of the EUA and the Transmission regulation can be found in
Appendix 1.
2. TFO Cost Recovery. The cost recovery mechanism for costs incurred as a result of an AESO
direction is set out in sections 40(1) and 41(1) of the Transmission Regulation. For convenience the
above noted sections of the Transmission regulation can be found in Appendix 1.
3. TFO tariff. Section 37(1) of the EUA requires a TFO to submit a tariff to the Commission for approval
setting out the rates to be paid by the Independent System Operator for use of the owner’s
transmission facility. For convenience, section 37(1) of the EUA can be found in Appendix 1.
Therefore, unless the Commission exempts a TFO from this requirement the TFO must submit a
tariff. Following the concept that the market participant is acting as both a TFO and end-use
customer, there would be two streams of payments in all cases: the payment of the TFO tariff by the
AESO to the TFO, and the payment of the AESO tariff (including applicable rates and contributions as
specified in the terms and conditions) by the end use customer.
Depending on whether the market participant is a load or generator, or both, different tariff provisions
are applicable, and these would provide the foundation for the streams of payments. Also, the
connection project cost would have to be transparent as it impacts both the TFO tariff and the
contributions under the current AESO tariff.
Using the stakeholder comment matrix provided please indicate if you agree that new TFOs, emerging
from market participant choice, should be treated the same as an incumbent TFO with respect to the
legislative requirements and obligations. Please also address the tariff requirements specifically. If you
disagree please provide rationale for that position.
Page 8
10.2 AESO Documents
Market participants who decide to own transmission facilities are required to comply with all AESO
documents 3 applicable to TFO owners and operators of those transmission facilities. In the AESO’s view,
market participants who subsequently become new TFOs, as a result of market participant choice, have
the same responsibilities as incumbent TFOs.
Using the stakeholder comment matrix provided please indicate if you agree that new TFOs, emerging
from market participant choice, should be treated the same as an incumbent TFO with respect to
requirements and obligations set out in AESO documents. If you disagree please provide rationale for
that position.
11. ISO Rule Changes
Presently, ISO rules 9.1 (“ISO rules 9.1”), Transmission Facility Projects sets out the existing service
areas, the incumbent TFOs and ISO directions to those TFOs, TFO requirements regarding cost
estimates, proposals and project reporting, ISO project reporting, project procurement, confidentiality and
interpretation. For convenience, ISO rules 9.1 can be found in Appendix 2.
The AESO is of the view that ISO rules 9.1 may eventually need to be amended to apply to all TFOs
removing references to incumbent TFOs and the respective service areas.
Using the stakeholder comment matrix provided please indicate if you agree that ISO rules 9.1 should be
changed to apply to new TFOs? If you do not agree with this approach please provide an alternative
approach and rationale for that approach.
Using the stakeholder comment matrix provided please indicate if you think any other ISO rules should be
developed or changed to support market participant choice.
12. Next Steps
Stakeholders are encouraged to comment on this discussion paper using the attached stakeholder
comment matrix. Please provide written comments to [email protected] by Friday, October 28,
2011. Should you have any questions on this discussion paper, please contact Nicole Weigel at 403 –
539 - 2874.
After receiving and considering written comments, the AESO will consider and respond to comments and
issue a recommendation paper setting out a recommended approach for advancing market participant
choice.
3
Key relevant AESO documents include ISO rules, ISO tariff, Alberta Reliability Standards, and AESO standards and
the AESO Connection Process.
Page 9
Appendix 1 – Legislative References
For convenience specific references to legislation or regulations, made in this discussion paper, have
been replicated below.
Electric Utilities Act
Alleviation of constraints or other conditions on transmission system
34(1) When the Independent System Operator determines that an expansion or enhancement of the
capability of the transmission system is or may be required to meet the needs of Alberta and is in the
public interest, the Independent System Operator must prepare and submit to the Commission for
approval a needs identification document that
(a) describes the constraint or condition affecting the operation or performance of the transmission
system and indicates the means by which or the manner in which the constraint or condition could be
alleviated,
(b) describes a need for improved efficiency of the transmission system, including means to reduce
losses on the interconnected electric system, or
(c) describes a need to respond to requests for system access service.
Transmission facilities directions and proposals
35(1) The Independent System Operator may, at the time of preparing a needs identification document,
after submitting a needs identification document to the Commission or after receiving
Commission approval of a needs identification document,
(a) direct the owner of a transmission facility to submit, for Commission approval under the Hydro and
Electric Energy Act, a transmission facility proposal to meet the need identified, or
(b) request market participants to submit, for approval by the Independent System Operator, a proposal to
meet the need identified.
(2) The owner of a transmission facility must comply with a direction from the Independent System
Operator under subsection
(1) unless the owner gives written notice to the Independent
System Operator, giving reasons, that
(a) a real and substantial risk of damage to its transmission facility could result if the direction were
complied with,
(b) a real and substantial risk to the safety of its employees or the public could result if the direction were
complied with, or
(c) a real and substantial risk of undue injury to the environment could result if the direction were
complied with.
(3) Subject to subsection (2), on receiving a direction the owner of a transmission facility must prepare an
application to meet the requirements or objectives of the direction and apply to the Commission for
approval under the Hydro and Electric Energy Act.
Transmission facility owner’s tariff
37(1) Each owner of a transmission facility must submit to the Commission for approval a tariff setting out
the rates to be paid by the Independent System Operator to the owner for the use of the owner’s
transmission facility.
Duties of transmission facility owners
39(1) Each owner of a transmission facility must operate and maintain the transmission facility in a
manner that is consistent with the safe, reliable and economic operation of the interconnected electric
system.
(2) Each owner of a transmission facility must, in a timely manner, assist the Independent System
Operator in any manner to enable the Independent System Operator to carry out its duties,
responsibilities and functions.
(3) Each owner of a transmission facility must
(a) establish, in conjunction with owners of electric distribution systems, procedures and systems for load
shedding in emergencies;
(b) provide the Independent System Operator in a timely manner with descriptions, ratings and operating
restrictions relating to their transmission facility;
Page 10
(c) inform the Independent System Operator in a timely manner of anticipated changes in their
transmission facility that could affect the Independent System Operator in carrying out its duties,
responsibilities and functions, including
(i) the capability of the transmission facility,
(ii) the status and availability of the transmission facility, including maintenance schedules, and
(iii) additions to, alterations to or decommissioning of transmission facilities or any part of them;
(c.1) install and remove meters and perform metering, including verifying meter readings and verifying
accuracy of meters that are directly connected to the owner’s transmission facility;
(d) comply with standards and practices established by the Independent System Operator to enable the
Independent
System Operator to carry out its duties, responsibilities and functions;
(e) provide the Independent System Operator with use of the owner’s transmission facility for the purpose
of carrying out the Independent System Operator’s duties, responsibilities and functions.
2003
(4) The owner of a transmission facility may refuse to comply with a direction from the Independent
System Operator only if the owner notifies the Independent System Operator that the owner considers
that
(a) a real and substantial risk of damage to its transmission facility could result if the direction were
complied with;
(b) a real and substantial risk to the safety of its employees or the public could result if the direction were
complied with;
(c) a real and substantial risk of undue injury to the environment could result if the direction were
complied with.
Owner’s right to provide electric distribution service
101(1) A person wishing to obtain electricity for use on property must make arrangements for the
purchase of electric distribution service from the owner of the electric distribution system in whose service
area the property is located.
(2) If the person has an interval meter and receives electricity directly from the transmission system, the
person may, with the prior approval of
(a) the owner of the electric distribution system in whose service area the person’s property is located, if
any, and
(b) the Independent System Operator, enter into an arrangement directly with the Independent System
Operator for the provision of system access service.
Hydro Electric and Energy Act
Permit
14(1) No person shall construct a transmission line or any part of a transmission line unless the person is
the holder of a permit issued by the Commission.
(2) No person shall make a significant extension or alteration of a transmission line unless the
Commission has amended the person’s permit or issued a new permit to cover the extension or
alteration.
Combining application and submission
15.4 If a person makes an application under this Part and the Independent System Operator has
submitted a needs identification document to the Alberta Utilities Commission under section 34 of the
Electric Utilities Act in respect of the same transmission line or part of a transmission line, the application
and submission may be combined and considered by the Commission.
Exemption
16(1) Unless the Commission otherwise directs, sections 14 and 15 do not apply
(a) to a person transmitting or proposing to transmit electric energy over the person’s own land solely for
the person’s own use by means of a line that does not cross a public highway, or
(b) to the owner of an industrial system transmitting or proposing to transmit electric energy
(i) over land of which the owner of the industrial system is the owner or tenant, or
(ii) across a public highway dividing land that is owned or leased by the owner of the industrial system for
use solely by that industrial system.
Page 11
Transmission Regulation
Assistance to the ISO
14(1) As part of the duties of a TFO under section 39 of the Act, the TFO must, as directed by the ISO,
assist the ISO in
(a) preparing and updating forecasts,
(b) preparing, maintaining and updating the transmission system plan, and
(c) preparing and updating needs identification documents.
(2) In addition to the duties of a DFO under the Act, the DFO must, as directed by the ISO, assist the ISO
in
(a) preparing and updating forecasts,
(b) preparing, maintaining and updating the transmission system plan,
(c) evaluating the relative merits of transmission and distribution options, and
(d) preparing and updating needs identification documents.
(3) In providing assistance to the ISO, the TFO and DFO must, in accordance with the directions of the
ISO, respect the confidentiality of information of market participants.
Local interconnection costs
28 (3) The owner of a generating unit that interconnects with the transmission system, and who has paid
local interconnection costs, may not prohibit interconnection or access to the interconnection facilities by
other market participants.
Recovery of assistance costs
40(1) A TFO may include in its transmission tariff
(a) costs and expenses incurred by the owner in assisting the ISO in preparing forecasts, the
transmission system plan, needs identification documents and updates to any or all of them, and
(b) the costs incurred by the owner to assist the Market Surveillance Administrator in preparing reports
made under section 23(2).
Recovery of other secondary costs
41(1) A TFO or DFO may include in its tariff any one or more of the following, as applicable:
(a) costs or expenses incurred as a consequence of a direction given by the ISO under this Regulation or
any other enactment;
(b) costs and expenses
(i) of a maintenance upgrade, enhancement or other modification to a transmission facility referred to in
section 11(6),
(ii) incurred in implementing an expansion or enhancement to the transmission system access service
interconnection or a transmission facility project referred to in section 12,
(iii) incurred in order to implement the standards and rules under section 5, or
(iv) incurred in order to implement the reliability standards.
Page 12
Appendix 2 – ISO Rules 9.3, Transmission Facility Projects
9.1 Transmission Facility Projects
9.1.1 Eligible TFO
9.1.1.1 Eligibility by Service Area
Subject to rule 9.1.1.2 b), c), d), and e) each service area shall have one TFO eligible to apply for the
construction or operation, or both, of transmission facilities in such area. For purposes of this rule 9.1.1.1,
the following TFOs are eligible for the referenced service area:
TFO
Service area
AltaLink L.P.
FortisAlberta Inc.
ATCO Electric Ltd.
ATCO Electric
ENMAX Power Corporation
ENMAX Corp.
EPCOR Distribution & Transmission Inc.
EPCOR Distribution & Transmission Inc.
City of Red Deer
City of Red Deer
City of Lethbridge
City of Lethbridge
9.1.1.2 Directions
a) Subject to rules 9.1.1.2 b), c), d), and e),
i) the ISO will issue a Direction to the TFO eligible in the service area where the Project is located;
ii) with respect to a Project located in more than one service area, the ISO will issue a Direction to
each TFO for that part of the Project located in its service area;
b) With respect to transmission facilities that exist as of August 12, 2004, the owner of such facilities, or
its successors and assigns, shall be the TFO eligible to receive a Direction with respect to any
enhancements or upgrades to such facilities, subject to the ISO being satisfied that the operation of
such facilities will result in the safe, reliable and efficient operation of the facilities. For purposes of
this rule 9.1.1.2 b), owners include the following:
Owners
AltaLink L.P.
TransAlta Utilities Corp
ATCO Electric Ltd.
ENMAX Power Corporation
EPCOR Distribution & Transmission Inc.
City of Red Deer
City of Lethbridge
c) The ISO may issue a Direction to a TFO other than the TFO that is eligible pursuant to rule 9.1.1.1. if
such TFO and the TFO in whose service area the Project is located, have entered into an
arrangement or agreement which would result in the safe, reliable and efficient operation of the
transmission system and such arrangement or agreement has been filed with the Commission;
d) With respect to a Project that is located in more than one service area, where the TFOs in those
service areas have entered into an arrangement or agreements, with respect to the Project,
Page 13
i)
ii)
whereby the Project is to be constructed or operated or both by one or more of the TFOs or by a
separate entity created for the purpose of the Project and wholly owned, directly or indirectly, by
one or more of: (A) the TFOs; (B) the direct or indirect owners of the TFOs; and (C) entities that
are directly or indirectly wholly owned by the owners of the TFOs; and
which would result in the safe, reliable and efficient operation of the transmission system and
such arrangement or agreement has been filed with the Commission.
the ISO may issue a Direction in respect of the Project to one or more of the TFOs in accordance with
such arrangement or agreement, and one or more of the TFOs, or the entity created for the purpose
of the Project, is eligible to apply for the construction or operation, or both, of the transmission
facilities.
e) with respect to a Project all but a small portion of which is located in one service area with the small
portion located in an adjacent service area, the ISO may issue a Direction to the TFO in whose
service area the largest portion of the Project is located, if, in the ISO’s opinion, acting reasonably,
such Direction will result in the safe, reliable, efficient and economic operation of the interconnected
electric system.
9.1.1.3 Directions - Interconnections to Jurisdictions outside Alberta
a) If the ISO has obtained approval of a NID for a Project contemplated by the T-Reg:
i) the ISO may issue a Direction to the TFO eligible in the service area where the connection of the
Project to the interconnected electric system will be located if the proponent of the Project has
submitted an application under the HEEA for a permit and license for the remainder of the
Project; or
ii) the ISO may issue a Direction to the TFO eligible in accordance with rule 9.1.1.1 if the Project is
proposed by the ISO.
9.1.2 TFO Obligation to Provide Estimates and Proposals
9.1.2.1 Request for a NID Estimate
a) The ISO may request a NID Estimate with respect to a Project from the Designated TFO.
b) The ISO shall provide to the Designated TFO with such request, information required regarding the
Project which the Designated TFO would reasonably require from the ISO to complete a NID
Estimate.
9.1.2.2 Obligation to Provide NID Estimate
A Designated TFO to whom a request for a NID Estimate has been made must prepare and submit the
NID Estimate to the ISO on or before the date mutually agreed to by the ISO and the Designated TFO,
acting reasonably. The NID Estimate must include, without limitation, the following:
a) a cost estimate for the Project within the accuracy range of plus 30% to minus 30% of the final costs;
b) assumptions used; and
c) the period of time the estimate is valid.
9.1.2.3 Requirement for a Service Proposal
a) The ISO may request a Service Proposal with respect to a Project from the Designated TFO.
b) The ISO shall not issue a Direction to a Designated TFO with respect to a Project unless:
i) it has received a Service Proposal from the Designated TFO for such Project, or
ii) a Transmission Customer has agreed, in writing, to forgo the Service Proposal review by the ISO
and to support the ISO’s issuance of such Direction on the basis of a NID Estimate for such
Project, or
Page 14
iii) the Direction contains conditions requiring the ISO’s receipt of a Service Proposal for such
Project in advance of the Designated TFO’s submission of the Transmission Facility Proposal for
the Project
(c) The ISO shall provide to the Designated TFO with such request or to a Designated TFO referred to in
the forgoing rule b), information regarding the Project which the Designated TFO reasonably requires to
prepare a Service Proposal and a Service Proposal Estimate.
9.1.2.4 Obligation to Provide Service Proposal and Service Proposal Estimate
A Designated TFO to whom a request for a Service Proposal has been made must prepare and submit
the Service Proposal and a Service Proposal Estimate to the ISO on or before the date mutually agreed
to by the ISO and the Designated TFO, acting reasonably. The Service Proposal Estimate must include,
without limitation, the following:
a)
b)
c)
d)
a cost estimate for the Project within the accuracy range of plus 20% to minus 10% of the final costs:
assumptions used;
the period of time the estimate is valid; and
identify any proposed capital maintenance costs included within any Commission approval.
9.1.2.5 Obligation to Provide Service Proposal Estimate Update
A Designated TFO who has submitted a Service Proposal Estimate pursuant to rule 9.1.2.4 must prepare
an update of such Service Proposal Estimate. The Designated TFO must submit such update to the ISO
on or before 180 days from the date that the Commission has issued to the Designated TFO all permits
and granted all licences pursuant to the HEEA required for the facilities associated with the Project. Such
update must include an updated cost estimate for the Project within the accuracy range of plus 10% to
minus 10% of the final costs.
9.1.3 Project Reporting by Designated TFOs
9.1.3.1 Monthly Reporting
Unless agreed otherwise, each Designated TFO with respect to a Project, the cost of which is estimated
to be more than one million dollars, shall provide to the ISO on or before the 15th Business Day of each
month commencing the month after the ISO has issued a Direction to such Designated TFO(s), a Project
Progress Report.
9.1.3.2 Project Variance Reporting
In addition to any other obligations it has with respect to a Project, the Designated TFO shall notify the
ISO as soon as reasonably practical in the event of any of the following:
a) if the in service date of the Project is forecast by it to be delayed from the in service date specified in
the Direction; or
b) if the forecast costs of the Project are expected to vary by more than 10% from the amount specified
in the Direction or if applicable, the amount agreed to by the ISO in an amendment to the Direction; or
c) if the TFO has determined that a material amendment to the scope of the Project is required to meet
the need identified with respect to the Project.
9.1.3.3 Project Variance Explanation
The Designated TFO shall include with the notice given in rule 9.1.3.2, the reason or reasons for any or
all of the variances, including schedule delays, cost trends and scope change.
9.1.3.4 Project Change Proposal
Page 15
The Designated TFO shall prepare and submit to the ISO a Project Change Proposal to address the
delay, cost trends, or scope change, as the case may be, identified in a notice pursuant to rule 9.1.3.2.
The Designated TFO shall prepare and submit such proposal to the ISO as soon as reasonably practical
and in any event no later than 15 days from the date of the notice pursuant to rule 9.1.3.2.
9.1.3.5 Project Change Proposal Review
The ISO shall review the Project Change Proposal submitted by the Designated TFO pursuant to rule
9.1.3.4. As soon as reasonably practical, and no later than 15 days following receipt of the Project
Change Proposal, the ISO must do one or more of the following:
a) approve such proposal, with or without amendments, in which event the Project shall be deemed
amended;
b) reject such proposal with or without requesting a revised Project Change Proposal;
c) cancel the Project; and/or
d) recommend that the TFO apply to the Commission for an amendment to any approval it may have
obtained pursuant to the HEEA.
9.1.3.6 Final Cost Report
Unless agreed otherwise, a Designated TFO shall provide to the ISO;
a) on or before the 60th day from the last day of the month after the Project Energization of the Project,
an estimate of the final cost of the Project substantially in the form of the Final Cost Report and
specifying the accuracy range of the estimate, as a plus % to a minus % of the final costs; and
b) as soon as practical, and in no event later than the first day of the sixth full month after the Project
Energization of the Project, a Final Cost Report of the Project.
9.1.3.7 Notification – Transmission Customer Projects
Notwithstanding any other provision within this rule 9.1.3, if a Transmission Customer has made an
application for system access service for a specific Project, or portion of a Project, the ISO shall notify the
Designated TFO in that regard. Subject to such notification;
a) the Designated TFO shall provide to the Customer at the same time it is required to provide or submit
to the ISO, any and all notifications and documents it is required to provide or to submit pursuant to
this rule 9.1.3; and
b) the ISO and the TFO shall review any Project Change Proposal with the Customer, and thereafter the
ISO acting reasonably, must do one of the things identified in rule 9.1.3.5.
9.1.4 ISO Projects Reporting
No later than the last day of the month following each Quarter, the ISO shall make available on its
website the Quarterly Projects Report.
9.1.5 Project Procurement
9.1.5.1 Project Material Procurement by Designated TFO
A Designated TFO, shall, in carrying out the construction of the transmission facilities, comply with the
procurement requirements contained in this rule.
9.1.5.2 Major acquisitions
Where the cost of a specific item or type of any Project Material required for a Project is forecast by the
Designated TFO, acting reasonably, to exceed $50,000, the Designated TFO shall solicit written bids to
provide such material from not less than 3 arm’s length suppliers.
Page 16
9.1.5.3 Minor acquisitions
Where the cost of all of any specific item or type of any Project Material required for a Project is forecast
by the Designated TFO, acting reasonably, to exceed $10,000 but be less than $50,000, the Designated
TFO shall solicit written bids, including short form written bids, to provide such material from not less than
3 arm’s length suppliers.
9.1.5.4 Standing Bids
The Designated TFO may obtain from a supplier a written bid, including a short form written bid, that is in
effect for a specified period of time and utilize such bid for purpose of making a determination in
accordance with the following rule 9.1.5.5.
9.1.5.5 Lowest Priced Compliant Bid
Subject to rule 9.1.5.6 a), in the event the Designated TFO receives one or more compliant bid pursuant
to rule 9.1.5.2 or 9.1.5.3, it shall award the contract to the party that has submitted the lowest priced, fully
compliant bid.
9.1.5.6 Exceptions
a) In the event the Designated TFO has awarded a contract to a party from whom it has received a bid
pursuant to rules 9.1.5.2 or 9.1.5.3, and such party did not submit the lowest priced, fully compliant
bid such TFO shall;
i) demonstrate to the ISO, if requested, that it was commercially reasonable to do so;
ii)
with respect to a contract awarded where bids were received pursuant to rule 9.1.5.2 include in
the next Project Progress Report for the Project, its reasons for not awarding such contract in
compliance with rule 9.1.5.5; and
iii) with respect to all such contracts, include in its books and records its reasons for not awarding
such contracts in compliance with rule 9.1.5.5.
b) A Designated TFO may award a contract to a party without obtaining a bid pursuant to rule 9.1.5.2 or
9.1.5.3 if the Designated TFO can demonstrate to the ISO that it was reasonable not to obtain
competitive bids, based on any of the following:
i) that the party awarded the contract was the only entity capable to provide the Project Material;
ii) that given reasonable Project schedule requirements, there was insufficient time to solicit bids; or
iii) that there was insufficient information on which to base a bid.
9.1.5.7 Maintenance of Procurement Books and Records
Subject to any other obligation or duty a Designated TFO has, including without limitation any obligations
it has pursuant to the ISO Tariff or the terms and conditions contained in the current version of the
Commission approved tariff of such TFO, the Designated TFO shall maintain all written bids relating to
the procurement of Project Material for each Project regarding which it has been issued a Direction for not
less than one year from the date that the ISO has received the completed Final Cost Report for the
Project.
9.1.5.8 Compliance Review Right of ISO
The ISO shall have the right exercisable upon reasonable prior notice to the Designated TFO to examine
the books and records of the Designated TFO, including all written bids relating to the procurement of
Project Material, to the extent reasonably necessary to verify, with respect to any Project compliance by
the TFO with this rule 9.1.5; provided, that such right shall only continue for a period of one year from the
date it has delivered the Final Cost Report of such Project to the ISO.
Page 17
9.1.5.9 Reasons for non-compliance
In addition to any other provisions in these rules, in the event the ISO, acting reasonably, determines that
a Designated TFO has not complied with this rule 9.1.5 regarding procurement, it shall advise the
Designated TFO and give it the reasons for such non-compliance.
9.1.5.10 Project Procurement Report
The Designated TFO shall include in the Final Cost Report details regarding the level of competitive
procurement with respect to the acquisitions for a Project made pursuant to rule 9.1.5.2.
9.1.6 Confidentiality
9.1.6.1 Data and Information Included
Subject to rule 9.1.6.2, all data and information either the ISO or Designated TFO provides to the other
with respect to rule 9.1 shall be treated by the party receiving such data and information in accordance
with the confidentiality provisions in the ISO rules or the terms and conditions contained in the current
version of the Commission approved tariff of the TFO.
9.1.6.2 Data and Information Excluded
All NID Estimates and all Quarterly Projects Reports shall not be confidential.
9.1.7 Interpretation
In the event of any conflict or inconsistency between this rule 9.1 and any tariff approved by the
Commission, or Commission order or directive, the latter shall prevail.
Page 18