Distribution System Inquiry

Distribution System Inquiry

Overview 

The Alberta Utilities Commission is mapping out key issues related to the future of Alberta’s electric and natural gas distribution system in this public inquiry.

Chair Mark Kolesar identified in his overview released at the onset of this inquiry that a transition is occurring in the industry. He specifically identified a shifting market, technology, public policy, consumer behaviour and environmental factors as reasons for the transition. This inquiry seeks to understand how this transition plays out, and ensures effective management of change and its effects are central to the public interest mandate of the Alberta Utilities Commission to deliver innovative and efficient utility regulatory solutions for Alberta.

The evolving nature of electric generation, consumption, storage and the distribution system has significant implications for the grid, incumbent utilities, consumers, grid managers and the regulatory framework. These are among the central matters the AUC will examine in its distribution inquiry.

The inquiry is intended to help answer three fundamental questions: 

  • How will technology affect the grid and incumbent electric distribution facility owners; and how quickly?
  • Where alternative approaches to providing electrical service develop, how will the incumbent electric distribution utilities be expected to respond, and what services should be subject to regulation?
  • How should the rate structures of the electric distribution facility owners be modified to ensure that price signals encourage electric distribution facility owners, consumers, producers, prosumers and alternative technology providers to use the grid and related resources in an efficient and cost-effective way?

The AUC broadened the scope of the inquiry to include natural gas distribution on March 29, 2019.

New technologies and recent innovations may transform both the electric and natural gas distribution networks. The AUC understands that electric and gas utilities may be in a position to displace each other, given merging technologies. Broadening the inquiry will allow the AUC to consider the economic and regulatory implications of electricity and natural gas being used as interchangeable energy sources. 

Background

In recent years, Alberta’s electricity distribution sector has been affected by rapid technological improvements and changing consumer behaviour. Government efforts to promote clean, renewable electricity generation linked to Alberta’s Climate Leadership Plan have contributed to increased renewable generation such as wind and solar, and the rise of distributed generation at the residential and community levels.

 

Concurrently, the electricity distribution network has grown in complexity as consumers increasingly both consume energy from the grid and produce power to be put into the grid. In addition, utilities and the communities they serve are increasingly embracing energy efficiency, demand response, renewable energy and energy storage.

 

Among consumers, trends include the growing popularity of electric vehicles with more manufacturers moving away from internal combustion engines, and the design and construction of new homes that are often highly energy efficient, with some using zero net energy. Some consumers, large and small, are considering battery storage, bringing the prospect of independence from the grid closer to reality.

Participation

This inquiry will help the AUC contribute to Alberta successfully navigating and guiding the transition and evolution of the province’s electric distribution system in a manner that supports the public interest, public policy goals, a healthy and robust utilities sector and just and reasonable rates for consumers.

 

The scope of the inquiry has be initiated through questions in modules one, two and three in the notice issued on March 29, 2019. Please review the notice and letter issued the same date for full details, questions, scope and options for participant funding. 


Module One of the inquiry is scheduled to complete in early October. Moving into Module Two, the Distribution System Inquiry will be building upon the learning on technology and focus on better understanding on how those technologies, combined with the social, economic and legislative forces, may affect the current business models and regulatory frameworks governing existing distribution utilities. Module Two will also consider which distribution utility services should be regulated, the related implications for the monopoly franchise and the obligation to serve, and to what extent, if any, new entrants should also be regulated by the AUC.

 

Proceeding 24116              Register

Review underway 

 Module one comments due: July 17, 2019

 

 Technical conference at Red Deer College: September 10 to 13, 2019

 

 Bulletin 2018-17 issued December 6, 2018

 Overview from AUC Chair Mark Kolesar 

 

 Notice issued March 29, 2019

 Letter on scope and process issued March 29, 2019 

 

Listen to a hearing

Access all regulatory documents

Anyone can access applications and proceeding information through the eFiling System.

Create a new account or log in below