Looking to the future: AUC releases final report of Distribution System Inquiry into modernization of grid to realize benefits of distributed energy resources
February 19, 2021
The AUC has released the final report of its Distribution
System Inquiry (Proceeding 24116) which examined the need to modernize
Alberta’s distribution system to realize benefits from advancing technologies.
A summary of the report, located on our website under
Decision 24116-D01-2021, can be found in a letter to stakeholders from AUC
Chair Carolyn Dahl Rees.
The report focuses on the distribution side of our
electricity system, on distributed energy resources, or DERs for short. Simply
put, these are considered to be any technology that is connected to the
distribution grid and affects the supply of and/or demand for electricity.
Evolving technologies have raised many questions about
traditional planning approaches, rate structures, cost-recovery mechanisms,
incentives and the evaluation of prudent utility costs. The main driver for the
inquiry was the rapid advancement of technologies such as battery storage,
rooftop solar, electric vehicles, combined heat and power systems, smart
To do that, Alberta’s regulatory system needs to modernize,
and that’s what the Distributed System Inquiry was all about. The AUC
recognizes an inherent need of getting out in front of this wave of
technologies, looking ahead and evolving a regulatory framework that meets
Alberta’s needs. Not just the technological needs, but changing societal values
and expectations such as low-carbon policies that incorporate renewables and
storage, plus the greater choice and empowerment afforded by the application of
smart home technologies or community-based generation.
The pervasive nature of the advancing-technology challenges
means that this report is in one way just the beginning of what must be an
iterative and collaborative process that extends across the sector. This
includes working with partner agencies including the AESO as well as
participating in any government-led policy discussion to ensure the grid
evolves as it should.
Throughout the inquiry, the AUC received extensive
stakeholder input into challenges associated with modernizing our system. How
do we all, as a sector, be collaborative, flexible and adaptive going forward,
given that we face some uncertainty about how much and how quickly digital
technologies will change? What kind of changes may be needed to rate structures
to encourage Albertans to use new resources in an efficient, least costly way? With
new ways of providing services to consumers, how will these be delivered?
In this context, the Commission recognizes that its role in
grid modernization must be seen as only one part of the changes within a
broader regulatory framework development with other agencies and the Alberta
government. The report identifies initial issues that require work,
particularly removing barriers to investment to allow for better introduction
of innovative technologies onto the grid.
With this report, the AUC has begun to incorporate short and
medium-term initiatives with a focus on modernizing our regulatory framework
for electricity storage in batteries, clarifying the role storage assets may
play in generation, transmission and distribution in Alberta’s regulatory
At the end of the day, modernization of the grid will have
transitioned Alberta distributed energy resources to have better metering,
pricing, information access and incentives to integrate distributed energy
resources. The future is just around the corner.