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. Process
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.
Module One of the inquiry concluded in November 2019. It
mainly considered the first question “How will technology affect the grid and
incumbent electric distribution facility owners; and how quickly?” Summary
notes of the technical conference are saved as exhibits X0436, X0437 and X0438,
which can be accessed through the Commission’s eFiling
site, under proceeding 24116.
The Commission will consider the second and third questions
identified in the overview above in a combined module. The current scope,
schedule and process of the Combined Module are set out in exhibits X0439 and
X0476. The Commission anticipates concluding the inquiry in the fall of 2020.
