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.
This overview released at the onset of the inquiry raises
questions that need to be addressed in order to consider the transition that is
occurring in the industry. The outcomes of this inquiry focus on what the AUC
needs to know in order to be in a position to respond to a shifting market,
technology, public policy, consumer behaviour and environmental factors as
reasons for the transition. The questions considered in this inquiry seek to
understand how this transition is likely to play 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 System, under proceeding 24116.
The AUC has combined Module 2 and Module 3 to
consider the remaining two questions that are part of the inquiry. The letter indicating
the scope of this combined module can be found in Exhibit 24116-X0439. This
inquiry has been progressing in a timely and efficient manner amid the COVID-19
restrictions with a number of technical meetings that have been held to inform
the outcome of the inquiry.
Despite
the interruption of the COVID-19 pandemic, the AUC conducted a successful
technical meeting virtually on June 24, 2020. The Commission believed it would
benefit from the opportunity to question several of the independent experts that parties
have retained for the inquiry on the topics of advanced metering infrastructure
and rate design. Commission members and staff asked participants questions at
the virtual
meeting, with live video stream available for all willing participants
including general public. The final process schedule for the Combined Module is
detailed in Exhibit
24116-X0649.
The
Commission will receive closing remarks from parties, which may include
recommendations regarding proceedings that should be undertaken to advance the
regulatory agenda that accommodates emerging economic and technological change.
With this final step, the record of the inquiry will close July 15, 2020. The
Commission expects to issue its report on the inquiry in early fall 2020.
The most recent schedule for this inquiry is
outlined in Exhibit 24116-X0649 and summarized below:
Process step
| Deadline*
|
Commission IRs to parties.
| June 4, 2020
|
All active parties to submit the contact information for their designated representative(s) to respond to follow-up questions during the virtual meeting.
| June 12, 2020
|
Responses to Commission IRs (unless indicated otherwise, responses mandatory for Charles River Associates, The Brattle Group, E3 and InterGroup Consultants; optional for all other parties).
| June 17, 2020
|
Virtual meeting via webinar.
| June 24, 2020
|
Concluding remarks from all parties (optional).
| July 15, 2020
|
* All submissions are due by 4 p.m.
