Distribution System Inquiry

Distribution System Inquiry

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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.

 

Proceeding 24116              Register

Application status: report expected Fall 2020

 Virtual meeting held on June 24, 2020

 Bulletin 2018-17 issued December 6, 2018

 

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