June 30, 2011
Dear Market Participants and Interested Parties:
Re: Letter of Notice – Consultation on Proposed New ISO Rules and Proposed Removal of
ISO Rules: a) Proposed New ISO Rules Part 300 System Reliability and Operations, Division 302,
Transmission Constraint Management, Section 302.5 Northeast Area Transmission
Constraint Management and location under the new ISO Rules Framework (“New
ISO Rules Section 302.5”); and b) Proposed Removal of Existing ISO OPP 505 Fort McMurray Area Operation
(collectively the “New ISO Rules Section 302.5 Changes”)
Pursuant to Section 2(1) of the Alberta Utilities Commission (“AUC” or “Commission”) Rule 017, the
Alberta Electric System Operator (“AESO”) is providing notice and seeking feedback from market participants on the attached proposed New ISO Rules Section 302.5 Changes
Applicability
The proposed New ISO Rules Section 302.5 Changes apply to all market participants and will be of specific interest to generators, loads and transmission facility owners in the northeast area of the Alberta interconnected electric system (“Northeast Area”).
Background
On March 4, 2011, the Commission approved ISO rules Section 9.4.1 Real Time Transmission Constraint
Management (“TCM Rules)
1
, which contains general procedures for the management of constraints in real time. The AESO currently uses the regional Operating Policies and Procedures (“ISO OPP”) making up the 500 Transmission Series (“OPP 500 Series”) to manage known area constraints as they arise. The
AESO is proposing to amend these ISO OPPs to align the local area constraint management procedure steps with those set out in the TCM Rules over the 2011 and 2012 timeframe. During this period, the
AESO is proposing to redraft and relocate the OPP 500 Series in accordance with the Transition of
Authoritative Documents (“TOAD”) project principles, which will result in additional changes to document formatting and language, and incorporate the consistent use of terminology.
The existing OPP 500 Series is currently a combination of authoritative provisions, non-authoritative informational content and AESO system controller procedures. In the AESO’s opinion, it would be of greater benefit to market participants if the authoritative and non-authoritative content was separated and relocated into the appropriate documents. Accordingly, the AESO is proposing to redraft and relocate the
OPP 500 Series content such that the proposed new successor ISO rules contained consistent authoritative content, the new supporting information documents contained consistent informational content and that the system controller procedures are relocated to reside in AESO internal system controller procedure manuals. Once the proposed new successor ISO rules came into effect the associated ISO OPPs would be removed in their entirety.
1 AUC Decision 2011-75 Compliance Filing Pursuant to Decision 2009-042: Alberta Electric System Operator Objections to
ISO Rule 9.4 Transmission Constraints Management, Application Nos. 1568587, 1577949, 1577950, 1577951, 1577957,
Proceeding ID No. 41, April 9, 2009.

Existing ISO OPP 505 is the second of the OPP 500 series utilizing this approach to align these ISO
OPPs with the TCM Rules. With this approach the AESO has applied standardized TOAD project principles, and the proposed content split between ISO rules, information documents and the AESO internal system controller procedural manuals. The AESO has also considered the stakeholder comments received on June 24, 2011 with respect to proposed new ISO rules Section 302.4 Northwest Area
Operation in developing proposed New ISO Rules Section 302.5.
The AESO is also proposing to increase the operating limits for the existing Leismer and Ruth Lake cutplanes to reflect the latest operational studies on the current system configuration. The higher operating limits will reduce the likelihood of a constraint occurring on the respective cutplanes and will be documented in draft Information Document 2011-008R Northeast Area Operation (“ID 2011-008R”).
Objections to Existing ISO OPP 505
As noted in its letter to the Commission dated April 7, 2011, the AESO provided its rationale for requesting a final order confirming ISO OPP 505 as filed on March 1, 2010. In accordance with
Commission Decision 2010-236
2
, ISO OPP 505 has been in effect on an interim basis since June 7,
2010. The letter indicated that in the AESO’s view the objections to ISO OPP 505 had been addressed by the Revised ISO Rules 9.4 Transmission Constraint Management, which were confirmed by the Commission on March 4, 2011 in AUC Decision 2011-075, and that the AESO’s current stakeholder consultation on proposed new ISO rules Section 302.2 Connection Remedial
Action Schemes ("Connection RAS Rules") is the appropriate forum to address the connection related issues.
On May 25, 2011, the Commission issued its decision regarding the request made by the AESO and determined that, as the Commission had not yet heard the objections filed in the proceeding, it found that issuing a final order confirming ISO OPP 505, in light of the continued objections of ATCO Power
Ltd. (“ATCO”) and TransAlta Corporation (“TransAlta”), would be contrary to the provision of the
Electric Utilities Act (“EUA”) .
The AESO is currently engaged in formal ISO rules consultation regarding the Connection RAS Rules. In the context of this consultation, the AESO will be providing further clarity on its connection policies and will be responding to comments from ATCO, TransAlta and Suncor Energy Inc. (“Suncor”), and other stakeholders on connection issues raised in relation to the Connection RAS Rules. The AESO continues to believe that the Connection RAS Rules consultation is the appropriate forum to address the connection issues raised in the ATCO, TransAlta and Suncor objections and expects to complete this consultation by the third quarter of 2011.
Accordingly, the AESO wishes to preserve the objections by ATCO Power, TransAlta and Suncor and will be requesting the Commission transfer the objection to proposed New ISO Rules Section 302.5 when the proposed New ISO Rules Section 302.5 Changes come into effect, and continue to hold AUC Proceeding
ID 297 in abeyance while the AESO has further discussions with stakeholders on connection policy.
AESO Papers and Other Related Communications
Transmission Constraint Management
On July 21, 2009, the AESO published an overview letter Overview of AESO’s approach to pending
ISO Rules and OPPs related to Transmission Constraints Management and Remedial Actions
Schemes , which outlined the AESO’s approach to finalizing and implementing the TCM Rules, to consulting on Connection RAS Rules and practices and described the handling of relevant ISO OPPs in the interim.
2
AUC Decision 2010-36 Alberta Electric System Operator Amendments to OPP 505 – Fort McMurray Area Operation and
Objections to OPP 505, Interim Order, Application Nos. 1605399, 1605417, 1605432, 1605433, 1605946, 1605970,
Proceeding ID. 297, May 28, 2010.

On July 20, 2010, the AESO published an update to the July 21, 2009 overview letter which outlined the AESO’s plans for finalizing and implementing the TCM Rules and reiterated the overall approach the AESO will take with respect to the related changes to various ISO OPPs required for new customer interconnections.
On December 16, 2010, the AESO published a further update to the July 20, 2010 overview letter which set out the following:
1. Update on Real Time Constraints Management – Revised TCM Rules;
2. Update on Congestion during the Planning Horizon – The Connection RAS Rules;
3. Update on Congestion during the Planning Horizon – Alberta Reliability Standards, System
RAS and Transmission Reliability Criteria; and
4. Update on implementing the TCM Rules through the OPP 500 Series.
Transition of Market Rules
On October 20, 2010, the AESO issued the Proposed Rules Framework and Transition Approach for
Market Rules discussion paper setting out the AESO’s proposed phased approach for the redrafting and transitioning the market rules. On April 7, 2011 the AESO issued the Transition of Market Rules –
New Framework Transition Approach and Update on Status of the TOAD Project recommendation paper finalizing its approach to redrafting transitioning the market rules, and based on stakeholder comments received on the discussion paper, the AESO aligned the redrafting and transitioning of the market rules with its Market Services initiatives, including the redrafting and transitioning of the OPP
500 Series into the new authoritative document format and location in the new ISO rules framework.
Summary of Proposed New ISO Rules Section 302.5 Changes
The proposed New ISO Rules Section 302.5 Changes are summarized as follows:
Proposed New ISO Rules Section 302.5
Proposed New ISO Rules Section 302.5 defines the Northeast Area, identifies the effective assets used to manage constraints, and sets out the constraint management procedure steps for the Northeast Area.
The following summarizes certain key subsections of proposed New ISO Rules Subsection 302.5:
“Applicability” specifies the applicability of proposed New ISO Rules Section 302.5 to market participants in the Northeast Area, refers to the existing cut planes, and references the generators effective in managing constraints related to those cutplanes. Certain of the provisions of
Section 4 of existing ISO OPP 505 have been redrafted to maintain their authoritative content and relocated to subsection 3 of proposed New ISO Rules Section 302.5, where appropriate. The list of effective generators is unchanged from those specified in existing ISO OPP 505;
2. Subsection 2 “General” reaffirms the current constraint management methodology found in existing
ISO OPP 505, which requires the AESO to calculate the cut plane inflow limits and use those limits when managing constraints. Increased operating limits for the existing Leismer and Ruth Lake cutplanes to reflect the latest operational studies on the current system configuration are documented in draft ID 2011-008R; and

3. Subsection 3 ”Overview of the Transmission Constraint Management Procedures” specifies, in a table, the procedure steps from subsection 2(1) of ISO rules Section 9.4.1 to be used in managing transmission constraints in the Northeast Area, and includes existing procedural modifications for some specific constraint conditions that may arise under outflow and inflow conditions. More specifically, certain of the provisions of Sections 3.2, 3.3 and 5 of existing ISO OPP 505 have been redrafted for clarity, and relocated to subsection 3(1) of proposed New ISO Rules Section 302.5.
AESO obligations and market participant responsibilities such as directive compliance, voltage management, communications protocols and transmission facility operations, which are mandated under other ISO rules, have not been repeated in proposed New ISO Rules Section 302.5.
Proposed Removal of Existing ISO OPP 505
Existing ISO OPP 505, which provides criteria and policies for the operation of the Fort McMurray area transmission system and to define policies and procedures for the system controller in implementing transfer limits and ensuring system reliability in the Fort McMurray area, is proposed to be removed in its entirety as its applicable authoritative provisions have been redrafted to maintain their authoritative content and relocated to proposed New ISO Rules Section 302.5. Non-binding information and system controller procedures content has been redrafted and relocated into draft ID 2011-008R and the AESO’s internal System Controller Procedures Manual respectively, where appropriate.
Additional ISO Rules Reforms
Proposed New ISO Rules Section 302.5 includes administrative changes including:
1. Use of the AESO’s new authoritative document template including a new ISO rules number. Once effective, proposed New ISO Rules Section 302.5 will be relocated to the new ISO rules framework; and
2. Amended language to improve certainty and clarity.
Proposed New ISO Rules Section 302.5 currently includes references to the existing ISO rules Section
9.4.1, which the AESO is in the process of transitioning into the new authoritative document template.
Such references will be revised in proposed New ISO Rules Section 302.5 when the transition of existing
ISO rules Section 9.4.1 is completed.
Confidential Table 6 Attached to Existing ISO OPP 505
Existing ISO OPP 505 includes confidential Table 6 that contains a list of the Fort McMurray area load customers DTS levels is commercially sensitive customer information, which if made public could violate the confidentiality agreements regarding the customer information.
The AESO will be requesting that the Commission determine that disclosure of confidential Table 6 would not be in the public interest and the AESO will be incorporating confidential Table 6 into its internal
System Controllers Procedure Manual document for the area.
The AESO is not proposing to make any revisions to confidential Table 6 as a result of this consultation.
Information Document
Draft ID 2011-008R has been created to support the proposed New ISO Rules Section 302.5
Changes. Click here to view the draft Information Document 2011-008R or visit the AESO website at www.aeso.ca
, and follow the path Rules & Standards > Draft Information Documents.

Draft ID 2011-008R does not contain authoritative provisions but rather focuses on the constraint conditions and the limits resulting from those conditions. As well, draft ID 2011-008R provides information on each of the constraint management procedure steps set out in proposed New ISO Rules Section
302.5, and includes additional information regarding the unique operating characteristics and resulting constraint conditions and limits in the Northeast Area.
Request for Stakeholder Comments
Comments and suggestions on the proposed New ISO Rules Section 302.5 Changes are encouraged.
Please use the attached comment matrices provided when submitting comments to the AESO on the proposed New ISO Rules Section 302.5 Changes. The AESO’s rationale for the proposed New ISO
Rules Section 302.5 Changes has been provided in the respective comment matrix. Only written comments will be considered in finalizing the proposed New ISO Rules Section 302.5 Changes.
In keeping with the AESO Principles for Consultation on ISO Rules Changes please ensure that comments provided represent all interests within each stakeholder organization with respect to the proposed New ISO Rules Section 302.5 Changes.
Please provide feedback or questions by July 29, 2011 , to Ron Smith, (403) 539-2595 at rules_comments@aeso.ca
.
The AESO will be publishing all stakeholder comments received for industry review by early August 2011.
The stakeholder comments received and the AESO’s replies to the comments will be published with the final proposed New ISO Rules Section 302.5 Changes in August 2011.
AESO Reply to Stakeholder Comments
In accordance with Section 8 of AUC Rule 017, the AESO is required to provide a reply to stakeholder comments received regarding the proposed New ISO Rules Section 302.5 Changes.
If no comments are received by the AESO regarding the proposed New ISO Rules Section 302.5
Changes, the AESO will proceed pursuant to AUC Rule 017 to file the proposed New ISO Rules Section
302.5 Changes with the Commission. The AESO will be expecting to file with the Commission in
September, 2011.
In accordance with Section 20.4 of the EUA, market participants may object to ISO rules filed with the
Commission within 10 days of the publication by the Commission of the notice of filing of the ISO rules.
Attachments to Letter of Notice
In accordance with Section 4 of AUC Rule 017, the following documents are attached to this Letter of
Notice: a) Clean copy of proposed New ISO Rules Section 302.5 Northeast Area Transmission Constraint
Management ; b) Clean copy of existing ISO OPP 505 Fort McMurray Area Operation ; c) Copy of the comment-rationale matrix for proposed New ISO Rules Section 302.5; and d) Copy of the comment-rationale matrix for the proposed removal of existing ISO OPP 505.

Proposed Effective Date
The AESO proposes that the proposed New ISO Rules Section 302.5 Changes take effect upon completion of the pre-condition to implementation outlined below: a) Internal IT system tool modifications required to implement the proposed New ISO Rules Section
302.5 Changes.
The AESO will provide notice to the Commission and market participants 20 business days before the final determined effective date.
Yours sincerely,
Original Signed By
Paul Glatthor
Manager, Authoritative Documents Process
Ph: (403) 539-2464
E-mail: paul.glatthor@aeso.ca
Attachments