Stakeholder Comment and AESO Reply Matrix
AESO Consultation on Transmission Cost Accountability
Terms of Reference
May 4, 2012
The AESO is asking market participants and interested parties to participate in the AESO’s consultation on the Discussion Paper Transmission Cost Accountability and to provide comments on the related Terms of Reference.
Terms of Reference – In-Scope Section
Do stakeholders agree with the scope set out in the in the Terms of Reference? Are there any other documents the AESO should
consider as in scope?
Stakeholder
Stakeholder Comment
AESO Reply
IPCAA
1.
The scope of this consultation needs to
include more explicit information regarding the
points of interaction between the AESO,
stakeholders and the AUC.
1.
The AESO views that “the more explicit
information” request can be addressed
through the recommendations paper as
the AESO continues to consult on this
effort.
2.
This may include the need to review the role of
the AESO with respect to the prudency of
expenditures by the TFOs.
2.
The AESO intends to discuss this with the
Alberta Utilities Commission (“AUC”) and
determine areas where the AESO may be
able to provide assistance and still remain
within the current legislative framework
insofar as the roles of the AESO and AUC
are defined.
3.
The discussion paper was intended to
stimulate industry discussion on the
subject of transmission cost accountability
and identify issues and challenges.
Subsequently, the AESO intends to issue
a recommendations paper, for industry
review, that will identify some specific
recommendations for change.
4.
The AESO is limiting its scope of review
3.
Suncor
There should also be an Objectives section
outlining the intent of the review and
outcomes that may result.
4. Suncor believes that the question of cost
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AltaLink Management Ltd.
ADC
accountability in transmission goes beyond the
scope identified in the Terms of Reference.
Suncor takes a broader view in terms of overall
regional and system benefits, including the
mandate of the AESO to consider reliability and
system access as the primary determining
factors in system planning. Given this Suncor
recommends that the Terms of Reference be
expanded to include a review of the current
Transmission Regulations, including in
particular the regulations dealing with the
AESO duties, transmission system planning,
reliability standards, project cost reporting and
the Commission responsibilities.
5. AltaLink’s preference is that a cost
accountability framework be developed through
a cross-industry working team involving
commercial, public interest, regulatory and
quasi-regulatory entities under the direction and
oversight of the Alberta Utilities Commission
(“AUC”). The AUC’s broad statutory mandate
and the fact that transmission cost
accountability interconnects numerous
stakeholders support AltaLink’s preference. To
the extent the AESO does not choose to revert
the process to the AUC, which AltaLink submits
is the optimal solution, ISO Rules 9.1.2 and
9.1.3, in addition to ISO Rule 9.1.5 should be
within scope.
6. The ADC is supportive of the items listed as in
scope for the consultation.
The ADC also recommends that the
Transmission Regulation be reviewed with
respect to transmission cost accountability to
identify any legislative barriers to the AESO’s
abilities in ensuring transmission cost
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within the current legislative framework
and is of the opinion that there are
opportunities for improvements within that
current framework.
Transmission Regulations come under the
purview of the Alberta Government
Department of Energy (“DOE”) and any
review of such regulations would be
assessed by the DOE.
5.
The AESO will discuss AltaLink’s
suggestion further with the AUC in order
to determine how the two agencies may
best advance, in a coordinated way, any
reviews of the existing transmission cost
accountability framework.
6.
Please see AESO Reply 4 above.
The AESO has purposely restricted the
initial steps in the review to the current
legislative framework. If the outcome of
such review entails a review of certain
legislative provisions, these will be
submitted to the DOE for consideration.
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accountability.
Terms of Reference – Out of Scope Section
Do stakeholders agree with the out of scope section?
Stakeholder
Stakeholder Comment
AESO Reply
IPCAA
7. IPCAA agrees that changes to Authoritative
Documents are premature at this time.
8. To the extent that the panel recently
commissioned by the minister to review the
Calgary-Edmonton 500 Kv DC lines concludes
that the process, cost or technology or other
salient features associated with the lines should
be reviewed then Suncor submits that any such
review should comply with changes to cost
accountability that result as an outcome of this
stakeholder process.
9. Please see above
10. ADC expects recommendations could include
changes to the AESO authoritative documents;
however agree that would be a subsequent
process.
7.
No reply required.
8.
The AESO notes that this review has now
been completed
11. Yes. As set out in Section 4, AESO could refer
here to CTI projects as being out of scope.
11. The AESO has only excluded the CTI
project being Competitively Procured. The
procurement of the two 500 kV AC lines to Fort
McMurray are subject to the AUC’s approval of
the CP process.
12. The scope section should clearly set out which
transmission projects the Terms of Reference
apply to. For example, is AESO intending to
include the accountability for cost estimates
and cost control for all TFO transmission
projects? Or only in respect of large
12. It is the AESOs intent that any changes
(eg. Changes to existing ISO rules Section
9.1, as an example) in regards to
transmission cost estimating and
reporting), would apply to all transmission
projects.
Suncor
AltaLink Management Ltd.
ADC
EPCOR Distribution and
Transmission Inc. (EDTI)
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9. Please see AESO Reply 5 above.
10. The AESO agrees with ADC, and
accordingly, it is the AESO’s intent to
identify any proposed authoritative
documents changes in the
recommendation paper.
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transmission projects (>$100 million) on which
the TFCMC provides cost monitoring
oversight?
Terms of Reference - Need for Review of the Transmission Cost Accountability Framework
Do stakeholders agree with the need for the review? Are there any other drivers of need of issues the AESO should consider?
Stakeholder
IPCAA
Suncor
AltaLink Management Ltd.
ADC
ATCO Electric
Stakeholder Comment
13. IPCAA is a member of the TFCMC, and we
concur with the need for this Review.
However, the review needs to go beyond just
meeting the TFCMC recommendation and
should include an assessment of the tools
necessary to ensure that Transmission costs
are effectively estimated, benchmarked and
monitored. The current monthly reports to the
TFCMC are lacking in detail and make
tracking of actual and committed expenditures
against estimates difficult.
14. Suncor agrees with the need for the review
particularly in light of 2010 transmission cost
overruns.
15. Please see above
16. Yes, the ADC agrees with need for the review.
17. The transmission grid in Alberta is in serious
need of reinforcement and, although ATCO
Electric is generally supportive of a review to
ensure the adequacy of existing processes,
the introduction of uncertainty or changes that
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AESO Reply
13. The AESO will continue to work with the
TFCMC to enhance transmission project
reporting and cost analysis as provided for
in the TFCMC Terms of Reference. In the
spirit of continuous improvement, the
AESO has undertaken initiatives in the
areas of transmission cost benchmarking
and enhanced project cost monitoring.
14. The AESO shares Suncor’s concerns
regarding transmission cost overruns on
certain major projects and therefore has
undertaken this review to determine
potential alternatives to address these
concerns. The AESO continues to work
with the transmission facility owners to
address areas of cost overruns on
transmission projects as well as its
participation on the TFCMC.
15. Please see AESO Reply 5 above.
16. No reply required.
17. The AESO appreciates ATCO’s support.
The AESO intends to work cooperatively
with the transmission facility owners to
ensure that any process changes that may
be introduced do not impede to the timely
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cause rework, process confusion or delays to
projects in process will seriously impair the
industry's ability to meet the very real
requirements of the transmission network in a
timely manner.
EPCOR Distribution and
Transmission Inc. (EDTI)
18. EDTI supports further discussion to
continuously improve the transmission facility
project implementation process.
delivery of transmission projects.
18. The AESO appreciates EPCOR’s support
during the course of this review and looks
forward to further dialogue with EPCOR
regarding this initiative.
EDTI believes further clarification is required
between the TFO, AESO and the AUC on the
accountabilities, cost controls, cost prudency
reviews, schedule and cost risks inherent in
project delivery.
Terms of Reference – Consultation Activities, Documents and Schedule Section
Do stakeholders agree with the consultation activities, documents and schedule?
Stakeholder
IPCAA
Stakeholder Comment
19. IPCAA agrees with the consultation activities,
although we submit that a stakeholder session
is likely required between Step 7 and 8.
AESO Reply
19. The AESO acknowledges and agrees with
IPCAA’s suggestion. The AESO will
include this in the consultation steps.
AltaLink Management Ltd.
ADC
20. Please see above
21. The schedule seems appropriate. The AESO
could consider further stakeholder meetings to
explore stakeholder responses with a smaller
work group.
22. Step 5.0 could be deleted - a determination of
further consultation should only be made by
the AESO after further comments have been
received in respect of the proposed AESO
recommendation paper.
20. Please see AESO Reply 5 above.
21. The AESO will consider ADC’s
suggestion.
EPCOR Distribution and
Transmission Inc. (EDTI)
22. The AESO disagrees with EDTI and has
retained Step 5.0 on the basis that,
pending review of stakeholder comments
on the discussion paper, a further
stakeholder review of a “revised
discussion” paper may be necessary.
Terms of Reference - Other Comments
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Do stakeholders have any other comments regarding the Terms of Reference associated with the consultation on the Transmission
Cost Accountability framework?
Stakeholder
IPCAA
AltaLink Management Ltd.
EPCOR Distribution and
Transmission Inc. (EDTI)
Stakeholder Comment
23. As some elements of the consultation process
may impact on the Transmission Regulations
as well as AESO Rules it may be appropriate
to engage Alberta Energy in the process.
24. Please see above
AESO Reply
23. The AESO will remain in close contact
with the DOE in regards to the
advancement of this initiative.
25. Accountability for cost estimates and cost
control is determined by the governing
legislation and AESO/AUC rules. The AESO’s
legislative jurisdiction and powers in this
regard are clearly within the scope of this
discussion and must be correctly delineated.
25. The AESO appreciates EPCOR’s support
for this initiative.
24. Please see AESO Reply 5 above.
EDTI welcomes an opportunity to engage with
all stakeholders in determining clear and
appropriate cost estimate accuracy
requirements, appropriate cost monitoring and
project scope review processes over the entire
project life (project initiation to project
completion, and to develop an appropriate
framework for the reporting and management
of risk in respect of the delivery of
transmission projects.
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