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Decision 22293-D01-2017
EQUS REA LTD. Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge October 2, 2017
Alberta Utilities Commission
Decision 22293-D01-2017
EQUS REA LTD.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of
FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge
Proceeding 22293
October 2, 2017
Published by the:
Alberta Utilities Commission
Fifth Avenue Place, Fourth Floor, 425 First Street S.W.
Calgary, Alberta
T2P 3L8
Telephone: 403-592-8845
Fax: 403-592-4406
Website: www.auc.ab.ca
Decision 22293-D01-2017 (October 2, 2017) • i
Contents
1 Introduction ........................................................................................................................... 1
2 Preliminary matters and issues ............................................................................................ 2 2.1 EQUS’ “concern and apprehension” .............................................................................. 2
2.2 Fortis objection to this proceeding ................................................................................. 3
3 The substantive issue ............................................................................................................ 5 3.1 The extension of Option M ............................................................................................ 5 3.2 By what mechanism should Option M be extended to EQUS? ..................................... 9
3.2.1 Pooled approach ................................................................................................ 9
3.2.2 Non-pooled approach ...................................................................................... 12 3.2.3 Pseudo-POD approach .................................................................................... 14
4 Order .................................................................................................................................... 19
Appendix 1 – Proceeding participants ...................................................................................... 20
Appendix 2 – Summary of Commission directions .................................................................. 21
Decision 22293-D01-2017 (October 2, 2017) • 1
Alberta Utilities Commission
Calgary, Alberta
EQUS REA LTD.
Application for Orders Amending the Terms and Conditions
of Service and Rate Schedules of FortisAlberta Inc. Decision 22293-D01-2017
in Respect of Option M Distribution Generation Credit/Charge Proceeding 22293
1 Introduction
1. On December 20, 2016, EQUS REA LTD. (EQUS) filed an application with the Alberta
Utilities Commission requesting an order directing FortisAlberta Inc. to amend its customer
terms and conditions of service (T&Cs) and rate schedules to provide for the availability of
Option M distribution generation (DG) credits and charges to on-site generating facilities that are
connected to EQUS’ electric distribution system (the requested relief). EQUS also asked the
Commission to issue any directions, orders and declarations considered necessary in connection
with the requested relief and that the requested relief be made effective January 1, 2017, or such
other date that the Commission may determine.
2. On December 22, 2016, the Commission issued a notice of application that required any
interested party to submit a statement of intent to participate (SIP) by January 3, 2017. The
Commission received SIPs from Fortis, the Office of the Utilities Consumer Advocate (UCA)
and North Parkland Power REA. Despite the SIP filed, North Parkland Power was not an active
participant in the proceeding.
3. The Commission established a process for the proceeding that included:
(a) A requirement that EQUS clarify whether it was bringing this complaint on its
own behalf, on behalf of any specific EQUS members operating on-site
generation facilities, or both. On January 18, 2017, EQUS confirmed that the
application was submitted on behalf of EQUS in its own right.
(b) Consideration of a concern raised by Fortis that EQUS’ characterization of this
proceeding as a hybrid “complaint and ‘a stand alone application’ ” had the
potential to create confusion for both Fortis and the Commission regarding the
correct process to be implemented and potentially jeopardize procedural fairness.
In a letter dated January 24, 2017, the Commission communicated its
determination that the characterization of the proceeding is less important than
ensuring that the proceeding is fair, impartial and allows for those who are
potentially impacted by the decision to be afforded an opportunity to participate
and present their respective cases. The Commission advised that should Fortis, or
any other registered participant, have any specific concerns or expectations in
terms of required process and fair procedure, it should identify those concerns or
expectations in its submissions. No further process concerns were raised by any
party.1
1 Exhibit 22293-X0011, AUC letter – Commission response to EQUS submissions on preliminary matters.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
2 • Decision 22293-D01-2017 (October 2, 2017)
(c) Consideration of a request by EQUS for confidential treatment of certain
information (a request that EQUS subsequently withdrew).2
(d) Opportunity for the filing of evidence by Fortis and of additional evidence from
EQUS.
(e) Two rounds of information requests (IRs) and responses to and from both EQUS
and Fortis.
(f) Submissions from parties on further process.
(g) Consideration of a request from EQUS for the opportunity to file further rebuttal
evidence. In a letter dated June 9, 2017, the Commission denied the request on the
grounds that EQUS had an opportunity to, and did, file additional evidence on
March 20, 2017, subsequent to the evidence submitted by Fortis on February 15,
2017, and that it had not identified any new evidence that it did not have an
opportunity to address either in its March 20, 2017, filing or in the two subsequent
rounds of IRs and responses.3
(h) Written argument and reply argument submissions.
4. The timelines established by the Commission for a number of the process steps referred
to above were extended at the request of the parties.
5. The Commission received written argument on behalf of both Fortis and EQUS on
June 23, 2017. The Commission received written reply argument on behalf of both Fortis and
EQUS on July 5, 2017. On July 6, 2017, EQUS filed correspondence and corrected reply
argument in which it addressed a typographical error that it had identified in its earlier-filed reply
argument.
6. For the purposes of the decision, the Commission considers the record closed on July 6,
2017.
7. In reaching the determinations set out within this decision, the Commission has
considered all relevant materials comprising the record of this proceeding. References in this
decision to specific parts of the record are intended to assist the reader in understanding the
Commission’s reasoning relating to a particular matter and should not be taken as an indication
that the Commission did not consider all relevant portions of the record with respect to this
proceeding.
2 Preliminary matters and issues
2.1 EQUS’ “concern and apprehension”
8. In the March 20, 2017, cover letter accompanying its filed evidence, EQUS raised
concerns about a legal representative to Fortis in this proceeding who had been formerly
employed as staff legal counsel to the Commission and who had been assigned to proceedings in
2 Exhibit 22293-X0012, EQUS letter re filings and process ID 22293. 3 Exhibit 22293-X0082, AUC letter - Further process and schedule.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 3
which Fortis was an applicant or participant. EQUS also raised a concern in relation to alleged
“off-line” communications between Fortis and the Commission regarding Fortis’ statement that
it had already advised the Commission of its intent to file an REA-related tariff matters
application in 2017.4
9. By letter dated March 27, 2017, the Commission responded to the concerns raised by
EQUS. The Commission confirmed that the individual referred to in EQUS’ correspondence had
been employed for a period of time at the Commission and that the individual had ceased being
an employee of the Commission prior to the filing of this application. With respect to EQUS’
reference to communications between Fortis and the Commission, the Commission advised that
it routinely consults with regulated parties for purposes of preparing a 24-month forecast which
is published on its website under “Application forecast,” listed under “Items of interest” on the
home page. The Commission explained that it was in that context, and as part of its well-
established and transparent practice, that the Commission’s chief executive officer had sent
correspondence to the Commission’s distribution list requesting assistance with the completion
of the Commission’s 24-month application forecast. The Commission asked that if any party had
additional concerns, that they be raised promptly so that they could be addressed.5
10. No further concerns regarding either of the above matters were raised in this proceeding.
Commission findings
11. As no further concerns were identified by any party with respect to the concern and
apprehension registered by EQUS following the Commission’s March 27, 2017 letter, the
Commission considers the issue to have been resolved. There is accordingly no need to address
this matter further.
2.2 Fortis objection to this proceeding
12. In its filed evidence, responses to IRs and argument, Fortis raised concerns about whether
this proceeding is the appropriate forum in which to consider EQUS’ allegations about Fortis’
application of Option M. More particularly, Fortis asserted that:
(a) EQUS’ allegation that Fortis’ application of Option M is arbitrary, preferential,
discriminatory and in breach of Fortis’ responsibility to provide system access
service (SAS) is misleading. The availability of Option M to REAs cannot be
assessed in isolation. Rather, it must be assessed based on a complete
consideration of the broader regulatory environment/tariff framework in which
Fortis operates and with regard for how Fortis’ distribution tariff may or may not
apply to REAs more generally.6
(b) The requested relief has consequences in terms of attendant costs, the potential to
financially impact Fortis’ load customers and the need for changes to Fortis’
T&Cs. There is insufficient information available on the record of this proceeding
to allow those consequences to be fully understood and addressed.7
4 Exhibit 22293-X0017, EQUS letter re evidence and other submissions ID 22293. 5 Exhibit 22293-X0023, AUC letter - Concerns raised by EQUS REA Ltd. 6 Exhibit 22293-X0014, Fortis evidence, paragraph 9, and Exhibit 22293-X0083, Fortis argument, paragraph 8. 7 Exhibit 22293-X0071, FortisAlberta comments on further process, Proceeding 22293.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
4 • Decision 22293-D01-2017 (October 2, 2017)
13. In view of the above, Fortis argued that EQUS’ demands for access to Fortis’ Option M
credits should not be determined as a discrete issue in a “hybrid application/complaint process.”
Rather, the issues raised in this proceeding are “most properly considered distribution tariff
matters and best addressed as part of a Phase II-type proceeding.” Alternatively, these matters
should be considered in the context of an REA-related tariff matters application that Fortis
intends to file in 2017. That application will seek clarification as to which of the rates, costs,
credits, terms and conditions of service currently included in its distribution tariff, if any, should
apply to REAs and their members.8
14. Fortis argued that EQUS’ insistence on urgent deliberation on this matter should not be
given weight in light of the fact that it had the opportunity to raise the extension of Option M as
an issue but failed to do so in previous Phase I and Phase II distribution tariff applications.9
15. Fortis further argued that it may be premature and unnecessary to amend Fortis’ tariff at
this time, in view of the Commission’s ongoing DG inquiry10 which may result in Option M type
provisions being standardized across all distribution owners.11
16. EQUS objected to any suggestion that the determination of the issues raised in this
proceeding be deferred to a future date or to a possible future proceeding brought by Fortis.
EQUS asserted that:12
(a) It attempted to have the issue of Fortis’ application of Option M addressed in
Proceeding 21980.13 However, the Commission declined to consider the issue in
that proceeding and stated that EQUS could file a future stand-alone application
or complaint to address the matter. EQUS initiated this proceeding accordingly.
(b) The timing of a future Phase II proceeding is unknown.
(c) There is no requirement or guarantee that the DG inquiry will result in any
regulatory change.
(d) Unless and until the availability of Option M credits and charges to on-site
generating facilities that are connected to EQUS’ electric distribution system is
determined by the Commission, EQUS is prejudiced in its ability to compete with
Fortis for DG customers. Any further delay only serves to advance the
commercial interests of Fortis.
Commission findings
17. Regarding the Fortis objection to addressing EQUS’ application in the context of this
proceeding, the Commission notes that it declined to consider issues concerning Fortis’
application of Option M credits in Proceeding 21980 and stated:
8 Exhibit 22293-X0014, Fortis evidence, paragraphs 57 and 76. 9 Exhibit 22293-X0083, Fortis argument, paragraph 27, and Exhibit 22293-X0087, Fortis reply argument,
paragraph 3. 10 Proceeding 22534: AUC Distributed generation review in accordance with O.C. 120/2017. 11 Exhibit 22293-X0083, Fortis argument, paragraph 38. 12 Exhibit 22293-X0072, ID 22293 EQUS reply to Fortis process submissions. 13 Proceeding 21980: Fortis 2017 annual performance based regulation rate adjustment application.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 5
16. As has been acknowledged by the Alberta Court of Appeal an expert tribunal
such as the AUC, is entitled to determine and govern its own process. … The schedule
for these particular proceedings is time constrained to facilitate the implementation of
approved rates for January 1, 2017. In the Commission’s view, this fact strongly militates
against it exercising its discretion to expand the prior established scope of these
proceedings to include the issues identified by EQUS REA in this instance.
…
22. The Commission emphasizes that its finding that the issues raised by EQUS REA
regarding changes to allocation methodologies and to terms and conditions are not within
the scope of the current proceeding does not preclude a further application being brought
by it for determination of rate design or terms and conditions matters. EQUS REA may
exercise its prerogative to seek relief from the Commission either through a potential
complaint to the Commission, or in a separate application filed on a stand-alone
basis. …14
18. The Commission already determined in Proceeding 21980 (to which both Fortis and
EQUS were parties) that a proceeding such as this one is an appropriate forum in which to
consider the extension of Option M to EQUS. EQUS acted in accordance with the Commission’s
direction in Proceeding 21980 and Fortis has not satisfied the Commission that there is any
compelling reason to depart from its previous determination.
19. The Commission acknowledges the concerns raised by Fortis regarding a lack of
information on the record of this proceeding and its suggestion that the issues raised in this
proceeding should be considered in the context of a Phase II-type proceeding or its REA-related
tariff matters application given the potential financial impact to its customers. However, the
Commission is satisfied that there is sufficient information on the record upon which to
determine the substantive issue raised in this proceeding. Even though Fortis raised the issue of
potential financial impact to its customers, the record indicates that EQUS currently has no DG
members.15 Any prospective impact resulting from any relief granted in this proceeding can be
brought forward by Fortis in either its Phase II proceeding or its REA-related tariff matters
application if Fortis considers it necessary to do so.
3 The substantive issue
3.1 The extension of Option M
20. Fundamentally, the substantive issue raised in this proceeding is whether Option M DG
credits and charges should be extended to EQUS (and by extension, to its DG members).
21. A number of ancillary issues were raised in the evidence and addressed extensively in the
arguments filed by both EQUS and Fortis, including:
(a) Is the provision of Option M by Fortis a distribution or a transmission tariff
matter?
14 Proceeding 21980, Exhibit 21980-X0032. 15 Exhibit 22293-X0072, EQUS reply to Fortis process submissions.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
6 • Decision 22293-D01-2017 (October 2, 2017)
(b) Is Fortis’ current administration of Option M unjust, unreasonable, unduly
preferential, arbitrary or unjustly discriminatory (and therefore contrary to
Section 127(c) of the Electrical Utilities Act); and/or in violation of the Roles,
Relationships and Responsibilities Regulation in relation to Fortis’ statutory
obligation to provides SAS to EQUS?
(collectively, the ancillary issues)
22. By way of background:
(a) Fortis’ T&Cs provide for and define Option M as follows:
Availability: Option M is available to Distribution Generation (DG)
Customers that are interconnected to the distribution system
downstream of a FortisAlberta transmission Point of Delivery
(POD) and which are exporting into the Alberta Interconnected
Electric System (AIES).
…
Option M: The Option M Credit or Charge will be the difference between
Alberta Electric System Operator (AESO) System Access
Service charges to FortisAlberta at the upstream POD with the
generator in operation and the charges that would have been
incurred if the generator had not been in operation, calculated
based on the amount of electricity exported into the AIES at the
Point of Interconnection.16
(b) DG customers are defined in Fortis’ T&Cs as “… a person that has onsite
generating facilities that are interconnected and operating in parallel with Fortis’
Electric Distribution System and unless otherwise indicated, includes a Micro-
Generation (MG) Customer.”17 However, MG customers are excluded from the
availability of Option M credits or charges.18
23. EQUS highlighted the restriction on the availability of Option M to Fortis’ DG customers
under its tariff and offered extensive evidence and argument in an effort to demonstrate, among
other things, that the restriction of Option M to Fortis’ DG customers is unfair, unreasonable and
discriminatory as well as in violation of Fortis’ SAS obligations. On a practical level, EQUS
asserted that Fortis’ practices also frustrate and inhibit the DG objectives of both the
Commission and the Legislature. EQUS asserted that DG is widely and commonly understood to
reduce the demand for transmission service at a point of delivery (POD).19 The balance of
EQUS’ evidence and argument addressed a number of different implementation methodologies
and associated issues including those related to data and information requirements, connection
and operating requirements and tariff matters.
16 Exhibit 22293-X0014, Evidence of Fortis, page 4. 17 Exhibit 22293-X0014, Evidence of Fortis, page 5. 18 Exhibit 22293-X0014, Evidence of Fortis, paragraph 69. 19 Exhibit 22293-X0001, EQUS application, pages 5-9, and Exhibit 22293-X0084, EQUS argument, paragraphs
15-22.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 7
24. Fortis explained in its evidence and argument that:
(a) Option M credits to DGs were first introduced in two decisions of the
Commission’s predecessor, the Alberta Energy and Utilities Board (the Board), in
response to the way in which the transmission tariff was metered and billed. Fortis
suggested that in those decisions, the Board expressed its expectation that credits
received by distribution utility companies resulting from the change from gross to
net billing would be passed through to end customers.20
(b) The implementation of Option M was first approved for Fortis’ predecessor in
2001 as part of that company’s 2001 distribution tariff negotiated settlement
application. In that negotiated settlement, Fortis’ predecessor agreed to work with
customer groups to create a calculation method for Option M credits. Ultimately
an agreement was reached on, among other things, provisions allowing for pass-
through of supply transmission service charges to distributed generators if a POD
energy flow reverses due to the aggregate DG supply exceeding the aggregate
customer load on a POD.21
(c) Although Fortis identified that its own Option M was originally intended to incent
gas flare generation as a means of offsetting the environmental impact of flaring
activity, Fortis identified more generally that Option M credits have evolved as a
subsidy paid by a distribution utility’s load customers to incent the utility’s DG
customers to export to the distribution system as a means of reducing upstream
transmission charges.22
25. Fortis also offered extensive argument on the ancillary issues and most particularly as to
why its application of Option M is not unjust, unreasonable, unduly preferential, arbitrary or
unjustly discriminatory or in violation of the Roles, Relationships and Responsibilities
Regulation in relation to Fortis’ statutory obligation to provide SAS to EQUS. However, at
paragraph 29 of its argument, Fortis stated:
Nevertheless, for the purposes of this Proceeding, and notwithstanding the above
argument to reject the allegations of misconduct on FortisAlberta’s part made by EQUS,
the Company confirms that it is theoretically possible to extend Option M eligibility to
the applicant if certain changes to the currently-approved tariff are implemented.
[emphasis added]
26. The remainder of Fortis’ submission was largely directed at the various approaches
available to distribution system owners, including Fortis and EQUS, when considering the
standardized application of DG credits/ charges across the province.
Commission findings
27. The Commission acknowledges the extensive argument offered by both parties
concerning the ancillary issues. However, it is not necessary for the Commission to determine
the ancillary issues and most particularly, whether Fortis’ application of Option M is unjust,
unreasonable, unduly preferential, arbitrary or unjustly discriminatory or in violation of the
20 Exhibit 22293-X0083, Fortis argument, paragraphs 19-20. 21 Exhibit 22293-X0083, Fortis argument, paragraph 21. 22 Exhibit 22293-X0083, Fortis argument, paragraphs 20 and 23.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
8 • Decision 22293-D01-2017 (October 2, 2017)
Roles, Relationships and Responsibilities Regulation relative to SAS. This is because the
Commission is satisfied that Option M should be extended to EQUS on other grounds. More
specifically, the Commission considers that whether Option M should be extended to EQUS is
a matter that can be determined on the basis of fundamental principles and the expectations
previously articulated by the Commission and its predecessor relating to the flow-through of
transmission cost savings to distribution generators.
28. In Decision 2000-01, the Board confirmed its previous direction that any transmission
cost savings would be passed through to DG customers, and expressed the expectation that non-
regulated municipally-owned distribution utilities would do likewise:
The Board accepts the position of EAL [ESBI Alberta Ltd.] that net treatment matches
the physical reality that the connection with the system need be sized only to
accommodate the maximum net transfer in either direction. Similarly, the Board agrees
many loads are net of generation and non-electrical drives on site, and the load customer
will normally require only the net load to be satisfied.
The Board acknowledges IPSSA’s [sic; Independent Power Producers Society of Alberta
or IPPSA] concern with the possibility of regulatory delay and notes that in the utilities
Phase II Decisions, the Board did direct the utilities to pass through credits received by
them. In keeping with the spirit of that direction, the Board believes it is reasonable to
expect the utilities to pass through credits received. While the Board is not in a position
to direct the activities of the municipally-owned DISCOs [distribution companies], it is
the Board’s expectation that the municipally-owned DISCOs will pass through any
transmission cost savings directly to their customers.23
29. The board reiterated its expectations for passing on the one-time credits arising from the
change from gross to net billing in Decision 2000-25:
The Board encourages EAL, the utilities, and IPPSA to develop a system to implement
the Board’s expectation that credits received by the DISCOs resulting from the change
from gross to net billing are to be passed through to end customers. The reduction of
flaring is an important public issue and the Board, through its Guide 60—Upstream
Petroleum Industry Flaring Guide, has implemented a number of measures to assist in
flaring reduction. The Board expects a resolution of this matter and would find an interim
solution acceptable.24
30. Decision 2000-25 and Decision 2000-01 indicate that transmission cost savings or credits
received by a distribution utility attributable to the operation of distribution generators are to be
passed on to DG customers of regulated utilities and that there is an expectation that non-
regulated entities will do likewise. The Commission considers that Option M originated on the
basis of the same principle that DG customers be the recipient of any transmission cost savings
created due to their operation.
31. The Commission is of the view that any EQUS DG member, similar to a Fortis DG
customer, could potentially reduce Fortis’ SAS charges from the AESO that would have been
23 Decision 2000-01: ESBI Alberta Ltd., 1999/2000 General Rate Application Phase 1 and Phase 2, February 2,
2000, pages 219- 220. 24 Decision 2000-25: ESBI Alberta Ltd., 1999/2000 Tariff Application Refiling-Part B, Tariff and Terms and
Conditions of Service, April 25, 2000, page 47.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 9
incurred had the generator not been in operation. However, under Fortis’ current Option M
provisions, the EQUS’ DG member would not receive any credits for these transmission cost
savings. This is inconsistent with the principles and expectations described above. On that basis,
the Commission finds that Option M should be made available to EQUS (and by extension, to its
DG members). Consistent with the manner in which Fortis’ Option M is currently designed, as
explained in paragraph 22(b) of this decision, the Option M provision will not be available to any
MG in the EQUS’ distribution system.
3.2 By what mechanism should Option M be extended to EQUS?
32. The mechanism by which Option M credits could be extended to EQUS was also
addressed extensively by both parties in their responses to IRs and in the arguments filed.
33. In summary, three different mechanisms were proposed and discussed:
(a) A pooled approach
(b) A non-pooled approach
(c) A pseudo-POD approach
3.2.1 Pooled approach
34. Fortis suggested that the pooled approach proposed by EQUS refers to pooling on two
levels: (1) at the DG customer base for which the Option M credits are paid out, and (2) at the
level of the load customer base from which the costs associated with the payment of those
Option M credits are recovered. Under the pooled approach, both the Option M credits that are
calculated and paid to Fortis DG customers and EQUS’ DG members, as well as the costs
associated with these credits, are collected by application of Fortis’ distribution tariff
(presumably for subsequent pass through in EQUS’ tariff).25
35. Fortis clarified that its current Option M mechanism has elements of both a pooled and a
non-pooled approach. The current administration of Option M does not include payments to
REA customers. Therefore, these entities are not participants in a pooled Option M payment
system. However, the payments of Option M to eligible Fortis customers are recovered from all
of Fortis’ load customers and from REAs and so in that sense, the costs are pooled.26
36. Fortis favoured a non-pooled approach over the pooled approach. However, Fortis
confirmed that, in theory, a completely pooled approach could be implemented to facilitate
access to the Option M credit/charge mechanism for EQUS and other REAs. However, this
would require the satisfaction of certain identified operational requirements including those
related to information exchange as well as the amendment of Fortis’ T&Cs.27
37. EQUS favoured a fully pooled approach for reasons that included the clarity of the
system whereby the Option M credits are more evidently linked to the transmission savings.28
25 Exhibit 22293-X0083, Fortis argument, paragraph 36(a). 26 Exhibit 22293-X0081, FAI-AUC-2017MAY29-002. 27 Exhibit 22293-X0081, FAI-AUC-2017MAY29-002. 28 Exhibit 22293-X0088, EQUS reply argument, paragraph 63.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
10 • Decision 22293-D01-2017 (October 2, 2017)
38. Both EQUS and Fortis submitted their views on the operational requirements including
the extent of information that will need to be exchanged and any consequent costs that could be
incurred by Fortis in order to implement this methodology.
39. By way of a brief summary:
(a) In response to a Commission IR, Fortis identified and explained the information
that it would require from EQUS in order to calculate the Option M credit/charge
for an EQUS DG member as follows:29
A copy of the IOA (Interconnection Agreement) between EQUS and its DG
member. This is required to properly set-up and verify the DG member for
financial control purposes, as well as confirm the interconnection and
operating parameters, for purposes of calculating Option M credit/charge
amounts. The agreement will also have detailed information regarding the DG
member’s site such as the site name, AESO Asset ID, maximum export
capacity, legal land location of the DG, the POD that it is being connected to,
interconnection date/approvals and the DG’s metering requirements to ensure
that 15-minute-interval, bidirectional metering data is provided in an
acceptable format/frequency to Fortis.
The Meter Point Definition Record (MPDR) for the respective REA-
connected DG site. This would provide the identity of the meter data manager
(MDM) amongst other information. Fortis submitted that acting as Load
Settlement Agent (LSA), it is required to know the identity of the MDM to
perform the duties as set out in Rule 021: Settlement System Code Rules.30
15-minute-interval metering data for each DG member in the
format/frequency required by Rule 021 and Fortis.
(b) Regarding necessary amendments to its T&Cs, Fortis submitted that under its
approved tariff, Option M is only available to its own DG customers (as defined
in Article 12). Consequently, amendments to its T&Cs would be required to
extend Option M to REAs including EQUS. Fortis provided draft amended T&Cs
in Attachment FAI-AUC-2017MAY29-003.01,31 which Fortis submitted were
made with the intention of ensuring that:
The interconnection and approvals related to the REA-connected DG member
were properly established and demonstrated;
The required metering data and information were available for Fortis to
calculate and apply Option M to REAs; and
29 Exhibit 22293-X0032, FAI-AUC-2017APR03-002. 30 Exhibit 22293-X0081, FAI-EQUS-2017MAY29-002. 31 Exhibit 22293-X0081, FortisAlberta IR Responses - Proceeding 22293.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 11
Option M availability to MG customers as defined by the Micro-Generation
Regulation is excluded.32
(c) Fortis also asserted that there is a potential financial impact associated with the
pooled approach that must be addressed:
The implementation of this method may result in costs to its load customers.
This is because the actual funding/costs of paying those incremental Option M
credits would be functionalized as a transmission cost in Fortis’ distribution
tariff, allocated to and collected from all rate classes in accordance with its
approved transmission allocation method.33
There will also be attendant costs in establishing and maintaining systems,
processes and resources which are associated with the administration,
processing and billing of Option M amounts to EQUS’ DG members. EQUS
should be responsible to pay a fair allocation of these costs arising from the
services being provided by Fortis because the absence of such an allocation
mechanism would leave the costs to be recovered solely from Fortis’
customers.34
The quantification of such costs would require a Phase II-type cost study to
determine a fair allocation of the attendant costs of administering and billing
Option M to EQUS REA and its members. In the absence of such a study and
in the interim, Fortis suggested that the service charge currently approved for
its Rider E – Customer Specific Facilities, may be a good proxy for these
administration and billing costs, given that Rider E and Option M are both
customer-specific and manual in nature, and the work effort is of a
comparable level and complexity.35
40. In its evidence and argument, EQUS disputed all of the above. EQUS challenged the
amount of information Fortis claimed as necessary to facilitate the pooled approach, the
necessity for Fortis’ proposed amendments to its T&Cs and its claimed costs. More specifically:
(a) EQUS submitted that only two data inputs are required for the calculation of
Option M, and that these are already provided to Fortis for billing and load
settlement purposes:
The generator’s 15-minute interval data; and
Site ID36 (which, through the Site Catalog, provides the DG’s physical
location).
(b) EQUS further argued that the contents of the MPDR record are provided in the
Alberta Electric System Operator (AESO) Measurement System Standard and
32 Exhibit 22293-X0081, FAI-AUC-2017MAY29-003. 33 Exhibit 22293-X0081, FAI-AUC-2017APR03-004(b). 34 Exhibit 22293-X0081, FAI-AUC-2017APR03-003(b). 35 Exhibit 22293-X0081, FAI-AUC-2017APR03-003(d). 36 Exhibit 22293-X0060, EQUS-AUC-2017APR03-002.
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12 • Decision 22293-D01-2017 (October 2, 2017)
that it has no objection to Fortis accessing the AESO’s system in this regard, even
though all the relevant information is available through other sources, as
explained below.
o The name of the DG and the AESO Asset ID are not part of the calculation.
o The POD number that the DG is connected to can be determined when
EQUS provides the DG Site ID, which is required for load settlement.
o EQUS will undertake to confirm a DG’s non-microgeneration status.
o The identity of the MDM will be known then the DG or its agent sends meter
data to Fortis as Load Settlement Agent.37
(c) EQUS identified several additional items that it submitted would be required in
order to facilitate the provision of Option M, which are as follows:
that Fortis be required to accept EQUS’ attestation that a DG customer is
eligible for Option M
that Fortis be ordered to request only that DG customer data items for which it
can identify specific legislative or regulatory requirements38
(d) EQUS stated that Fortis does not provide electric distribution service to EQUS
and EQUS is not a customer of Fortis.39 Consequently, Article 12 of Fortis’ T&Cs
does not apply to EQUS, and amendments to Fortis’ T&Cs would therefore not be
required to extend Option M to EQUS or its members.
(e) EQUS argued that Fortis had provided no evidence to demonstrate the existence
of the claimed costs. Furthermore, in order for EQUS to pay a fair allocation of
costs, “… then Fortis would need to provide EQUS with transmission charges
using the same rate classes that Fortis adopts for its own Customers.”40
3.2.2 Non-pooled approach
41. A non-pooled approach was suggested by Fortis and identified as its preferred approach.
Under this approach, Fortis and EQUS would each pay out Option M credits to their respective
DG customers/members. Under this approach, an REA would set up its own Option M credit
payment and funding mechanism through its own self-regulated distribution tariff.41 If such a
method was implemented, then Fortis proposed amending its tariff to exempt and remove the
portion of the transmission costs allocated to Rate 24,42 the REA Farm Service rate that applies to
EQUS, that are associated with the recovery of Option M credits to Fortis’ DG customers.
37 Exhibit 22293-X0084, EQUS argument, paragraph 47. 38 The DG Site ID and Planning information as required under the IOA. 39 Exhibit 22293-X0084, EQUS argument, paragraph 59. 40 Exhibit 22293-X0088, EQUS reply argument, paragraph 57. 41 Exhibit 22293-X0081, FAI-AUC-2017MAY29-002. 42 In its Exhibit 22293-X0083, argument, page 39, paragraph 47D, Fortis later submitted that the exemption would
also apply to Rate 29.
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Decision 22293-D01-2017 (October 2, 2017) • 13
The transmission component energy charge of Fortis’ Rate 24 (and any applicable transmission
riders) would serve as a proxy for avoided transmission costs for the REA.43
42. Fortis stated that it favours the non-pooled approach for the following reasons:
There is currently insufficient evidence on the record of this proceeding to enable Fortis
to completely understand the potential financial impact on its customers (who are not
parties to this proceeding) of extending Option M to REAs and the proposed
modifications to its tariff.
Fortis is concerned that the inflammatory language used by EQUS would suggest that
any required joint administration of Option M between it and EQUS would prove to be
unnecessarily strained for what the REA seemingly views as competitive reasons.
A non-pooled approach would eliminate the need for provision of data, metering and
additional financial exchanges/transactions associated with DG services between Fortis
and EQUS.
As the DG Inquiry in Proceeding 22534 proceeds and policymakers consider ways to
enable the integration of alternative and renewable DG consistently throughout all
distribution service areas in Alberta, the existing Option M-type mechanisms of Fortis,
ATCO Electric and ENMAX, will likely be reviewed and potentially standardized. It
would be premature and unnecessary to amend Fortis’ tariff now, particularly when the
non-pooled approach option exists for EQUS.
The non-pooled approach would be much simpler than Fortis’ Option M, which uses the
more structurally complex AESO tariff as a proxy for avoided transmission costs.44
43. EQUS argued against the non-pooled approach asserting that:
It would create a significant and growing rates cross-subsidy, exempting all Fortis-area
REA members from paying any share of Option M costs, while increasing Option M
costs to all other Fortis customers.45
It would create a strong economic incentive for any REA to discourage DGs from
becoming REA members because to avoid taking on DG customers would be to receive
a guaranteed Option M cross-subsidy from Fortis customers without making any
contribution towards the reduced AESO SAS charges. 46
The fundamental Option M equation would be violated by the non-pooled methodology.
From an allocation perspective, total energy at the customer meter would not equal
energy at the POD and from DG.47
43 Exhibit 22293-X0032, FAI-AUC-2017APR03-001(f). 44 Exhibit 22293-X0081, FAI-AUC-2017MAY29-003(c). 45 Exhibit 22293-X0084, EQUS argument, paragraph 81. 46 Exhibit 22293-X0084, EQUS argument, paragraph 88. 47 Exhibit 22293-X0084, EQUS argument, paragraph 83.
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14 • Decision 22293-D01-2017 (October 2, 2017)
The adoption of the Transmission Component energy charge of Fortis’ Rate 24 (and any
applicable transmission riders) by EQUS REA as a proxy for avoided transmission costs
for the REA) would be another unstable, unpredictable cross subsidization factor. There
is no evidence that this energy charge would in any way reflect the variable level of
Option M credits paid by an REA to its DG.48
Basing the non-pooled cost on farm-based transmission charges, i.e., Rate 24, would be
incorrect and unfair to EQUS, since EQUS serves more load than simply farm
customers.49
3.2.3 Pseudo-POD approach
44. EQUS suggested that in theory, it would be possible for an REA such as EQUS to adopt
an Option M type mechanism in its own tariff by the creation of one or more pseudo-PODs,
using hourly load settlement data. EQUS elaborated further on this approach as follows:
… AESO charges at the pseudo-POD could be calculated using this data, and reconciled
to the local Point Of Delivery totals to ensure accuracy.
The Option M type mechanism could then be applied to each pseudo-POD. Distributed
generation output would reduce the pseudo-POD demand and energy. That reduction in
demand and energy would in turn reduce the associated AESO tariff charges by an
amount exactly equal to the Option M type payments made to the distributed generator.
Transmission costs and revenues would then be in balance at the pseudo-POD level, with
one rather significant exception as follows.50
45. EQUS acknowledged, however, that substantial changes in industry practices would be
required in order to implement this approach.
At present, Fortis applies the “REA Farm Service Rate 24” to all EQUS member load.
This results in a significant difference between the transmission costs that an EQUS
member creates at the POD and the charges flowing to that EQUS member under
Rate 24… This is a structural problem that also exists in the current practices for flowing
transmission costs through to REA members, one that would have to be addressed in the
requested hypothetical scenario in which EQUS might adopt an Option M type
mechanism in its own distribution tariff.51
46. Fortis took the position that its non-pooled approach would be simpler to administer than
creating pseudo-PODs as a proxy for avoided transmission costs for the REA.52
Commission findings
47. The Commission finds that there are greater potential problems and impediments
associated with the non-pooled and the pseudo-POD approaches than with the pooled approach.
48 Exhibit 22293-X0084, EQUS argument, paragraph 87. 49 Exhibit 22293-X0088, EQUS reply argument, paragraph 63. 50 Exhibit 22293-X0060, EQUS-AUC-2017APR03-008(e) to (g). 51 Exhibit 22293-X0060, EQUS-AUC-2017APR03-008 (e) to (g). 52 Exhibit 22293-X0081, FAI-AUC-2017MAY29-003.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 15
48. In concept, the non-pooled approach appears to offer some advantages: it might be easier
to implement because less information would need to be exchanged between parties and it might
have fewer attendant costs.
49. However, based on the record of the proceeding, the Commission finds that the non-
pooled approach does not align with the expectation that distribution utilities will pass through
transmission cost savings to their DG customers. The Commission is of the view a logical
relationship between the value of exempting one or more REA rate classes from paying
Option M costs and the avoided transmission costs that could be created by EQUS’ DG members
is unlikely to exist. That is, the Commission is not convinced that the credits (by virtue of
excluding Rates 24 and 29 from paying certain charges) passed on to EQUS’ DG members
would be sufficiently related to any contributions those same EQUS DG members made to the
avoided transmission costs. As a result, the non-pooled approach could lead to arbitrary results or
undesirable subsidies between customers. For example, under the non-pooled methodology, all
REAs in Fortis’ service area would be exempt from paying any share of Option M costs,
regardless of whether they have DGs connected to their system, creating a possible subsidy from
Fortis’ customers to the REAs.
50. At a conceptual level, the pseudo-POD methodology seems to address many of the
concerns raised in this proceeding. It would permit EQUS to offer its own Option M-like
program53 separate from Fortis’ distribution tariff. This would avoid or at least minimize some of
the points of contention between Fortis and EQUS, for example, on whether and to what extent
Fortis’ T&Cs should apply to EQUS (or its DG members). However, it would appear based on
the evidence on the record, that EQUS itself considers it unlikely that the pseudo-POD approach
could be implemented in the current industry framework.54 Moreover, considering the
intermingled nature of the Fortis and EQUS distribution systems, numerous pseudo-PODs would
be required to facilitate this methodology, requiring the reconciliation of data at multiple data
points, which the Commission notes could be onerous.
51. Given the potential problems associated with the two methodologies discussed above,
and the advantages of the pooled approach (described below), the Commission considers the
pooled approach to be the optimal approach to extend Option M credits to EQUS:
The pooled approach is the approach which is most aligned with the Commission’s
expectation that a distribution utility pass on transmission cost savings or credits
attributable to the operation of distribution generators to its DG customers. Under the
pooled approach, Option M credits will be calculated based upon actual metering data at
the generator and the specific POD that it is connected to, providing the volume of energy
exported by the DG and the transmission costs avoided as a result of its operation. Under
this approach, the Option M credits paid out to EQUS (and by extension, to its DG
members) will therefore best match the reduced AESO SAS charges at the POD
connected to the DG.
The pooled approach represents an extension of Fortis’ current approach of providing
Option M credits to its own DG customers and so is an already established methodology.
53 Exhibit 22293-X0088, EQUS reply argument, paragraph 73. 54 Exhibit 22293-X0060, EQUS-AUC-2017APR03-008(e) to (g).
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16 • Decision 22293-D01-2017 (October 2, 2017)
Fortis has confirmed that a completely pooled approach could be implemented to
facilitate access to the Option M credit mechanism for EQUS and other REAs, subject to
the satisfaction of other operational requirements.
52. As previously discussed, the pooled approach requires the co-operation of both parties.
This may pose the greatest challenge to the successful implementation of the pooled approach.
53. In that regard, the Commission notes that both Fortis and EQUS offered extensive
evidence and submissions regarding:
(a) The amount and kind of data and other information that Fortis will reasonably
require from EQUS to allow for the extension of Option M to EQUS.
(b) Whether and to what extent Fortis’ T & Cs need to be modified to accommodate
the extension of Option M to EQUS.
(c) The degree to which Fortis’ existing administrative framework will need to be
modified and who should bear any attendant costs.
54. The current level of disagreement between Fortis and EQUS on all of the above is
apparent on the face of the record; and, as noted previously, the successful negotiation of a
resolution to those matters is dependent on the co-operation of the parties. Nevertheless, for the
following reasons the Commission considers that issues concerning the exchange of information
and data, connection and operational requirements and any revisions to Fortis T&Cs or to its
administrative framework, are matters best handled through negotiation between Fortis and
EQUS:
EQUS and Fortis are in the best position, as owners of their respective systems with a
substantial history in operating their interconnected systems, to understand the technical
and operational requirements associated with implementing the pooled approach. The
Commission considers that permitting the parties to arrive at a solution to implement the
Commission’s decision is most likely to produce a result that is operationally and
technically feasible for both parties.
Both parties should be incented to facilitate the most efficient and effective resolution of
this matter in the interests of their respective customers and are expected to be able to
work cooperatively to do so. The Commission expects that both parties shall make any
reasonably necessary concessions to effect the Commission’s directions from this
decision.
55. The Commission is also cognizant of the fact that while this proceeding was brought by
EQUS, any resultant changes to the Fortis T&Cs and tariff will likely have the potential to
directly affect other REAs and perhaps others who are not participants in this proceeding but
who should be afforded the opportunity to offer comment and submissions regarding broader
amendment to Fortis’ tariff and T&Cs.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 17
56. For all of the above reasons, the Commission directs the following:
(a) Fortis is to extend Option M to EQUS by way of the pooled approach (as
described by the parties in this proceeding, and as summarized by the
Commission in this decision). It is the Commission’s expectation that EQUS will
then distribute the Option M credits to its DG members.
(b) Fortis and EQUS are to work cooperatively with a view to reaching consensus on:
The data and information exchange required to facilitate the extension of
Fortis’ Option M to EQUS. The Commission expects that Fortis will
implement the pooled approach with the minimum amount of information
reasonably required of EQUS and notes that Fortis will ultimately bear the
onus of demonstrating the necessity of the information it requires. The
Commission expects that EQUS will provide or facilitate the production of all
information reasonably required by Fortis. The Commission considers that
there may be cost consequences associated with an unreasonable request for
information that is not strictly required to effect the Commission’s decision in
this case or a refusal to facilitate the production or provision of information
reasonably required for the expeditious and efficient extension of Option M to
EQUS.
Any necessary amendments to Fortis’ T&Cs and tariff.
(c) Fortis is directed to submit a compliance filing to this decision that reflects any
revisions necessary to its T&Cs to comply with the Commission’s directions and
to advise what has been agreed to between Fortis and EQUS in terms of the
information to be exchanged and any operational requirements. If Fortis will be
filing an REA-related tariff matters application within the same time frame, Fortis
may choose to combine its compliance filing to this decision with that application.
(d) The Commission will provide Fortis with the option to address any associated
costs of extending Option M to EQUS either in the compliance filing or in the
REA-related tariff matters application (if they are not combined together) or in a
future Phase II application. To the extent that the compliance filing addresses the
said costs, the Commission will require a detailed description of the specific costs
that Fortis is likely to incur. In order to come to a determination on this issue, the
Commission will also require more clarity on how the costs associated with the
provision of Option M to Fortis’ DG customers are collected and how that
compares to the methodology it has proposed to collect the costs associated with
providing Option M to EQUS. Consequently, Fortis should provide an
explanation of how it currently recovers the costs associated with the payment of
Option M credits for its own DG customers, whether it is different from the
methodology it proposed to collect costs from EQUS’ DG members and finally, if
it is different, Fortis should provide reasons justifying the difference in
methodology.
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18 • Decision 22293-D01-2017 (October 2, 2017)
57. The Commission expects a resolution on the matters related to the information that needs
to be exchanged between EQUS and Fortis and any other operational requirements and may
consider an interim solution acceptable.
58. Finally, the Commission acknowledges that:
(a) There is an ongoing inquiry being conducted by the Commission on matters
relating to electric distribution system-connected generation pursuant to Order in
Council 120/2017 (OIC). One of the topics discussed in the review was related to
the credits received by distribution system-connected generators, such as
Option M. This inquiry will culminate in a report to the Minister of Energy as
directed in the OIC.
(b) If the REA-related tariff matters application to be submitted by Fortis is not
conjoined with the directed compliance filing, then the REA-related tariff matters
application or a Fortis Phase II study or both of those proceedings could involve
review and consideration of various costs associated with the payment and
administration of Option M credits.
59. Accordingly, while the Commission grants the extension by Fortis to EQUS of Option M
in this proceeding, it has done so on the basis of Fortis’ existing Option M methodology. To the
extent that methodology is affected by subsequent proceedings, future policy and/or regulatory
changes, the Commission’s directions in this decision are also subject to review and change.
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 19
4 Order
60. It is hereby ordered that:
(1) FortisAlberta Inc. shall submit a compliance filing to reflect the findings,
conclusions and directions in this decision, either by way of a stand-alone
application or as part of its REA-related matters application, by January 15, 2018.
Dated on October 2, 2017.
Alberta Utilities Commission
(original signed by)
Neil Jamieson
Panel Chair
(original signed by)
Carolyn Hutniak
Commission Member
(original signed by)
Moin Yahya
Commission Member
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
20 • Decision 22293-D01-2017 (October 2, 2017)
Appendix 1 – Proceeding participants
Name of organization (abbreviation) Company name of counsel or representative
EQUS REA Ltd. (EQUS)
McLennan Ross Barristers & Solicitors
Office of the Utilities Consumer Advocate (UCA)
FortisAlberta Inc. (Fortis)
North Parkland Power Rural Electrification Association
Alberta Utilities Commission Commission panel N. Jamieson, Panel Chair C. Hutniak, Commission Member M. Yahya, Commission Member Commission staff
K. Kellgren (Commission counsel) N. Mahbub A. Corsi A. Spurrell M. Baitoiu
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
Decision 22293-D01-2017 (October 2, 2017) • 21
Appendix 2 – Summary of Commission directions
This section is provided for the convenience of readers. In the event of any difference between
the directions in this section and those in the main body of the decision, the wording in the main
body of the decision shall prevail.
1. For all of the above reasons, the Commission directs the following:
(a) Fortis is to extend Option M to EQUS by way of the pooled approach (as
described by the parties in this proceeding, and as summarized by the
Commission in this decision). It is the Commission’s expectation that EQUS will
then distribute the Option M credits to its DG members.
(b) Fortis and EQUS are to work cooperatively with a view to reaching consensus on:
The data and information exchange required to facilitate the extension of
Fortis’ Option M to EQUS. The Commission expects that Fortis will
implement the pooled approach with the minimum amount of information
reasonably required of EQUS and notes that Fortis will ultimately bear the
onus of demonstrating the necessity of the information it requires. The
Commission expects that EQUS will provide or facilitate the production of all
information reasonably required by Fortis. The Commission considers that
there may be cost consequences associated with an unreasonable request for
information that is not strictly required to effect the Commission’s decision in
this case or a refusal to facilitate the production or provision of information
reasonably required for the expeditious and efficient extension of Option M to
EQUS.
Any necessary amendments to Fortis’ T&Cs and tariff.
(c) Fortis is directed to submit a compliance filing to this decision that reflects any
revisions necessary to its T&Cs to comply with the Commission’s directions and
to advise what has been agreed to between Fortis and EQUS in terms of the
information to be exchanged and any operational requirements. If Fortis will be
filing an REA-related tariff matters application within the same time frame, Fortis
may choose to combine its compliance filing to this decision with that application.
(d) The Commission will provide Fortis with the option to address any associated
costs of extending Option M to EQUS either in the compliance filing or in the
REA-related tariff matters application (if they are not combined together) or in a
future Phase II application. To the extent that the compliance filing addresses the
said costs, the Commission will require a detailed description of the specific costs
that Fortis is likely to incur. In order to come to a determination on this issue, the
Commission will also require more clarity on how the costs associated with the
provision of Option M to Fortis’ DG customers are collected and how that
compares to the methodology it has proposed to collect the costs associated with
Application for Orders Amending the Terms and Conditions of Service and Rate Schedules of FortisAlberta Inc. in Respect of Option M Distribution Generation Credit/Charge EQUS REA LTD.
22 • Decision 22293-D01-2017 (October 2, 2017)
providing Option M to EQUS. Consequently, Fortis should provide an
explanation of how it currently recovers the costs associated with the payment of
Option M credits for its own DG customers, whether it is different from the
methodology it proposed to collect costs from EQUS’ DG members and finally, if
it is different, Fortis should provide reasons justifying the difference in
methodology. ....................................................................................... Paragraph 56