Operational Plan 2020-2021 - Alberta's independent utilities regulator - Alberta Utilities Commission
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Alberta’s independent utilities regulator Operational Plan 2020-2021
O
ur operational plan sets out the
work we intend to do during
priorities established in previous planning
cycles. Those initiatives are included in 4
the 2020-2021 fiscal year in a the Additional Initiatives section of this Competition and Markets
straightforward way that links our document.
planned work to the strategic themes set
out in our AUC Strategic Plan 2019-2022 Supporting our strategic plan and this
6
Infrastructure
and to the outcomes we are intending to operational plan, as a foundation, are
influence. the core base-load responsibilities of
our work as a regulator. While we pursue
8
The operational plan also incorporates the commitments in this operational Efficiency and Limiting Regulatory Burden
some of our efficiency and regulatory plan, we remain committed to our vision
burden reduction initiatives, demonstrating of delivering innovative and efficient 12
how we intend to improve our workflow regulatory solutions in all of our work. People
and enable innovation.
The operational plan additionally includes
Effect of COVID-19 14
Additional initiatives
the performance measures against which This plan is currently the best
16
we measure our work and achievements, representation of our planned projects. We
and hold ourselves accountable. have re-evaluated our work because of the
impact of COVID-19. A top priority during Measuring success
Our operational plan and related work is the crisis is to work with government,
organized around four strategic themes industry and consumers to implement the
set out in our strategic plan. They are: province’s Utility Payment Deferral Program
competition and markets, infrastructure, to provide support to Albertans. Who we are
efficiency and limiting regulatory burden,
and people. The AUC has also taken a hard look at The Alberta Utilities Commission is an independent, quasi-judicial agency that
regulates investor-owned natural gas, electric and water utilities and certain
what its priorities should be throughout this
municipally owned electric utilities.
Our planned initiatives are described under pandemic. We have adopted a flexible and
one of those four key themes, although pragmatic approach to regulation, and we The AUC is responsible to meet public interest considerations in the safe and reliable
in some cases the planned work delivers have suspended or relaxed some activities delivery of utility services and the rates charged to customers, and that utilities have
results across two or more objectives. so that resources can be most efficiently the opportunity to earn reasonable returns.
allocated, both for the AUC and our utility
It is important to recognize that our work is sector stakeholders. As a result, some of The AUC ensures that electric facilities are built, operated and decommissioned
efficiently and responsibly.
not limited to the initiatives supporting the our planned work has been deferred to the
four themes of our strategic plan. next planning period. It has regulatory oversight of aspects of the wholesale electricity market in Alberta as
We have identified other initiatives well as the retail gas and electricity markets. It receives no government funding.
that are either new or build on existing - Mark Kolesar, Chair
Co mp et i tion and
market s 4. Review AUC Rule 017: Procedures
and Process for Development of ISO
2. Collaborate with the Alberta Electric
Rules and Filing of ISO Rules with
System Operator (AESO) and the Electric vehicles and the Distribution
the Alberta Utilities Commission to
The challenge: Department of Energy (DOE) to design
consider streamlining the AESO’s filing System Inquiry (Rates)
and implement a robust regulatory
The effects of advancing requirements regarding its consultation
framework for electrical energy storage Outcome: Electric vehicle charging
technologies on both the industry process (Market Oversight and
in Alberta (Rates). is one example of how new
and on consumers have the potential Enforcement).
to disrupt traditional utility business technologies, changing societal
Outcome: The regulatory framework values and expectations, and more
models and rate structures. There Outcome: A more proportionate and
is modernized to accommodate the consumer-choice options are driving
is a requirement to examine the role efficient approach to regulation.
benefits of new technology. the need for a smarter, more flexible
of incumbents and new entrants
in the technology-driven market system.
transition and to assess and adapt
the regulatory framework, including 5. Obtain and summarize stakeholder
3. Review and update interconnection
the enablement of competition where feedback on the power plant self-supply
practices to create a standard and
barriers exist. export issues on behalf of the DOE
transparent process which provides
(Facilities).
for consistent and nondiscriminatory
access and treatment by the incumbent
Outcome: A clear, concise response to
1. Evaluate financial settlement practices utilities (Market Oversight and
the DOE summarizing the background
to ensure prices reflect the value of new Enforcement).
to the self-supply and export issue and
services to the system; and advance stakeholders views on the options to
market initiatives and enhancements Outcome: Processes set out roles
address those issues and the market
in a timely way to make the energy- and responsibilities which are clearly
and tariff implications of each option.
only wholesale market more price defined and understood.
responsive and accommodating
to technological innovation and
competition (Market Oversight and
Enforcement).
Outcome: An efficiently operated
electricity market, with rules that enable
new energy products, services and
pricing.
4 5
3. Consider alternative rate-setting
frameworks for transmission utilities
(e.g., longer test periods, revenue
requirement incentives or PBR-type
the AUC’s Indigenous consultation structures) (Rates). Revision of Rule 007:
The challenge: requirements so that they are better Applications for Power Plants,
coordinated with the consultation Outcome: The ratemaking framework Substations, Transmission Lines,
A strong and efficiently operating requirements of other government reduces regulatory burden and Industrial System Designations
energy infrastructure is important agencies. improves incentives for transmission and Hydro Developments
to the health of Alberta’s economy. utilities to operate efficiently. Improved (Facilities).
AUC decisions on new projects Outcome: Regulatory burden is reduced incentives should result in lower costs
and related pricing influence by eliminating unnecessary information for customers than they otherwise Outcome: Revised rule to reflect the
the level of investment, while its requirements and improving would have been over time. evolution of electricity infrastructure
processes ensure public interest application-processing efficiency. to take into account advancing
and participation responsibilities
renewable technology including
are met. Our objective is to develop
improvements in wind and solar
polices and decisions in pricing, cost 4. Conclude the Commission-initiated technology as well as battery storage.
allocation, cost recovery, social and 2. Evaluate and explore the use of non- Distribution System Inquiry with the
environmental considerations and market valuation in the Commission’s purpose of mapping out the key issues
safety that both support the certainty, legal requirement to assess the related to the future of the electric
confidence and independent more granular metering data; re-design
economic effects of a facility project distribution grid (Rates).
expertise necessary for investor of utility rates to send more effective
in its review process, by applying
confidence and maintain a safe, price signals; examine distribution
established principles to specific AUC Outcome: Support the broader
reliable and efficient infrastructure. and transmission system planning
circumstances (Facilities). development of a regulatory framework
and reliability to ensure overall system
adapted to match the evolution of the
optimization, control costs, address
Outcome: Non-market valuation electric system.
issues (e.g., tariffs) surrounding
1. Revise and rewrite AUC Rule 007 techniques may allow the Commission
distributed energy resources and
(Facilities). to better understand the economic
electric vehicle charging; accommodate
• A more effective and efficient costs or benefits of projects that are
other consumer choice technologies
process to: (i) address new and not currently assigned a market value 5. Initiate follow-up proceedings required
(Rates).
evolving facility projects such as (e.g., habitat loss, airshed impacts, to address the observations or
battery storage, wind and solar; (ii) etc.). principles identified in the Distribution
Outcome: Adapt the regulatory
consolidate and streamline relevant System Inquiry. Possible topics include:
framework to accommodate the
information requirements and enabling of, and customer access to,
evolution of the electric system.
eliminate outdated requirements;
Empower customers with access to the
implement a trusted-traveller
data and technologies required to make
approach to low-risk applications
informed choices concerning energy
whereby applications meeting
use.
prescribed information requirements
will be approved subject to
compliance audits; and (iii) update
66 7
Outcome: Quantified or monetized 7. Assess the effectiveness of the
benefits realized from our efficiency new performance standards and
initiatives to better understand the other process changes for facilities
value of the improvements for both our applications implemented in Bulletin
internal costs and the costs of utilities 2019-15 (Facilities).
and stakeholders.
Outcome: Improvement and refinement
and monitor every individual efficiency
of the facilities application review
The challenge: project from approval through
process.
implementation, specific AUC files and
5. Enhance information sharing on AUC
How can the AUC improve its be assessed for effectiveness (Chief
application processes by conducting
workflow to deliver more cost- Executive).
an application workshop to guide
effective, timely and proportionate applicants through requirements. 8. Implement internal procedural changes
regulation, minimizing burden to Outcome: Improved effectiveness and
Further, the AUC Facilities Division allowable under the existing Rule 011:
industry and ensuring consumers efficiency in the AUC’s operational
will meet with prospective applicants Rate Application Process for Water
bear only the lowest prudent cost of performance and decision making
prior to application filing to answer Utilities. These procedural changes
regulation? processes.
questions about the application process may include the use of more negotiated
(Facilities). settlements, the introduction of
1. The AUC’s strategic plan objective round-table discussions and technical
to improve efficiency and limit Outcome: Improve understanding of meetings to improve the time and cost-
3. Review AUC Rule 022: Rules on Costs in
regulatory burden includes: stakeholder AUC application requirements and efficiency of water utility rate application
Utility Rate Proceedings governing costs
roundtables to identify and implement reduction of processing timelines for processes (Rates).
that regulated entities are ordered to
streamlining measures; a dedicated information requests and applications.
pay by the AUC to interveners in AUC
AUC Regulatory Burden Reduction Outcome: A more efficient, productive
applicant-driven proceedings (Rates).
Task Force to reduce bottlenecks; and timely process, proportionate to
Project Green Light, to facilitate staff- small-scale utilities.
Outcome: Improved efficiency in the
led development of new ways of 6. The AUC will work with the Aboriginal
AUC’s decision making processes
doing business; and the government’s Consultation Office and other
through improved practices and
red tape reduction initiative (Chief government of Alberta offices that
procedures as they relate to the
Executive). address Indigenous consultation 9. Implement a process that reviews
participation of interveners and
to coordinate requirements and the 36-month application forecast with
associated cost awards in rate
Outcome: Improved effectiveness and explore shared training opportunities
proceedings. utilities and intervener groups with the
efficiency in the AUC’s operational (Facilities).
goal of spacing important applications
performance and decision making
out to utilize resources more effectively
processes. Outcome: Indigenous consultation
practices will be consistent with (Rates).
4. Develop an assessment tool that
those for similar projects regulated
measures the impact of AUC regulatory Outcome: Optimizes the use of
2. A four-person AUC group will manage by other agencies and government
activities and incorporate results into resources required from the AUC,
the AUC’s efficiency and regulatory departments to promote consistency
a comprehensive annual report card customer groups and the utilities.
burden reduction efforts and work and predictability for applicants and
(Chief Executive).
plan, and report monthly. It will track stakeholders.
8 9
10. Consider alternative methods
for testing and reviewing electric
transmission capital projects or
additions, including Implementing
process improvements and
considering alternatives for reviewing
capital additions that could be made
to the direct-assigned capital deferral
account process in the future (Rates).
Outcome: Focused record development
results in timely approvals.
11. Establish new performance metrics From left to right: Joan Yu, Josephine Yau, Kloria Wen, Heidi Ritchie, JP Mousseau, Allan Anderson
for the development of the record for
intervener costs applications and 12. Improved coordination with Alberta
Stage 1 review and variance 13. Analyze best practices of
Environment and Parks (AEP) on
proceedings. Currently, both processes comparable regulatory agencies
industrial approvals for thermal plants Power plant application workshop
are guided by internal standards and referral reports for renewable in Canada and the U.S. to gain
information about common (Facilities)
that do not have external record projects to better align the AUC
development metrics (Facilities and and AEP processes and approvals responsibilities and regulatory
Outcome: Power plant application
Rates). (Facilities). processes in order to continue to
workshop for renewable applicants
develop benchmark performance
streamlines both preparation and
Outcome: Measurable, external facing Outcome: Reduced regulatory burden, measures (Chief Executive). processing of wind and solar applications.
performance standards to promote smarter, more coordinated and efficient Applicants, AUC and other government
accountability and consistency in the processes. Outcome: Identify opportunities agencies such as Alberta Environment
development of the record for costs to apply different processes at and Parks provide clarity about how to
and review and variance applications the AUC with the objective of prepare facilities applications and better
will ensure timely decisions. improved efficiency and reduced understand regulatory requirements.
regulatory burden.
10 11
People
The challenge:
As competitive forces and technological advancements
create new demands and begin to dramatically reshape the
utilities sector, how can the Commission meet the challenge
of attracting, developing and retaining people with the skills,
experience and education required to meet these demands?
1. Expand on experiential learning, project financial assessment of investments
leadership and external learning and in new technology and the analysis of
development opportunities for our data generated by advanced information Conduct an environment scan to identify the skillset required to keep pace
emerging leaders (Corporate Services). technology (Corporate Services). with an evolving utilities industry (Corporate Services).
Outcome: A roster of recognized Outcome: Professional, savvy and Outcome: Modernize the AUC’s personnel competency requirements
industry technical experts with capable regulator. to evolve core and technical competency areas beyond traditional
established leadership skills. expertise.
3. Develop a more decentralized,
2. Develop educational material with an multi-disciplinary and team-based
emphasis on internal competency 4. Enhance the AUC’s leadership development program with a focus on preparing a
approach to our work (Chief Executive).
development including evolving rate diverse group of emerging leaders to meet the technical and leadership demands
design expertise, how emerging required in a changing environment (Corporate Services).
Outcome: A more agile and
technologies will affect energy grids, innovative regulator.
consumer behaviour, the operation of Outcome: Identification and development of a diverse group of future leaders that
emerging competitive markets, the possess the required technical and leadership skills to succeed the current leadership
team and face the challenges ahead.
12 13The challenge:
From left to right: Stephen Bruce,
In approaching our work for this operational planning period we
Dan Woodland, Darren Scholz
have aligned our efforts with the strategic objectives identified in
our strategic plan. Of course, our work is not limited to the initiatives
tied to our strategic objectives. We are also focused on how we can
improve and evolve our approach in other areas of our work. Formalize the AUC information technology cloud-computing strategy and
timeline (Corporate Services).
1. Initiate a process to consider inter- 3. Pursue reforms to AUC Rule 027: Outcome: Application of efficient and emerging information technologies.
temporal issues related to depreciation Specified Penalties for Contravention
including net salvage and other agreed- of Reliability Standards relating to 5. Review of policy changes brought 7. Performance-based regulation:
to matters (Rates). the lag time between the approval of forward by Measurement Canada • Develop a plan for rebasing of
new or revised reliability standards (Market Oversight and Enforcement). the subsequent generation of
Outcome: One-time consideration or the removal of obsolete reliability performance-based regulation (PBR)
of issues affecting multiple utilities standards and the inclusion of the new Outcome: Market participants that will occur after the current 2018-
will provide certainty, consistency or revised reliability standards. Review understand and comply with 2022 term (Rates).
between the utilities and efficiency for AUC Rule 019: Specified Penalties for Measurement Canada’s metering
all parties going forward as issues will Contravention of ISO Rules to consider requirements. • AUC Rule 002: Service Quality and
not need to be reconsidered in multiple the Market Surveillance Administrator’s Reliability Performance Monitoring
proceedings. request to amend the penalty table and Reporting for Owners of Electric
(Market Oversight and Enforcement). Distribution Systems and for Gas
Distributors will also be reviewed
Outcome: A flexible, proportionate 6. Upgrade current information technology
to include the distribution utilities’
2. Proactively engage stakeholders to approach to enforcement and market with a view to extend the life of the
asset-management program (Market
enable better understanding of our rules. AUC’s regulatory recording-keeping
Oversight and Enforcement).
compliance and enforcement activities system (eFiling System) and support
(Market Oversight and Enforcement). Project Green Light initiatives requiring Outcome: Continue providing strong
information technology system incentives for distribution utilities to
Outcome: Market participants 4. Revision of AUC rules (e.g., Rule 032: investment (Corporate Services). operate efficiently, provide lower rates
understand and comply with their Specified penalties) (Market Oversight for customers than they otherwise
regulatory obligations under the AUC’s and Enforcement). Outcome: Identification and would have been.
rules, decisions and orders to ensure maximization of current investment
consumers are protected. Outcome: Timely and proportionate in the AUC eFiling System to allow
consumer protection. for prolonged use and more efficient
processes.
14 15The AUC is committed to being a performance-based organization.
We will report the progress we have made in delivering on our commitments
in our AUC Annual Report Card to our stakeholders that will be published on
our website.
Those commitments arise from three aspects of our work:
• Our established legacy performance measures formerly housed in our
rolling three year business plans.
• The planned initiatives set out in our strategic plan and this Operational
Plan.
• The progress we have made on improving efficiency and limiting
regulatory burden, including our progress in reducing regulatory
requirements as required by the Alberta government’s red tape reduction
plan.
The published AUC Annual Report Card will provide clear, transparent and
comprehensive information that will allow stakeholders to better understand
and assess our progress in delivering on our commitments and meeting our
organizational objectives.
16Vision:
To be a trusted leader that delivers innovative and
efficient regulatory solutions for Alberta.
AUC 2019-2022 Strategic Plan:
http://www.auc.ab.ca/Shared%20Documents/2019-2022StrategicPlan.pdf
AUC Annual Report Card:
Inaugural report to be issued in June 2020
Contact us:
www.auc.ab.ca Calgary: Edmonton:
info@auc.ab.ca Eau Claire Tower 106 Street Building
310-4282 (in Alberta) 1400, 600 Third Avenue S.W. Tenth Floor, 10055 106 Street
1-833-511-4282 (outside Alberta) Calgary, Alberta T2P 0G5 Edmonton, Alberta T5J 2Y2You can also read
