Ancillary Services Cost Allocation

Purpose

To discuss the most appropriate cost allocation for new ancillary services (AS) proposed as part of the Restructured Energy Market (REM), as well as existing ancillary service products, engage on the cost recovery mechanism and inform stakeholders of the corresponding regulatory strategy.

Scope

The following topics will be covered in this workstream:

  • Phase 1: Cost recovery of AS in REM (R10, R30, R60, DAC)
  • Phase 2: Cost recovery of new AS not in REM (F-suite, Strategic Reserves)
  • Phase 3: Existing Ancillary Services

Background

We are revisiting the cost allocation framework for ancillary services as a result of the direction provided by the Minister of Affordability and Utilities on July 3, 2024 to allocate all transmission costs going forward based on cost causation principles.

Purpose

To discuss the most appropriate cost allocation for new ancillary services (AS) proposed as part of the Restructured Energy Market (REM), as well as existing ancillary service products, engage on the cost recovery mechanism and inform stakeholders of the corresponding regulatory strategy.

Scope

The following topics will be covered in this workstream:

  • Phase 1: Cost recovery of AS in REM (R10, R30, R60, DAC)
  • Phase 2: Cost recovery of new AS not in REM (F-suite, Strategic Reserves)
  • Phase 3: Existing Ancillary Services

Background

We are revisiting the cost allocation framework for ancillary services as a result of the direction provided by the Minister of Affordability and Utilities on July 3, 2024 to allocate all transmission costs going forward based on cost causation principles.

  • Stakeholder Updates

    Oct. 8, 2025

    Following the release of the addendum to FFR+ rationale document and received stakeholder feedback, the AESO is considering concepts and associated designs for procuring FFR. The workshop scheduled for October 21–22 is postponed in favour of a more productive session on cost causation and recovery once design decisions are made.

    Note that we have closed the associated discussion forum and will re-open it when a new date for the workshop is announced.

    Those who have registered will receive a cancellation notice by email. We apologize for any inconvenience and appreciate your understanding.

    Sept. 3, 2025

    In the

    Oct. 8, 2025

    Following the release of the addendum to FFR+ rationale document and received stakeholder feedback, the AESO is considering concepts and associated designs for procuring FFR. The workshop scheduled for October 21–22 is postponed in favour of a more productive session on cost causation and recovery once design decisions are made.

    Note that we have closed the associated discussion forum and will re-open it when a new date for the workshop is announced.

    Those who have registered will receive a cancellation notice by email. We apologize for any inconvenience and appreciate your understanding.

    Sept. 3, 2025

    In the interest of time and efficiency, we have cancelled the Phase 2 kick-off information session scheduled for September 10. Those who had registered will receive a cancellation notice by email.

    Save the Date! Hybrid Workshop – October 21 & 22, 2025

    The intent is to work with stakeholders to develop and implement methodologies and recovery mechanisms for the costs incurred to procure frequency response products (FFR, FRR, FNDR, FFR+) needed to meet system reliability requirements. We will present initial cost allocation starting points derived from the cost causation data collected and provide opportunities for participants to ask questions, share feedback on the proposed approaches and present alternate proposals.

    Registration information, discussion board and pre-read materials will be provided in the coming weeks.

Page last updated: 01 May 2026, 12:58 PM