Congestion Management Framework

Important Dates & Materials

December 1 | Statutory Declarations due

November 3 | Stakeholder Feedback on Incumbency Treatment due

October 9 | Incumbency Treatment and GUOC Refunds session recording posted

October 7 | Incumbency Treatment and GUOC Refunds Information Session materials

Stakeholder Update | October 6, 2025

Today, the AESO received direction from the Minister of Affordability and Utilities regarding Incumbency recognition and GUOC refund implementation. Learn more

Design Objective & Key Challenge

Develop a framework for TRP, OTP and REM that balances Government policy, investability and affordability.

Components of the Congestion Management Framework

Locational Marginal Pricing (LMP)

  • Instead of one price for all of Alberta, prices vary across Alberta at individual nodes
  • Congestion impacts local prices

Financial Transmission Rights (FTRs)

  • Financial protection against LMP risk (price differences between nodes)
  • Potential addition to the congestion framework to manage LMP risk

Optimal Transmission Planning (OTP)

  • Alternative to congestion-free transmission planning
  • Optimize transmission by planning and building transmission for supply only when it provides a net benefit to Albertans

Transmission Reinforcement Payment (TRP)

  • Non-refundable upfront payment by new generators
  • Calculated as a function of proximity to capacity, technical attributes/characteristics and cost of reinforcing the transmission system

Important Dates & Materials

December 1 | Statutory Declarations due

November 3 | Stakeholder Feedback on Incumbency Treatment due

October 9 | Incumbency Treatment and GUOC Refunds session recording posted

October 7 | Incumbency Treatment and GUOC Refunds Information Session materials

Stakeholder Update | October 6, 2025

Today, the AESO received direction from the Minister of Affordability and Utilities regarding Incumbency recognition and GUOC refund implementation. Learn more

Design Objective & Key Challenge

Develop a framework for TRP, OTP and REM that balances Government policy, investability and affordability.

Components of the Congestion Management Framework

Locational Marginal Pricing (LMP)

  • Instead of one price for all of Alberta, prices vary across Alberta at individual nodes
  • Congestion impacts local prices

Financial Transmission Rights (FTRs)

  • Financial protection against LMP risk (price differences between nodes)
  • Potential addition to the congestion framework to manage LMP risk

Optimal Transmission Planning (OTP)

  • Alternative to congestion-free transmission planning
  • Optimize transmission by planning and building transmission for supply only when it provides a net benefit to Albertans

Transmission Reinforcement Payment (TRP)

  • Non-refundable upfront payment by new generators
  • Calculated as a function of proximity to capacity, technical attributes/characteristics and cost of reinforcing the transmission system

  • Stakeholder Updates

    Information Session | October 7, 2025

    Purpose

    We will host a virtual information on October 7, 2025 from 9:00 am to 12:00 pm. We will present more information on implementation of incumbency treatment (transition payments and eligibility) with market participants. We will also provide more information on the one-time opportunity for GUOC refunds upon project cancellation.

    Stakeholders will have opportunities to ask questions throughout the session.

    Registration

    Click here to register for the Teams Webinar

    Materials

    Will be available at the session under "AESO Materials"

    Information Session | September 9, 2025

    Purpose

    The AESO will host a virtual information session on September 9, 2025 from 9:00 a.m. to 12:00 p.m.. We will provide stakeholders with an update on decisions and opportunities for further discussion related to the overall Congestion Management Framework components:

    • Optimal Transmission Planning (OTP) Methodology,
    • Locational Marginal Pricing (LMP),
    • Transmission Reinforcement Payment (TRP) and
    • Financial Transmission Rights (FTRs).

    Stakeholders had opportunities to ask questions throughout the session.

    Materials

    Are available under "AESO Materials"

  • Background

    Government Policy Directions

    July 2025 Direction Letter

    • The AESO will also continue to work with stakeholders on developing a long-term congestion management approach to provide appropriate risk management to support ongoing investability in our market.

    July 2024 Direction Letter

    • Move away from the current zero-congestion planning standard to an optimally planned transmission planning standard
    • Allocate new transmission infrastructure costs and all ancillary services costs based on cost causation principles

    December 2024 Direction Letter

    • AESO will develop a market-based congestion management mechanism that recognizes incumbency, provides impacted generators with a means of managing the dispatch risk arising from congestion constraints
    • Implement a cost allocation framework for new transmission infrastructure based on cost-causation principles by requiring new generators to contribute to transmission infrastructure costs by replacing the Generating Unit Owner’s Contribution (GUOC) with an upfront and non-refundable TRP
    • TRP rates will be calculated as a function of the suppliers’ proximity to transmission capacity, their technical attributes and characteristics and the cost of reinforcing the transmission system
Page last updated: 15 Oct 2025, 02:10 PM