Application Approved

The AUC approved the AESO's 2022 Deferral Account Reconciliation (DAR) & DAR Methodology Revision Application as filed on August 1, 2023. For more details, read Decision 28293-D01-2023.

Introduction

In accordance with section 14 (3) of the Electric Utilities Act, S.A. 2003, c. E‑5.1 (EUA), the AESO is managed so that, on an annual basis, no profit or loss results from its operation. The Deferral Account Reconciliation (DAR) process is one piece of the broader process the AESO uses to ensure no profit or loss results from its transmission operations. The AESO uses deferral accounts to accumulate differences between revenues collected and costs incurred in providing services to market participants, in this case, system access services.

This engagement is a continuation of the AESO's on-going work to improve and modernize the ultimate settlement of the transmission function (i.e., no profit or loss end state) which has included approved methodology changes to Rider C, Deferral Account Adjustment Rider, DAR as well as the priority to file annual tariff updates to efficiently minimize amounts collected or refunded through Rider C (described in the AESO's Amended 2018 ISO Tariff Application and approved on a final basis by the Alberta Utilities Commission (AUC or Commission) in Decision 22942-D02-2019).

The AESO has historically highlighted intergenerational equity and fairness as principles upon which the current DAR methodology is based.

Purpose

The AESO is seeking to engage with stakeholders to improve and modernize the current approach to calculating the annual DAR to provide value add for industry as a whole as it relates to this essential annual activity. Including:

• Educate and expand stakeholder knowledge of the annual DAR process;
• Explore opportunities for modernization;
• Perform cost-benefit analyses; and
• Implement efficiencies.

The AESO plans to do this in two phases:

Phase 1 (priority action): Limit application of retrospective DAR settlement from "infinite" production years to a maximum exposure of five years.

Phase 2: Continue to modernize the DAR process further by working with interested stakeholders to test timing, resources, and resulting value requirements, and to develop options that more efficiently achieve DAR objectives for rate payers and the AESO.