Relevant Government Direction

On July 2024, the Minister of Affordability and Utilities (MAU) provided the AESO with a direction letter noting that the government decided to move away from zero-congestion transmission planning standard to an optimally planned transmission planning standard and allocate new transmission infrastructure costs and all ancillary services costs based on cost causation principles.

In a letter dated December 10, 2024, the Minister further directed the AESO to “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 Transmission Reinforcement Payment (TRP).

• These payments will have no upper limit, a floor of $0/megawatt, and will apply to both transmission-connected and distribution-connected generators.
• 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.”

Transmission Reinforcement Payment (TRP)

By removing the cap and refundability requirements TRP can be used to send out effective price signals.

Supply System Access Service (SAS)

Moving away from a zero-congestion transmission planning standard means that generators may have to deal with congestion during the life of their project. Changes may have to be made to the terms and conditions of the tariff to reflect the level of SAS on a transmission system that allows congestion.

The AESO has been directed to recover line losses through a system wide average starting on January 1, 2027. The current methodology for line losses is very complex and creates a lot of volatility as new entrants connect and changes are made to the transmission system. Moving to system wide average transmission losses will reduce the complexity and volatility.