Important Dates & Materials

June 23 - 25, 2025 | OTP & TRP Sprint 2

• Virtual registration
• High-level agenda

June 3, 2025 | Stakeholder Alternate Framework Proposals Responses Posted

June 2, 2025 | Consolidated Supplemental Insights on TRP posted

Purpose

To develop (with stakeholder input), administer and execute a Transmission Reinforcement Payment (TRP) that effectively functions with the transmission regulation to obtain a more efficient transmission system

Stakeholder Update | OTP & TRP Concurrent Engagements

The AESO has heard from stakeholders about how its approach to Optimal Transmission Planning (OTP) could include other elements that would inform the decision on whether to proceed with transmission development, like the payment of a Transmission Reinforcement Payment (TRP) by new generators. The AESO will engage and develop OTP and TRP concurrently to ensure that the signals and decisions driven by each set a transmission framework that supports Alberta’s affordability, reliability, and sustainability objectives. As part of the TRP engagement, the AESO will also engage on how this new transmission framework works with the Restructured Energy Market (REM) to provide siting signals for generations in a manner that recognizes incumbency and supports investability and economic efficiency.

For the TRP engagement, the AESO will propose and seek feedback on TRP starting points and options, as well as provide an opportunity for stakeholders to submit their TRP proposals.

Scope

• Methodology for calculating TRP rates – granularity of rate, soft cap, timing, qualitative/quantitative assessment, technology, proximity to transmission
• Changes to terms and conditions of the tariff – changes required to align with regulation, additional enhancements for efficiency and clarity, process to collect TRP, timing, and consequences
• Treatment of existing refunds held by AESO – status quo, accelerated refund process. Including transition period
• What Supply Transmission Service (STS) contract capacity means
• How Optimal Transmission Planning (OTP) and TRP impact System Access Service (SAS)

The following topics are out of scope for this engagement:

• OTP Design
• REM Design

Background

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.