AUC Updates the Process for Module B of the Inquiry on Renewable Electricity Generation

On Tuesday, October 24, 2023, the Alberta Utilities Commission (AUC or Commission) released a Notice providing further details on the process for Module B of the inquiry regarding policies and procedures for the development of renewable electricity generation. The Notice outlines key deadlines, details on expert reports commissioned by the AUC, the processes available for stakeholder participation, and the availability of participant funding from the AUC.

Next Steps

The AUC’s most recent announcement sets out the structure and procedural steps the AUC will use to consider the final issue that was identified as in support of the approval pause period.

As set out above, Module B will be of a more technical nature compared to Module A. It is notable that the deadline for parties to provide written submissions responding to the Module B Expert Reports is scheduled for the same day the General Approvals Pause Regulation, O.C. 172/2023 expires, i.e., February 29, 2024.

Despite these timelines, it is still expected that the AUC will complete and provide the report on its findings and observations from the Inquiry (i.e., both Module A and Module B), to the Minister of Affordability and Utilities by the March 29, 2024, deadline.

Background

As discussed in our previous post, the AUC’s Inquiry has been separated into two modules (Module A and Module B), each with separate processes and timelines to explore the five key issues identified in the Order-in-Council. We also previously set out the details on the policies and processes for Module A of the inquiry in our post from October 6, 2023.

AUC Update Announcement on Module B Process

The AUC’s most recent Notice is focused on the process for Module B, which will explore the fifth, and final, issue identified in the Order-in-Council:

• Considerations of the impact the increasing growth of renewables has on both generation supply mix and electricity system reliability.

  The AUC notes that the Alberta Electric System Operator (AESO) is undertaking complementary work relating to system reliability, which the AUC intends to take into account to support the Inquiry.

  Expert Reports

  The AUC has commissioned two expert reports: one from London Economics International LLC (LEI) and one from Longview Communications & Public Affairs (Longview) (collectively, the “Module B Expert Reports”). Together with the four expert reports commissioned by the AUC for Module A, there will be a total of six expert reports commissioned by the AUC for the Inquiry. Below, we have summarized the scope of work for the Module B Expert Reports as described in a letter from the AUC filed as Exhibit 28542-X0004 on the AUC’s e-Filing System in Proceeding 28542.

  The Module B Expert Reports are expected to be made publicly available on the AUC’s e-Filing System in Proceeding 28542 no later than February 7, 2024. A technical meeting for experts to answer questions from interested parties about the Module B Expert Reports is scheduled for February 14, 2024. It is expected the AUC will release further details on registration, location, and timing of this Technical Meeting in due course.

  LEI Expert Report

  The LEI Expert Report will provide an independent economic and technical study into the impact of additional renewables generation on the electricity sector. LEI’s work will include:

• A review and assessment of prior studies and reports published by the AESO that evaluate the evolution of the Alberta electric system from a technical and/or economic perspective in order to inform reliability and affordability questions; and
• Following stakeholder engagement, LEI will deploy a technical, simulation-based assessment of future wholesale market fundamentals under the current energy market design over the long term, in order to evaluate future system reliability (e.g., resource adequacy). The simulation modelling will project the reliability and market price outcomes under the current energy-only market design and policy framework.

An in-person technical meeting will be held at the AUC’s Calgary office on November 9, 2023, from 1pm to 4pm to discuss and obtain feedback on LEI’s approach to developing its simulation-based assessment. It is expected the nature of the feedback LEI will be looking to elicit in this meeting will be focused on methodology and inputs. Individuals wishing to attend this technical meeting must email info@auc.ab.ca by November 7, 2023.

Longview Expert Report

The Longview Expert Report will conduct a qualitative assessment of the attractiveness of the Alberta power market. Longview’s assessment will:

• Gauge current perception of Alberta’s power market by relevant generation developers (incumbent and non-incumbent) and sources of capital in order to review attractiveness of Alberta’s market structure, views on potential market structure changes, and an assessment of the appetite for merchant power risk; and

• Identify the drivers behind stakeholder perception of Alberta’s power market.

Longview’s assessment will involve two phases of confidential interviews of stakeholder groups divided as follows:

-       Phase One will involve interviewing stakeholder groups who have an intimate understanding of the shifting perspectives on Alberta’s investment climate (i.e., market analysts and capital providers);

-       Phase Two will involve a separate round of interviews with project developers, sponsors, industry associations, and Indigenous-owned enterprises. This second round of interviews will be based around a series of themes which Longview will develop based on the responses from that first round of interviews. No additional information has been provided by the AUC, or Longview, with respect to the specific stakeholders being interviewed or when the interviews will take place. However, based on the Expert Letter, it is assumed that these interviews will take place by invitation-only from the AUC and Longview, with no option for public participation.

Options for Participation

The options available for interested parties to participate in Module B will be more limited than Module A. Specifically, parties’ participation will be confined to written submissions providing feedback and/or responding to the Module B Expert Reports. Written submissions will only be accepted through the AUC’s e-Filing System, which will require interested parties to register to participate in Proceeding 28542. Registered parties will have until February 29, 2023, to submit written submissions. All submissions will be publicly available unless a request is made in advance to the AUC for a confidential information filing.

The AUC’s most recent announcement does not indicate whether the AUC will question parties on their written submissions. It is assumed, however, it will not be based on the relatively short timeline between the due date for written submissions and the March 29, 2023, deadline for the AUC to provide its Inquiry report to the Minister of Affordability and Utilities and the limited scope of these written submissions.

No Participant Funding Available

Unlike Module A where limited funding is to be available to parties for the preparation of expert reports in support of their filed submissions, there will be no funding available to parties participating in Module B. The AUC indicated this is due to the “…. the issues and processes outlined in the Notice.” No further reasons or details were provided.

Summary of Key Dates

If you have any questions regarding participation in the inquiry, please contact a member of the McLennan Ross Environmental & Energy group.