Bill 27 — Second Session, 24Th Legislature, 47 Elizabeth Ii the Legislative Assembly of Alberta B Ill 27 Elec Tr Ic U Tilities A M En D M En T A C T, 1998 (Legislature 24, Session 2)

L24 S2 980

Alberta — Bills

1998 BILL 27 Second Session, 24th Legislature, 47 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA B ILL 27 ELEC TR IC U TILITIES A M EN D M EN T A C T, 1998 THE MINISTER OF ENERGY First Reading Second Reading Committee of the Whole Third Reading Royal Assent

B ill 27 B ILL 27 1998 ELEC TR IC U TILITIES A M EN D M EN T A C T, 1998 (Assented to , 1998) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: Amends SA 1995 cE-5.5 1 The Electric Utilities Act is am ended by this A ct. 2

Section 1 is am ended (

a) in subsection (1) (

i) by renum bering clause (

a) as clause (a.4) and adding the follow ing before clause (a.4): (a) “affiliate” has the meaning given to it in the B usiness Corporations Act; (a.1) “affiliated retailer” means a retailer that is an affiliate of the owner of an electric distribution system; (a.2) “balancing pool” means the balancing pool established by the Power Pool Council pursuant to the regulations; (a.3) “billing” means the preparation of an account for all charges arising from the generation, transmission and distribution of electricity to a customer, including taxes, franchise fees and balancing pool credits or charges; (ii) by adding the follow ing after clause (b): (b.1) “customer” means a person purchasing electricity for that person’s own use; 1

Explanatory N otes 1 Amends

chapter E-5.5 of the Statutes of Alberta, 1995. 2 Adds new

definitions.

Section 1(1)(c), (h), (

i) and (

x) presently read: 1(1) In this Act, (c) “dispatch” means a direction from a person appointed under

section 9(1)(c) (h) “eligible person” means any of the following: (

i) the owner of a generating unit; (ii) the owner of an electric distribution system; (iii) the Transmission Administrator; (iv) an importer of electric energy to Alberta or an exporter of electric energy from Alberta if and to the extent that the arrangements governing the exchange of electric energy and system support services between the interconnected electric system in Alberta and electric systems in jurisdictions bordering Alberta allow for importers and exporters; (i) “entitled electric distribution system” means an electric distribution system that is owned by any of the following: (

i) Alberta Power Limited; (ii) TransAlta Utilities Corporation; (iii) the City of Calgary; 1 Explanatory Notes

(b.2) “customer class” means a group of customers who have similar characteristics relating to (

i) the amount of electricity they consume, and (ii) the cost of providing electricity services to them; (b.3) “direct access customer” means a customer whose consumption of electricity is measured by a time-of-use meter and who (

i) receives electricity from the interconnected electric system at a voltage level of 25 000 volts or more, (ii) is able to increase or decrease its consumption of electric energy or system support services within 60 minutes of receiving a dispatch, or (iii) meets the requirements set out in the regulations; (iii) in clause (

c) by striking out “or” at the end of subclause (i), adding “or” at the end of subclause (ii) and adding the follow ing after subclause (ii): (iii) to a customer to increase or decrease the amount of electric energy or system support services to be consumed by the customer within a specified period; (iv) by adding the follow ing after clause (c): (c.1) “distribution access service” means the service required to transport electricity to customers by means of an electric distribution system; (

v) by adding the follow ing after clause (g): (g.1) “electricity services” means the services associated with the provision of electricity to customers, including (

i) the exchange of electric energy through the power pool, (ii) making financial arrangements to manage financial risk associated with the pool price, 2

(iv) the City of Edmonton; (

v) the City of Lethbridge; (vi) the City of Red D eer; and is subject to the obligations and entitled to the entitlements set out in

Part 4; (x) "regulated generating unit” means a generating unit listed in the

Schedule (

i) as it exists on the coming into force of this Act, or (ii) as modified in accordance with regulations made under

section 42, until it is removed from regulated service; 2 Explanatory Notes

(iii) distribution access service, (iv) system access service, (

v) system support services, (vi) billing, (vii) metering, (viii) maintaining information systems, and (ix) any other services specified in the regulations; (vi) in clause (

h) by adding the follow ing after subclause (iv): (

v) the owner of an industrial system; (vi) the purchaser of a power purchase arrangement under

Part 4.1; (vii) a direct access customer; (vii) in clause (

i) by repealing subclauses (iii) and (iv) and substituting the follow ing: (iii) Enmax Power Corporation; (iv) Edmonton Power Inc.; (viii) by adding the follow ing after clause (o): (o.1) “information systems” means systems for collection and dissemination of data that identify individual customer consumption of electricity from the interconnected electric system; (ix) by adding the follow ing after clause (p): (p.1) “metering” means the purchase, installation, operation and reading of a meter that measures and records the amount of electricity consumed by a customer; (

x) by repealing clause (

x) and substituting the follow ing: (x) “regulated generating unit” means (

i) a generating unit listed in

Part 1 of the

Schedule 3

3 Explanatory Notes

(

A) as the generating unit existed on the coming into force of this Act, or (

B) as the generating unit is modified in accordance with regulations made under

section 71(1)(f.2), or (ii) an isolated regulated generating unit listed in

Part 2 of the

Schedule (

A) as the generating unit existed on D ecember 7, 1995, or (

B) as the generating unit is modified in accordance with regulations made under

section 71(1)(f.2), until Parts 4 and 5 cease to apply to the generating unit; (x.1) “retailer” means a person who sells or provides electricity services directly to customers; (xi) by adding the follow ing after clause (cc): (cc.1) “time-of-use meter” means a meter that measures, at intervals of between 15 and 60 minutes, the amount of electricity consumed and that satisfies the standards set under the Electricity and Gas Inspection Act (Canada) and the Weights and Measures Act (Canada) for revenue collection based on time-of-use consumption; (

b) by adding the follow ing after subsection (2):

(3) The definition in subsection (l)(dd) applies to tariffs that have effect in 1996 and 1997, but for the purposes of tariffs that have effect in and after 1998 the definition in subsection (1)(dd) is amended to the extent that subclause (

v) includes all equipment in a substation that is used to transmit electric energy (

a) from the low voltage terminal referred to in subsection (1)(dd), and (

b) to electric distribution system lines that exit the substation and are energized at 25 000 volts or less. 4

4 Explanatory Notes

Section 3 is am ended (

a) in subsection (2) by adding “or any Act that amends this Act" after “this Act”; (

b) by repealing subsection (3) and substituting the follow ing:

(3) An agreement that is existing when this Act or any Act that amends this Act comes into force and that is expressly or by necessary implication inconsistent with this Act or the Act that amends this Act is deemed to be amended to the extent necessary to make the agreement consistent with this Act or the Act that amends this Act. 4

Section 4 is am ended by striking out “of this Act” and substituting “or the implementation of this Act or amendments to this Act or the regulations made under this Act”. 5

Section 6 is am ended (

a) by repealing clause (

a) and substituting the follow ing: (

a) to establish a framework that provides (

i) for the sharing among all consumers of electricity in Alberta of the benefits and responsibilities for costs associated with electricity produced by the generating units listed in the Schedule, and (ii) after D ecember 31, 2000, for the replacing of the statutory payments and entitlements under

Part 4 and the regulation of the tariffs of owners of regulated generating units under

Part 5, by which the benefits and responsibilities referred to in subclause (

i) are shared among all consumers of electricity in Alberta, with the power purchase arrangements and financial instruments described in

Part 4.1, (

b) by striking out “and” at the end of clause (

d) and adding the follow ing after clause (d): (d.1) to establish a framework that enables customers to exercise a preference for electricity services in a competitive market, and 5

Section 3(2) and (3) presently read:

(2) Agreements existing when this Act comes into force and relating to the generation, transmission, distribution, exchange, purchase or sale of electricity are preserved, unless subsection (3) applies.

(3) An agreement that is existing when this Act comes into force and is expressly or by necessary implication inconsistent with this Act is deemed to be amended to the extent necessary to make the agreement consistent with this Act. 4

Section 4 presently reads: 4 No action may be brought against the Crown claiming compensation for any real or perceived loss or damage resulting from the coming into force of this Act. 5

Section 6(

a) presently reads: 6 The purposes of this Act are (

a) to establish a framework that replaces the Electric Energy Marketing Act so that averaging of generation costs is phased out as regulated generating units are removed from regulated service and new arrangements are made so that (

i) the benefits of and responsibilities for costs associated with electricity produced by regulated generating units are shared by all consumers of electricity in Alberta, and (ii) decisions about investing in a regulated generating unit or removing a regulated generating unit or associated property from regulated service are in the interests of all consumers of electricity in Alberta and in the interests of the owner of the regulated generating unit, 5 Explanatory Notes

Section 7 is repealed and the follow ing is substituted: Continuation of Power Pool Council 7(1) The Power Pool Council is continued.

(2) The Power Pool Council is a corporation consisting of the members appointed by the Minister in accordance with subsection (3).

(3) The Minister shall appoint as members of the Power Pool Council individuals who, in the opinion of the Minister, (

a) will enhance the performance of the Power Pool Council in carrying out its duties and functions, and (

b) are independent of persons having a material interest in the Alberta electric industry.

(4) The Chair designated under

section 7.2(1) may provide the Minister with the names of persons recommended for appointment as members of the Power Pool Council, but the Minister is not bound to appoint members from among the names recommended.

(5) The Power Pool Council is not a Provincial corporation for the purposes of the Financial Administration Act, the Auditor General Act or any other Act. 6

Section 7 presently reads: 7(1) There is established a corporation called the “Power Pool Council", consisting of the following members: (

a) Alberta Power Limited; (

b) TransAlta Utilities Corporation; (

c) the City of Calgary; (

d) Edmonton Power Inc.; (

e) the City of Lethbridge; (

f) the City of Red D eer; (

g) the City of Medicine Hat; (

h) the Alberta Federation of REA’s Ltd.; (

i) the Industrial Power Consumers Association of Alberta; (

j) the Independent Power Producers Society of Alberta; (

k) the corporations, municipalities, organizations and individuals appointed under subsection (2).

(2) The Lieutenant Governor in Council shall appoint as members of the Power Pool Council such corporations, municipalities, organizations or individuals as may, in the opinion of the Minister, be necessary or desirable to ensure that the membership of the Power Pool Council is representative of persons having a material interest in the operation of the power pool.

(3) Each corporation, municipality and organization that is a member of the Power Pool Council shall nominate an individual to serve as its representative on the Power Pool Council and may nominate different individuals for that purpose from time to time.

(4) The members of the Power Pool Council shall co-operate with each other in good faith to enable and assist the Power Pool Council to carry out its duties and functions.

(5) No member of the Power Pool Council nor any individual who serves as a representative of a member of the Power Pool Council under subsection (3) is liable for any act or omission of a member, a representative of a member, the Power Pool Council or a person appointed under

section 9(1)(

b) or (

c) done or purportedly done under this or any other enactment. 6 Explanatory Notes

7 The follow ing is added after

section 7: Duty of members of Power Pool Council 7.1 Each member of the Power Pool Council shall, in carrying out any duty or function under this Act or the regulations, (

a) act honestly, in good faith and in the public interest, (

b) avoid conflicts of interest, and (

c) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances. Chair, Secretary and Vice-chair 7.2(1) The Minister shall designate one of the members of the Power Pool Council as the Chair of the Power Pool Council.

(2) The Chair (

a) shall designate one of the members of the Power Pool Council, other than the member designated as the Market Surveillance Administrator under

section 9.1(2), as the Vice-chair of the Power Pool Council, and (

b) shall appoint an individual to act as the Secretary of the Power Pool Council.

(3) The remuneration payable to the Chair, the Vice-chair, the other members of the Power Pool Council and the Secretary must be (

a) set by the Power Pool Council, and (

b) approved by the Minister. Duties of the Secretary 7.3(1) The Secretary is responsible for carrying out the duties imposed on the Secretary by this Act, the regulations, any other Act or the Power Pool Council.

(2) The Secretary may (

a) accept service of all notices and other documents on behalf of the Power Pool Council, (

b) when required, provide to the Board the record of proceedings held before the Power Pool Council, and 7

(6) The Power Pool Council is not a Provincial corporation for the purposes of the Financial Administration Act, the Auditor General Act or any other Act. 7 New sections relating to Power Pool Council. 7 Explanatory Notes

(

c) certify any decision made by the Power Pool Council or any document, record or thing used in connection with a hearing or other proceeding.

(3) A certificate purporting to be signed by the Secretary is, without proof of the office or signature, admissible in evidence, so far as it is relevant, for all purposes in any action, hearing, prosecution or other proceeding. Sitting in panels 7.4(1) The Chair of the Power Pool Council may designate 3 or more members of the Power Pool Council to sit as a panel of the Power Pool Council and may direct the panel to conduct any hearing, review, inquiry or other proceeding that the Power Pool Council itself could conduct under this or any other Act.

(2) A majority of the members of a panel of the Power Pool Council constitutes a quorum at a sitting of the panel.

(3) A decision or other action made or taken at a sitting of a panel of the Power Pool Council at which a quorum is present is the decision or action of the Power Pool Council and binds all members of the Power Pool Council.

(4) A panel of the Power Pool Council has, with respect to its duties, the same jurisdiction as that of the Power Pool Council and may exercise and perform all the powers of the Power Pool Council under this or any other Act with respect to a hearing, review, inquiry or other proceeding that it is directed to conduct and for that purpose any reference in this or any other Act to the Power Pool Council is deemed to be a reference to a panel of the Power Pool Council. 8

Section 8 is am ended by renum bering it as

section 8(1) and by adding the follow ing after subsection (1):

(2) The Power Pool Council may, in respect of matters that are not being dealt with by a panel of the Power Pool Council, (

a) determine the number of its members that constitutes a quorum at meetings of the Power Pool Council, and (

b) establish rules or procedures respecting the number of its members that is required to carry out any act in order for that act to bind all of its members and to constitute

an act of the Power Pool Council. 8

Section 8 presently reads: 8 The Power Pool Council has the power to carry out any duty or function given to it under this or any other enactment. 8 Explanatory Notes

(3) The Power Pool Council may make by-laws governing the management and administration of its affairs.

(4) The Regulations Act does not apply to a by-law made under subsection (3). 9

Section 9 is am ended by adding the follow ing after subsection (4):

(5) D espite subsection (4), the Power Pool Council may recover expenditures for capital assets over a period comparable to the useful life of that asset. 10 The follow ing is added after

section 9: Surveillance of electricity market 9.1(1) The Power Pool Council shall, in accordance with the regulations, carry out surveillance in respect of any activity related to the engaging in, or proposing to engage in, the generation, transmission, distribution, exchange, purchase or sale of electricity, including the surveillance of (

a) electricity exchanges on the tie lines connecting the interconnected electric system in Alberta with electric systems in jurisdictions bordering Alberta, (

b) any aspect of the relationship between the owner of an electric distribution system and its affiliated retailers, (

c) any aspect of the relationship between the owner of an electric distribution system and retailers other than its affiliated retailers, (

d) any aspect of arrangements, information sharing and decisions relating to eligible persons exchanging or wishing to exchange electric energy through the power pool, and (

e) any other activity specified in the regulations to determine whether or not (

f) the results of that activity are efficient and equitable, (

g) the persons carrying out that activity are complying with this Act, the regulations, the rules of the power pool and any arrangements entered into under this Act or the regulations, and 9

Section 9(4) presently reads:

(4) The Power Pool Council shall ensure that the power pool is operated so that no profit or loss results on an annual basis from its operation. 10 Adds sections dealing with market surveillance. 9 Explanatory Notes

(

h) the rules, guidelines and conventions that govern the Alberta electric industry are sufficient to discourage eligible persons from employing anti-competitive practices in that industry.

(2) The Minister shall designate one of the members of the Power Pool Council as the Market Surveillance Administrator.

(3) The Market Surveillance Administrator shall carry out the surveillance duties referred to in subsection (1), but the Power Pool Council is not precluded from carrying out those duties or exercising any other duty or function described in sections 9.2, 9.3 and 9.4. Investigation 9.2(1) The Market Surveillance Administrator shall investigate any matter that may be the subject of surveillance under

section 9.1 (

a) that is brought to the attention of the Market Surveillance Administrator by way of a referral or complaint from any source, or (

b) that the Market Surveillance Administrator decides on his own initiative to investigate.

(2) To carry out his functions under this section, the Market Surveillance Administrator may make use of the services of (

a) the staff of the Power Pool Council, (

b) the person or persons appointed under

section 9(1)(

b) and (c), if they are not staff of the Power Pool Council, and (

c) persons having special technical or other knowledge or skills. Authority of Market Surveillance Administrator 9.3 For the purpose of carrying out his functions under sections 9.1 and 9.2, the Market Surveillance Administrator has the powers set out in the regulations relating to the right to enter any premises or place, to compel the production of information, to copy information and to make reasonable inquiries of any person. Recommenda- tions 9.4 On the completion of each investigation under

section 9.2, the Market Surveillance Administrator shall (

a) make any recommendations to the Power Pool Council that the Market Surveillance Administrator considers appropriate, and 10

10 Explanatory Notes

(

b) prepare a report to the Power Pool Council that sets out (

i) the matter that was investigated, (ii) whether the matter came to the attention of the Market Surveillance Administrator by way of a referral or complaint or whether the Market Surveillance Administrator decided on his own initiative to investigate the matter, (iii) the recommendations and the reasons for the recommendations, and (iv) any other information specified in the regulations. Authority of Power Pool Council 9.5(1) The Power Pool Council may, in accordance with the regulations, do any or all of the following: (

a) accept, modify or reject a recommendation of the Market Surveillance Administrator; (

b) hold a hearing whether or not the Market Surveillance Administrator recommends it; (

c) impose fines or other sanctions set out in the regulations.

(2) The Power Pool Council shall refer a recommendation of the Market Surveillance Administrator or any other matter that is the subject of a report under

section 9.4(b) (

a) to the Transmission Administrator, (

b) to the Board, (

c) to the Competition Bureau under the Competition Act (Canada), or (

d) to any other entity specified in the regulations in accordance with the regulations.

(3) Where a recommendation of the Market Surveillance Administrator or any other matter that is the subject of a report under

section 9.4(

b) is related to a matter dealt with in

section 9, 11 or 12, the Power Pool Council shall refer the recommendation or matter to the Board. 11

11 Explanatory Notes

Interim decision 9.6(1) Where (

a) a recommendation or other matter that is the subject of a report under

section 9.4(

b) has been referred under

section 9.5(2), or (

b) the Power Pool Council decides to hold a hearing relating to a recommendation or other matter that is the subject of a report under

section 9.4(

b) and no decision will be immediately available resulting from the referral or hearing, the Power Pool Council may before the decision is available make an interim decision relating to the recommendation or other matter.

(2) An interim decision may be made under subsection (1) only if in the opinion of the Power Pool Council the failure to make the interim decision could result in (

a) significant harm to the efficiency or equity of exchanges of electric energy through the power pool, or (

b) a compromise to the safe and reliable operation of the interconnected electric system.

(3) The Power Pool Council must give the Minister, the Board and persons directly affected at least 5 days’ notice, excluding Saturdays, Sundays and holidays, of the Power Pool Council’s intention to make an interim decision.

(4) An interim decision remains in force until (

a) the entity referred to in

section 9.5(2), or the Power Pool Council at the conclusion of a hearing, makes a decision or order or takes some other action that has the effect of superseding the interim decision, or (

b) the Minister makes a regulation that has the effect of superseding the interim decision, whichever occurs first. Decisions of Power Pool Council 9.7(1) The Power Pool Council may make any order or decision it considers appropriate relating to a matter in respect of which a hearing has been conducted.

(2) The Market Surveillance Administrator shall not sit as a member of the Power Pool Council or of a panel of the Power Pool Council when a recommendation of the Market 12

12 Explanatory Notes

Surveillance Administrator is being considered under subsection (1). Appeal 9.8 A decision of the Power Pool Council may be appealed to the Board in accordance with the regulations.

Regulatory forbearance 9.9(1) The Power Pool Council or the Market Surveillance Administrator may make a determination to refrain, in whole or in part and conditionally or unconditionally, from the exercise of any power or the performance of any duty or function under this Part, where the Power Pool Council or the Market Surveillance Administrator, as the case may be, finds as a question of fact that a person, product, class of products, service or class of services is or will be subject to competition sufficient to protect the public interest.

(2) The Power Pool Council and the Market Surveillance Administrator shall not make a determination to refrain under subsection (1) in relation to a person, product, class of products, service or class of services if the Power Pool Council and the Market Surveillance Administrator find as a question of fact that to refrain would be likely to impair unduly the establishment or continuation of a competitive market for that person, product, class of products, service or class of services. Duty to report 9.91(1) The Power Pool Council shall prepare and deliver to the Minister an annual report containing a

summary of the activities of the Power Pool Council under sections 9.1 to 9.9 in the year.

(2) The Power Pool Council must (

a) provide a copy of each order or decision under

section 9.6 or 9.7 to the Minister, and (

b) make all of its orders and decisions under

section 9.6 or 9.7 available to the public. 11 The follow ing is added after

section 12: Liability protection 12.1(1) In this section, (a) "power pool act” means any act or omission done or purportedly done by a power pool person in carrying out (

i) duties and functions under this Act, or 13

11 New

section adding a liability protection section. 13 Explanatory Notes

(ii) any other duties and functions relating to the power pool; (b) “power pool person” means (

i) the Power Pool Council, (ii) each member of the Power Pool Council, (iii) each officer and employee of the Power Pool Council, (iv) each person that acts at the direction of, or is an agent or contractor of, the Power Pool Council, (

v) each affiliate of a person referred to in subclause (iv), (vi) each person appointed under

section 9(1)(

b) or (c), (vii) each officer and employee of the persons appointed under

section 9(1)(

b) or (c), (viii) each person that acts at the direction of, or is an agent or contractor of, a person appointed under

section 9(1)(

b) or (c), and (ix) each affiliate of a person referred to in subclause (viii).

(2) No action lies against a power pool person, and a power pool person is not liable, (

a) for a power pool act carried out in good faith by that power pool person, or (

b) for a power pool act by any other power pool person whether carried out in good faith or not.

(3) Where (

a) a legal action has been commenced against a power pool person for a power pool act, and (

b) the power pool person is, as a result of the operation of subsection (2) or otherwise, not liable, the Power Pool Council shall indemnify that power pool person for, and pay to that power pool person, all of that power pool person’s costs of defending the legal action, 14

14 E xplanatory N otes

including all reasonable legal expenses and legal fees on a solicitor and client basis, and the amounts so paid to or on behalf of that power pool person shall be recovered by the Power Pool Council through charges fixed in accordance with

section 11(

c) and payable by eligible persons exchanging electric energy through the power pool.

(4) This

section is repealed on February 26, 2000, unless before that date a regulation is made under

section 71(1)(f.1). 12

Section 16 is am ended by repealing subsection (2) and substituting the follow ing:

(2) The Board shall not deal with a complaint under subsection (1) (

a) if the complainant (

i) has not attempted to negotiate a settlement of the matter under

Part 6, or (ii) has attempted to negotiate a settlement of the matter under

Part 6, but (

A) a bad faith certificate has been issued to the complainant pursuant to

section 66(

f) and has not been withdrawn, and (

B) the Board is of the view that the reasons stated in the bad faith certificate justify the Board’s not hearing the complaint until those reasons have been addressed to the satisfaction of the Board, or (

b) if the complaint relates to a matter dealt with in

section 9, 11 or 12 and the complaint has not been referred to the Board under

section 9.5(3). 13 The follow ing is added after

section 16: Regulations 16.1 The Minister may make regulations (

a) respecting the surveillance duties of the Power Pool Council and the Market Surveillance Administrator under

section 9.1; 15

Section 16(2) presently reads:

(2) The B oard shall not deal with a complaint under subsection (1) (

a) if the complainant has not attempted to negotiate a settlement of the matter under

Part 6, or (

b) if the complainant has attempted to negotiate a settlement of the matter under

Part 6, but (

i) a bad faith certificate has been issued to the complainant pursuant to

section 66(

f) and has not been withdrawn, and (ii) the B oard is of the view that the reasons stated in the bad faith certificate justify the B oard’s not hearing the complaint until those reasons have been addressed to the satisfaction of the B oard. 13 Adds regulation making powers. 15 Explanatory Notes

(

b) respecting investigations that may be conducted by the Market Surveillance Administrator, including the right to enter any premises or place, to compel the production of information, to copy information and to make reasonable inquiries of any person; (

c) specifying other information that must be included in a report under

section 9.4(b); (

d) respecting the kinds of decisions that the Power Pool Council has authority to make under

section 9.5, including the imposition of fines or other sanctions and the making of orders relating to the costs of investigations and hearings; (

e) respecting the holding of a hearing by the Power Pool Council, including provisions relating to the production of information, compelling the attendance of witnesses, providing notice of hearings and the duty to notify appropriate persons of the outcome of hearings; (

f) respecting the referral of a matter by the Power Pool Council to a body referred to in

section 9.5(2) and specifying other entities for the purposes of that subsection; (

g) respecting the appeal of a decision of the Power Pool Council to the Board; (

h) that have the effect of superseding an interim decision under

section 9.6. 14

Section 17 is am ended (

a) by renum bering clause (

a) as clause (a.2) and adding the follow ing before clause (a.2): (a) “management fee” means a fee for carrying out the duties and functions of the Transmission Administrator under this Act that is, in the Board’s opinion, (

i) commensurate with the business risk the Transmission Administrator will assume during the period in which its tariff is in effect, and (ii) reasonable compensation to the Transmission Administrator for its services during that period; 16

Section 17 presently reads: 17 In this Part and in Parts 4 and 5, (a) “rates” means prices, rates, tolls and charges that apply to service provided by an electric utility or the Transmission Administrator; (b) “tariff” means a document that sets out (

i) rates, and (ii) applicable terms and conditions; (c) “terms and conditions" means the standards, classifications, regulations, practices, measures and terms and conditions that apply to service provided by an electric utility or the Transmission Administrator. 16 Explanatory Notes

(a.1) “notice of intention to terminate” means a written notice delivered by either the Minister or the Transmission Administrator to the other that expresses an intention to bring the appointment of the Transmission Administrator to an end; (

b) by adding the follow ing after clause (a.2): (a.3) “recovery tariff’ means a tariff of the Transmission Administrator (

i) that, when approved by the Board, varies or replaces the Transmission Administrator’s tariff then in effect, (ii) that is submitted and approved under

section 49, and (iii) that is prepared for the purpose of enabling the Transmission Administrator to recover the amounts listed in

section 52.2; (a.4) “replacement Transmission Administrator” means any person appointed as the successor to the Transmission Administrator or any other person who assumes the duties and functions given to the Transmission Administrator under this Act; 15

Section 18 is am ended (

a) in subsection (1) (

i) by repealing clauses (

c) and (

d) and substituting the follow ing: (

c) Enmax Power Corporation; (

d) Edmonton Power Inc.; (ii) by adding the follow ing after clause (m ): (m.1) the Environmental Law Centre; (m.2) the Senior Petroleum Producers Association; (

b) in subsection (2) by striking out “Lieutenant Governor in Council” and substituting “Minister”. 17

Section 18(1) and (2) presently read: 18(1) There is established a corporation called the “Electric Transmission Council”, consisting of the following members: (

a) Alberta Power Limited; (

b) TransAlta Utilities Corporation; (

c) the City of Calgary; (

d) Edmonton Power Inc.; (

e) the City of Lethbridge; (

f) the City of Red D eer; (

g) the City of Medicine Hat; (

h) the Alberta Federation of REA’s Ltd.; (

i) the Industrial Power Consumers Association of Alberta; 17 Explanatory Notes

Section 19 is am ended by renum bering it as

section 19(1) and by adding the follow ing after subsection (1):

(2) The Electric Transmission Council may (

a) determine the number of its members that constitutes a quorum at meetings of the Electric Transmission Council, and (

b) determine rules or procedures respecting the number of its members that is required to carry out any act in order for that act to constitute

an act of the Electric Transmission Council. 17

Section 21 is am ended by striking out “Before January 1, 1996, the” and substituting “The”. 18

Section 28 is am ended by adding the follow ing after subsection (3):

(4) The Transmission Administrator may request the Board to approve an information-sharing arrangement that requires the owners of generating units, the owners of electric distribution systems and the owners of transmission facilities to provide information necessary to enable the Transmission Administrator to carry out its duties and functions, including information related to (

a) the characteristics and status of assets, (

b) past, current and expected performance of assets, 18

(

j) the Independent Power Producers Society of Alberta; (

k) the Alberta Association of Municipal D istricts and Counties; (

l) the Alberta Irrigation Projects Association; (

m) Public Institutional Consumers of Alberta; (

n) the corporations, municipalities, organizations and individuals appointed under subsection (2).

(2) The Lieutenant Governor in Council shall appoint as members of the Electric Transmission Council such corporations, municipalities, organizations or individuals as may, in the opinion of the Minister, be necessary or desirable to ensure that the membership of the Electric Transmission Council is representative of persons having a material interest in the Alberta electric industry. 16

Section 19 presently reads: 19 The Electric Transmission Council has the power to carry out any duty or function given to it under this or any other enactment. 17

Section 21 presently reads: 21 B efore January 1, 1996, the Lieutenant Governor in Council shall, after consulting with the Electric Transmission Council, appoint a qualified person or persons to act as the Transmission Administrator. 18

Section 28 presently reads: 28(1) Each owner of a transmission facility shall use reasonable efforts to operate its transmission facility in co-operation and conjunction with the owners of other transmission facilities through the direction of a person appointed under

section 9(1)(c).

(2) Each owner of a transmission facility is responsible for maintaining the integrity of its transmission facility so that it can be used by the Transmission Administrator to provide system access service.

(3) The owners of transmission facilities, other members of the Electric Transmission Council and the Transmission Administrator shall co-operate with each other in good faith to enable and assist 18 Explanatory Notes

(

c) details of operation of assets, including maintenance schedules, and (

d) forecasts of volumes of supply or delivery of electricity at points where an asset connects to the transmission system.

(5) The information-sharing arrangement approved by the Board may require the owners referred to in subsection (4) to provide the Transmission Administrator with access to their meters and their records relating to metering for verification purposes and to permit the Transmission Administrator to copy those records.

(6) The owners referred to in subsection (4) shall provide to the Transmission Administrator the information and access described in the information-sharing arrangement approved by the Board.

(7) The Transmission Administrator shall keep information received by it under subsection (6) confidential if required by the information-sharing arrangement approved by the Board.

(8) In subsection (4), “asset” means (

a) a generating unit, (

b) an electric distribution system, or (

c) a transmission facility. 19 The follow ing is added after

section 31: Termination of appointment of Transmission Administrator 31.1(1) In this section, (a) “assets” means the assets that are needed for the continued proper and efficient operation of the Transmission Administrator function and that the replacement Transmission Administrator requests the former Transmission Administrator to provide to it; (b) "information” means the information that is needed for the continued proper and efficient operation of the Transmission Administrator function, including historical information related to (

i) billing, (ii) system access service, 19

the Electric Transmission Council to carry out its duties and functions. 19 New sections to deal with replacement of Transmission Administrator and protection from liability. 19 Explanatory Notes

(iii) system support services, (iv) transmission line losses, and (

v) transmission system design and operation, but does not include the expertise or experience of the former Transmission Administrator or training by the former Transmission Administrator.

(2) On receiving or delivering a notice of intention to terminate, the Transmission Administrator shall provide a copy of the notice to the Board.

(3) The Transmission Administrator shall (

a) during the period commencing on the date of delivery of a notice of intention to terminate and expiring on the date on which the termination of the appointment of the Transmission Administrator is effective, co-operate with the Minister or any person that may be designated as the replacement Transmission Administrator, or both, in good faith to facilitate the replacement of the Transmission Administrator, and (

b) before the effective date of the appointment of a replacement Transmission Administrator, share with the Minister, if requested by the Minister to do so, or any person that may be designated as the replacement Transmission Administrator, or both, all of the Transmission Administrator’s assets and information.

(4) On the termination of the appointment of the Transmission Administrator taking effect, the former Transmission Administrator shall provide to the replacement Transmission Administrator all of the former Transmission Administrator’s assets and information, including any generating unit or transmission facility built by the former Transmission Administrator.

(5) The sharing of assets and information under subsection (3) and the providing of assets and information under subsection (4) is not a transfer or divestiture of property to which

section 3(1)(

a) applies.

(6) In the event of a dispute between the former Transmission Administrator and the replacement Transmission Administrator as to the assets or information to be shared under subsection (3) or provided under 20

20 Explanatory Notes

subsection (4), the dispute shall be settled by the decision of a person appointed by the Minister for the purposes of settling that dispute.

(7) The former Transmission Administrator and the replacement Transmission Administrator shall negotiate in good faith the value of the assets and information to be shared under subsection (3) or provided under subsection (4) and the terms on which they are to be provided, and in the event of a dispute as to the value or terms, the dispute shall be settled by a decision of the Board.

(8) The former Transmission Administrator may register and maintain a lien, charge, mortgage, security interest or other encumbrance, as applicable, in favour of the former Transmission Administrator in respect of the assets and information provided under subsection (4) until such time as the former Transmission Administrator is fully reimbursed for the assets and information, at which time the encumbrance shall be discharged by the former Transmission Administrator.

Liability protection 31.2(1) In this section, (a) “direct loss or damage” does not include loss of profits, loss of revenue, loss of production, loss of earnings, loss of contract or any other indirect, special or consequential loss or damage whatsoever arising out of or in any way connected with

an act or omission, or purported act or omission, by a transmission person in connection with the carrying out of the duties or functions of the Transmission Administrator; (b) “transmission person” means (

i) the Transmission Administrator or any person named in an Order in Council to become the Transmission Administrator, (ii) a director, officer or employee of a person referred to in subclause (i), (iii) an affiliate of a person referred to in subclause (i), and (iv) a director, officer or employee of a person referred to in subclause (iii).

(2) A transmission person is not liable for any act or omission, or any purported act or omission, in connection 21

21 Explanatory Notes

with the carrying out of the duties or functions of the Transmission Administrator under this Act. (3) Subsection (2) does not apply where the act or omission was caused by the gross negligence or wilful misconduct of a transmission person.

(4) Where, as a result of the operation of subsection (3), a transmission person is liable to a person for

an act or omission, or a purported act or omission, in connection with the carrying out of the duties or functions of the Transmission Administrator under this Act, the transmission person is liable only for direct loss or damage suffered or incurred by that person.

(5) A transmission person is not liable for any act or omission of a predecessor in the office of the Transmission Administrator.

(6) Where (

a) a legal action has been commenced against a transmission person for

an act or omission, or a purported act or omission, by the transmission person in connection with the carrying out of the duties or functions of the Transmission Administrator under this Act, and (

b) the transmission person is, as a result of the operation of subsection (2) or otherwise, not liable for the act or omission, the Board shall allow recovery of the transmission person’s costs of defending the legal action, including all reasonable legal expenses, where prudent, in future tariffs of the Transmission Administrator.

(7) No duties or functions of the Transmission Administrator under this Act and no responsibility or liability in respect of those duties or functions are transferred to any other person by operation of this section.

(8) This

section is repealed on November 20, 1999. 20 The follow ing is added after

section 31.2: 22

20 Adds 2 new Parts dealing with distribution. 22 Explanatory Notes

PA R T 3.1 D ISTR IB U TIO N Application of Parts 3 .1 and 3 .2 31.3 Nothing in this Part or

Part 3.2 applies (

a) to the electric distribution system owned by the City of Medicine Hat or a subsidiary of the City of Medicine Hat, or (

b) to customers whose property is located in the service area of the electric distribution system owned by the City of Medicine Hat or a subsidiary of the City of Medicine Hat. Tariffs required by APL and TAU 31.4(1) In addition to any other requirement under this Act to prepare a tariff, each of Alberta Power Limited and TransAlta Utilities Corporation shall prepare (

a) a distribution tariff, and (

b) a direct access tariff.

(2) A corporation referred to in subsection (1) may authorize (

a) another owner of an electric distribution system, or (

b) an entity described in the regulations to recover on behalf of the corporation the costs of providing distribution access service by means of the electric distribution system owned by the corporation. Distribution tariff 31.5(1) The distribution tariff required under

section 31.4(1) must include (

a) a cost of service study setting out the prudent costs of Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, to provide distribution access service to each customer class, including billing, metering and maintaining information systems, and (

b) any other information required by the regulations.

(2) The cost of service study must differentiate between (

a) the prudent costs to provide distribution access service by means of an electric distribution system 23

23 Explanatory Notes

owned by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, and (

b) the prudent costs to provide distribution access service by means of an electric distribution system owned by a rural electrification association.

(3) The prudent costs referred to in subsection (2)(

b) must not be used to calculate the rate to be charged pursuant to the distribution tariff. Direct access tariff 31.6(1) The direct access tariff required under

section 31.4(1) must set out separate charges for each of the following: (

a) the cost of electric energy exchanged through the power pool; (

b) a fair and reasonable share of the system access service charge paid by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be; (

c) the rate set in the distribution tariff that applies to direct access customers; (

d) a fair and reasonable charge for reservation payments made by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, under

section 37(1); (

e) a fair and reasonable credit for entitlements received by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, under

section 35(1).

(2) The charge referred to in subsection (1)(

a) must be designed to enable a direct access customer to choose to pay either (

a) a variable charge that is determined by the cost of electric energy exchanged through the power pool at the pool price, or (

b) one or more fixed charges that reflect an expected annual cost for electric energy exchanged through the power pool for different hours of the day, where the expected annual cost is calculated using a forecast of pool prices for those hours.

(3) The direct access tariff must include 24

24 Explanatory Notes

(

a) a cost of service study setting out the charges paid by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, to the Transmission Administrator for system access service, (

b) a forecast of the pool price to be paid by Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, to exchange electric energy through the power pool for direct access customers for different hours of the day during the period in which the tariff is to be in effect, and (

c) any other information required by the regulations. Timing of application for approval of tariffs 31.7(1) Each of Alberta Power Limited and TransAlta Utilities Corporation shall apply to the Board not later than July 15, 1998 for approval of the tariffs required under

section 31.4(1).

(2) The application to the Board under subsection (1) must be made at the same time as and in conjunction with the Phase 2 application of Alberta Power Limited or TransAlta Utilities Corporation, as the case may be, for Board approval of tariffs pursuant to the 1996 electric tariff proceeding.

(3) Each tariff required under

section 31.4(1) must take effect not later than April 1, 1999. Direct access customer choice 31.8(1) A direct access customer may choose to be billed pursuant to the direct access tariff referred to in

section 31.4(1)(

b) as soon as it is approved by the Board.

(2) A direct access customer that makes the choice referred to in subsection (1) may choose one or both of the following: (

a) to exchange electric energy through the power pool; (

b) to enter into arrangements with the Transmission Administrator to provide system support services to the Transmission Administrator. Distribution tariff of REAs 31.9(1) A rural electrification association that owns an electric distribution system may authorize (

a) another owner of an electric distribution system, or (

b) an entity described in the regulations 25

25 Explanatory Notes

to recover on behalf of the rural electrification association the costs of providing distribution access service by means of the electric distribution system owned by the rural electrification association.

(2) A distribution tariff setting the rates to be charged by the rural electrification association for providing distribution access service must be prepared (

a) by the rural electrification association, or (

b) by the person authorized to act on behalf of the rural electrification association, if the rural electrification association has made an authorization under subsection (1).

(3) The person preparing the distribution tariff must have regard for the principles established by the Board under

section 31.98(b).

(4) The distribution tariff must include the information required by the regulations.

(5) The person preparing the distribution tariff must apply to the Board not later than May 1, 1999 for approval of the tariff.

(6) A tariff under this

section must take effect not later than February 15, 2000. Distribution tariff of municipalities 31.91(1) In this Part, “municipality” means a municipality or a subsidiary of a municipality that (

a) owns an electric distribution system, and (

b) has one or more affiliated retailers.

(2) A municipality shall elect one of the following methods to determine the rates to be charged by it for providing distribution access service: (

a) negotiating a settlement under

Part 6 with direct access customers whose property is located in the service area of the municipality’s electric distribution system; (

b) preparing a distribution tariff. 26

26 Explanatory Notes

Appointment of adjudicator 31.92(1) Where a municipality elects the method referred to in

section 31.91(2)(a), the Board may appoint a mediator to assist the parties in negotiating the rates.

(2) A person who is a member of the Board or has a material interest in any one or more of the parties negotiating the rates is not eligible to be appointed under subsection (1). Start of process 31.93 The settlement process must begin not later than May 1, 1999. Failure to negotiate settlement 31.94(1) If no settlement is negotiated by October 1, 1999, the municipality shall (

a) prepare a distribution tariff in accordance with

section 31.97, and (

b) apply to the Board not later than November 1, 1999 for approval of the tariff.

(2) A tariff referred to in subsection (1) must take effect not later than February 15, 2000. Negotiated settlement 31.95(1) If a settlement is negotiated by October 1, 1999, (

a) the Board is not required to approve the settlement despite

section 55, and (

b) the municipality may begin to charge the rates that have been negotiated, in accordance with the terms and conditions of the settlement.

(2) A tariff resulting from a settlement referred to in subsection (1) must take effect not later than February 15, 2000. Election of tariff 31.96(1) Where a municipality elects the method referred to in

section 31.91(2)(b), the municipality shall (

a) prepare a distribution tariff in accordance with

section 31.97, and (

b) apply to the Board not later than July 1, 1999 for approval of the tariff.

(2) A tariff referred to in subsection (1) must take effect not later than February 15, 2000. 27

27 Explanatory Notes

Preparation of tariff 31.97(1) Where a municipality is required to prepare a distribution tariff, the municipality may authorize (

a) another owner of an electric distribution system, or (

b) an entity described in the regulations to recover on behalf of the municipality the costs of providing distribution access service by means of the electric distribution system owned by the municipality.

(2) A distribution tariff setting the rates to be charged by the municipality for providing distribution access service must be prepared (

a) by the municipality, or (

b) by the person authorized to act on behalf of the municipality, if the municipality has made an authorization under subsection (1).

(3) The person preparing the distribution tariff must have regard for the principles established by the Board under

section 31.98(b).

(4) The distribution tariff must include the information required by the regulations. Regulations 31.98 The Minister may make regulations (

a) respecting information that is required to accompany or form part of a tariff under this Part; (

b) respecting the requirement for the Board to establish principles providing guidance to persons who prepare tariffs under sections 31.9 and 31.97; (

c) describing entities that the owner of an electric distribution system may authorize to act on its behalf pursuant to

section 31.4, 31.9 or 31.97; (

d) respecting the rights and financial obligations of direct access customers regarding their relationship with the owner of the electric distribution system in whose service area that customer’s property is located; (

e) respecting the rights of owners of electric distribution systems regarding planning and expansion of those systems; 28

28 Explanatory Notes

(

f) respecting the obligation of owners of electric distribution systems to develop and offer non-discriminatory distribution tariffs; (

g) respecting the licensing of direct access customers and the requirement to provide performance security; (

h) respecting the eligibility of customers other than direct access customers to make the choices described in

section 31.8 pursuant to a direct access tariff; (

i) respecting the holding of a hearing by the Board before June 15, 1999, or any later date, relating to the allocation of shares of the balancing pool to customer classes and setting percentage shares for each customer class for the purposes of the allocation for the period beginning on January 1, 2001 and ending at 12 midnight on D ecember 31, 2005; (

j) respecting the circumstances that will apply if the hearing referred to in clause (

i) is not held or is not completed by a specified date; (

k) respecting any other matter the Minister considers necessary or advisable to carry out the intent of this Part; (

l) to deal with any difficulty or impossibility resulting from the enactment of this Part. PA R T 3.2 W IR E SER VIC ES PR O VID ER S, R ETA ILER S A N D O W N ER S O F ELEC TR IC D ISTR IB U TIO N SYSTEM S Definition 31.99 In this Part, “wire services provider” means a person authorized pursuant to

section 31.4, 31.9 or 31.97 to act on behalf of the owner of an electric distribution system. Functions of wire services providers 31.991(1) After D ecember 31, 2000, the following functions must be carried out by wire services providers: (

a) performing metering and maintaining information systems relating to the consumption of electricity by customers; 29

29 Explanatory Notes

(

b) where a retailer authorized to do so under the regulations chooses to perform billing in respect of its customers, providing to the retailer sufficient information about its customers to enable the retailer to perform that function, including metering information about the electricity consumed by its customers; (

c) operating and maintaining electric distribution systems in a safe and reliable manner; (

d) undertaking financial settlement with the Transmission Administrator for system access service; (

e) acting as a retailer to customers who choose to pay a stable rate for electricity for the period beginning on January 1, 2001 and ending at 12 midnight on D ecember 31, 2005 in accordance with the regulations.

(2) Each wire services provider shall, in carrying out the functions set out in subsection (1), keep the records specified in the regulations in the manner specified in the regulations. Functions of retailers 31.992(1) After D ecember 31, 2000, the following functions may be carried out by retailers: (

a) providing electricity services to customers, excluding metering and maintaining information systems until retailers are permitted under the regulations to provide those services; (

b) exchanging electric energy through the power pool on behalf of customers of the retailer; (

c) performing financial settlement with the person appointed under

section 9(1)(

b) for electric energy purchased on behalf of customers of the retailer.

(2) After D ecember 31, 2000, the following functions must be carried out by retailers: (

a) maintaining records and accounts relating to customers of the retailer respecting the provision of electricity services; (

b) making a reasonable effort to collect the charges contained in accounts referred to in clause (

a) before discontinuing electricity services to a customer. 30

30 Explanatory Notes

Functions of owners of electric distribution systems 31.993 After D ecember 31, 2000, the following functions must be carried out by owners of electric distribution systems: (

a) making decisions about building, upgrading and improving wires of electric distribution systems for the purpose of providing safe and reliable delivery of electric energy to customers in the service areas served by the electric distribution systems; (

b) ensuring that wire services providers comply with this Act and the regulations. Payment in lieu of income tax 31.994(1) The following persons shall pay to the Provincial Treasurer an amount calculated in accordance with the regulations: (

a) each municipality that owns (

i) a retailer, or (ii) the holder of a power purchase arrangement or financial instrument under

Part 4.1; (

b) each retailer that is a subsidiary of a municipality; (

c) each holder of a power purchase arrangement or financial instrument under

Part 4.1 that is a subsidiary of a municipality; in respect of income received by the retailer or holder referred to in clause (a), (

b) or (

c) from business carried on by that retailer or holder.

(2) The Lieutenant Governor in Council may make regulations respecting (

a) the calculation of the amount to be paid to the Provincial Treasurer under subsection (1); (

b) the interval at which the amount is to be paid to the Provincial Treasurer.

(3) The amount to be paid under subsection (1) shall not exceed the amount a municipality or a subsidiary of a municipality would be required to pay if the municipality or subsidiary were subject to the payment of tax under the Income Tax Act (Canada), the Alberta Income Tax Act or the Alberta Corporate Tax Act. 31

31 Explanatory Notes

(4) In the event that a municipality or a subsidiary of a municipality is subject to the payment of tax under the Income Tax Act (Canada), the Alberta Income Tax Act or the Alberta Corporate Tax Act, subsection (1) does not apply. (5) Subsection (1) does not apply to the City of Medicine Hat or to a subsidiary of the City of Medicine Hat. Regulations 31.995(1) The Minister may make regulations (

a) respecting the manner in which functions of wire services providers, retailers and owners of electric distribution systems are to be carried out; (

b) clarifying or altering the functions set out in sections 31.991, 31.992 and 31.993; (

c) enabling persons other than wire services providers to perform metering and to maintain information systems after D ecember 31, 2005; (

d) respecting billing and who will be responsible for carrying out that function after D ecember 31, 2000; (

e) establishing a code of conduct governing the relationship between a wire services provider and its affiliated retailers; (

f) establishing a code of conduct governing the flow of information between wire services providers and retailers; (

g) establishing codes and standards governing the conduct of retailers; (

h) respecting the rights and obligations of retailers; (

i) respecting arrangements among independent retailers, affiliated retailers and wire services providers related to performing metering and billing and maintaining information systems; (

j) respecting the licensing of retailers and the requirement to provide performance security; (

k) respecting the holding of a hearing by the Board before March 15, 2000, or any later date, relating to the approval of a stable rate tariff that sets a stable rate for customers for the period beginning on January 1, 2001 and ending at 12 midnight on 32

32 Explanatory Notes

D ecember 31, 2005 and providing for that rate to be negotiated by settlement under

Part 6; (

l) respecting the circumstances that will apply if the hearing referred to in clause (

k) is not held or is not completed by a specified date; (

m) respecting arrangements between wire services providers and customers who elect to pay a stable rate for electricity for the period beginning on January 1, 2001 and ending at 12 midnight on D ecember 31, 2005; (

n) respecting records to be kept by wire services providers; (

o) specifying other services that are included in the definition of electricity services; (

p) respecting any other matter the Minister considers necessary or advisable to carry out the intent of this Part; (

q) to deal with any difficulty or impossibility resulting from the enactment of this Part.

(2) A regulation (

a) referred to in subsection (1)(

c) must be made not later than January 1, 2002, and (

b) referred to in subsection (1)(

d) must be made not later than D ecember 31, 1999. 21

Section 32(4) is am ended by striking out “until the unit is removed from regulated service” and substituting “until D ecember 31, 2000 ”. 22

Section 35 is am ended (

a) by adding the follow ing after subsection (3):

(3.1) The percentage shares set for 1999 apply for 2000 to the regulated generating units listed in

Part 1 of the Schedule. 33

Section 32(4) presently reads:

(4) The unit obligation amounts determined for 1996 apply for each year after 1996 until the unit is removed from regulated service, unless subsection (5) or (6) applies. 22

Section 35 presently reads: 35(1) Each owner of an entitled electric distribution system and the Transmission Administrator are entitled to receive for each hour in a pay period, through financial settlement under

section 11(b), credit for an amount equal to that person's percentage share of the sum of the unit obligation values paid under

section 34 for all regulated generating units.

(2) The Lieutenant Governor in Council may make regulations 33 Explanatory Notes

(

b) in subsection (6) by adding “except to change the name of an owner of an entitled electric distribution system” after “changed”. 23

Section 37 is am ended (

a) by adding the follow ing after subsection (3):

(3.1) The percentage shares set for 1999 apply for 2000 to the regulated generating units listed in

Part 1 of the Schedule. (

b) in subsection (6) by adding “except to change the name of an owner of an entitled electric distribution system” after “changed”. 24

Section 39(5) is repealed. 34

(

a) respecting the setting of the percentage shares for each owner of an entitled electric distribution system and for the Transmission Administrator, and (

b) setting a year for the purposes of subsection (3).

(3) The percentage shares must be set for each hour in 1996 and in each subsequent year to and including the year set in the regulations under subsection (2)(b).

(4) Until D ecember 31, 1997, regulations made under subsection (2)(

a) may be amended after the Minister has consulted with the committee established under

section 39.

(5) Any amendment made pursuant to subsection (4) must be consistent with the requirement set out in

section 38(1).

(6) After D ecember 31, 1997, the percentage shares shall not be changed. 23

Section 37 presently reads: 37(1) Each owner of an entitled electric distribution system and the Transmission Administrator have an obligation to pay, for each pay period, through financial settlement under

section 11(b), an amount equal to that person’s percentage share of the sum of all aggregate reservation prices that are allocated to that pay period.

(2) The Lieutenant Governor in Council may make regulations (

a) respecting the setting of the percentage shares for each owner of an entitled electric distribution system and for the Transmission Administrator, and (

b) setting a year for the purposes of subsection (3), which must not be different from the year set in the regulations under

section 35(2)(b).

(3) The percentage shares must be set for 1996 and for each subsequent year to and including the year set in the regulations under subsection (2)(b).

(4) Until D ecember 31, 1997, regulations made under subsection (2)(

a) may be amended after the Minister has consulted with the committee established under

section 39.

(5) Any amendment made pursuant to subsection (4) must be consistent with the requirement set out in

section 38(1).

(6) After D ecember 31, 1997, the percentage shares shall not be changed. 24

Section 39(5) presently reads:

(5) A consultation 34 Explanatory Notes

Section 40(2) is am ended by striking out “order referred to in subsection (1) was made” and substituting “first order referred to in subsection (1) relating to that service area was made”. 26 The follow ing is added after

section 40: Service areas 40.1(1) For the purposes of this Part, the service areas of the electric distribution systems owned by the municipalities referred to in subsection (5) and by rural electrification associations are considered to be part of the service area of the owner of the entitled electric distribution system with whom arrangements for the supply of electricity existed on May 17, 1995.

(2) Where a municipality referred to in subsection (5) or a rural electrification association no longer wishes the service area of the electric distribution system owned by it to be considered in accordance with subsection (1), the municipality or rural electrification association may give notice in writing to that effect to the owner of the entitled electric distribution system.

(3) If notice is given under subsection (2),

section 40 applies as if an order had been made under the Hydro and Electric Energy Act (

a) reducing the size of the entitled electric distribution system’s service area, and (

b) creating a service area for the electric distribution system owned by the municipality or rural electrification association giving the notice, and the payments and credits required under

section 40 must be made through financial settlement under

section 11(

b) unless

section 40(3) applies.

(4) A notice given under subsection (2) is not effective until after the expiry of contractual arrangements that existed on the date the notice was given for the supply of electricity and made between the municipality or rural electrification 35

(

a) relating to regulations made for the first time under sections 32(1), 35(2), 37(2) and 44 must be completed before August 1, 1995, and (

b) relating to regulations referred to in

section 42 must be completed before January 1, 1996 . 25

Section 40(2) presently reads:

(2) The shares described in subsection (1)(

b) must be equal to the proportion that the load, during the pay period, in that part of the service area that became part of another electric distribution system’s service area or became the service area of a new electric distribution system bears to the overall load, during the same pay period, in that service area as it existed immediately before the order referred to in subsection (1) was made. 26 Service areas. 35 Explanatory Notes

association giving the notice and the owner of the entitled electric distribution system.

(5) Notice may be given under this

section by any of the following municipalities: (

a) the Town of Cardston; (

b) the Town of Fort Macleod; (

c) the Town of Ponoka; (

d) the Municipality of Crowsnest Pass. 27 Sections 41, 42 and 43 are repealed. 36

27 Sections 41, 42 and 43 presently read: 41(1) The owner of a regulated generating unit and the owners of entitled electric distribution systems may agree to remove the generating unit from regulated service.

(2) In the course of negotiating the agreement, the owners of entitled electric distribution systems shall consult with their customers.

(3) The agreement must specify any conditions that apply to the removal of the regulated generating unit from service.

(4) The agreement has no effect unless it is approved by the B oard.

(5) B efore granting approval of the agreement, the B oard shall satisfy itself that the agreement is in the interests of all consumers of electricity in Alberta and in the interests of the owner of the regulated generating unit.

(6) When considering granting approval of the agreement, the B oard may take into account any negotiated settlement under

Part 6 that relates to the agreement. 42(1) The Lieutenant Governor in Council may make regulations (

a) respecting all aspects of the ongoing investment in regulated generating units to maintain their capacity or extend their life, (

b) respecting all aspects of the removal of regulated generating units and associated property from regulated service, and (

c) respecting any other matter identified by the Minister.

(2) Regulations made under subsection (1) shall not be amended. 36 Explanatory Notes

Section 45 is am ended (

a) by adding the follow ing after subsection (2):

(2.1) If (

a) a municipality had an interest in a generating unit on May 1, 1995, and (

b) a subsidiary of the municipality acquires the interest after May 1, 1995, the municipality and the subsidiary are considered to be in compliance with subsection (2) if the generating capacity of the generating unit does not increase significantly beyond its capacity on May 1, 1995. (

b) by adding the follow ing after subsection (3):

(3.1) The Board may determine whether (

a) a proposal by the City of Medicine Hat or a subsidiary of that municipality to hold an interest in a generating unit, or (

b) an interest in a generating unit that is held by the City of Medicine Hat or a subsidiary of that municipality is in accordance with subsection (3). 29 The follow ing is added after

section 45: PA R T 4.1 G EN ER A TIN G U N ITS

Interpretation 45.1(1) In this Part, (a) “base life”, in respect of a generating unit listed in

Part 1 of the Schedule, means the period ending at 12 midnight on the last day of the year in which the generating unit is forecast to be decommissioned, as set out in the Schedule; (b) “effective term”, in respect of a generating unit listed in

Part 1 of the Schedule, means the period beginning on January 1, 2001 and ending at 12 midnight on the earlier of 37

43 After a regulated generating unit is removed from regulated service, whether pursuant to

section 41 or

section 42, this Part and

Part 5 no longer apply in respect of that unit. 28

Section 45(1) to (3) presently read: 45(1) No municipality or subsidiary of a municipality shall hold, directly or indirectly, an interest in a generating unit except in accordance with any or all of the provisions of this section.

(2) If a municipality or a subsidiary of a municipality has an interest in a generating unit on May 1, 1995, that municipality or subsidiary may continue to hold that interest after May 1, 1995 if the generating capacity of the unit does not increase significantly beyond its capacity on that date.

(3) The City of Medicine Hat or a subsidiary of that municipality may hold an interest in a generating unit if the generating capacity of that unit and all other generating units in which that municipality or subsidiary has an interest does not exceed the capacity that is needed to reliably meet the requirements of consumers of electricity in the service area of the electric distribution system owned by that municipality or subsidiary. 29 Adds a new Part dealing with de-regulation of generating units listed in the Schedule. 37 Explanatory Notes

(

i) D ecember 31, 2020, and (ii) the last day of the base life of the generating unit; (c) “financial instrument”, in respect of a generating unit listed in

Part 1 of the Schedule, means a financial arrangement that (

i) compensates the owner of the generating unit for fixed costs and variable costs for a period of time set in the financial arrangement, and (ii) provides for the sharing, over the base life and life extension period, if applicable, of the generating unit, of the costs and benefits associated with the electricity produced by the generating unit among all consumers of electricity in Alberta; (d) “fixed costs”, in respect of a generating unit listed in the Schedule, means (

i) the costs associated with capital related to an investment in the generating unit by the owner of the generating unit, including (

A) depreciation, (

B) interest paid on money borrowed for the purpose of the investment, (

C) any return required to be paid to preferred shareholders of the owner of the generating unit relating to the investment, (

D) a fair return on the equity of shareholders of the owner of the generating unit as it relates to the investment, and (

E) taxes associated with the investment, (ii) the operating and maintenance costs, other than variable costs, relating to the generation of electricity by the generating unit and the costs to start the generating unit running, and (iii) any other costs and expenses, including 38

38 Explanatory Notes

(

A) a fair allocation of any of the owner’s costs that relate to any or all of the owner’s generating units, (

B) costs described in the regulations that are beyond the reasonable control of the owner, such as costs that result from a change in the tax status of a generating unit owned by a municipality or a subsidiary of a municipality, and (

C) charges for system access service; (e) “life extension period”, in respect of a generating unit listed in the Schedule, means the period beginning immediately after the end of the base life of the unit and ending not later than 12 midnight on D ecember 31, 2020; (f) “variable costs”, in respect of a generating unit listed in the Schedule, means the costs that vary with a change in the output of the generating unit, per unit of electric energy.

(2) The provisions of the Public Utilities B oard Act relating to hearings, service of notices or orders, regulations, rules and procedure, enforcement of orders and the rights, powers, privileges and immunities of the Public Utilities Board apply to the Alberta Energy and Utilities Board as if they were provisions of this Part. Appointment of independent assessment team 45.2 The Minister shall appoint a qualified person or persons to act as an independent assessment team. Power of independent assessment team 45.3 The independent assessment team has the power to carry out any duty or function given to it under this Act or the regulations. Duty relating to

Part 1 generating units 45.4(1) Not later than August 31, 1998, the owner of a generating unit listed in

Part 1 of the

Schedule shall provide to the independent assessment team a proposal relating to that generating unit.

(2) A proposal under subsection (1) must include (

a) a proposed power purchase arrangement that would apply to the generating unit over the effective term, (

b) information relating to the fixed costs and variable costs of generating electricity at the expected 39

39 Explanatory Notes

available capacity of the generating unit over the effective term, (

c) information relating to the capability of the generating unit to provide system support services over the effective term, (

d) any additional information that the independent assessment team requests relating to the generating unit over the effective term, and (

e) any other information specified in the regulations.

(3) The information provided under subsection (2) must (

a) indicate how the fixed costs and variable costs, the expected available capacity and the amount of electricity expected to be generated may change over the effective term, (

b) indicate anticipated increases or decreases in price indices, rates of inflation or similar measurements that are used to determine how any of the items referred to in clause (

a) may change over the effective term, (

c) include the estimated cost of any future ongoing investment in the generating unit over the effective term and the impact of that investment on the expected available capacity and the amount of electricity expected to be generated over the effective term, (

d) include the estimated cost of decommissioning the generating unit and the estimated salvage value of the generating unit, and (

e) include any formulas or assumptions used to calculate changes under clause (a), (

b) or (

c) over the effective term.

(4) Where the generating unit is forecast to be decommissioned before January 1, 2021, the owner of the generating unit shall provide as part of the proposal under subsection (1) (

a) a 2nd proposed power purchase arrangement that would apply to the generating unit over its life extension period, and 40

40 Explanatory Notes

(

b) the information required under subsections (2)(

b) to (

e) and (3) relating to the 2nd power purchase arrangement over the life extension period.

(5) The information required under subsection (4) must be provided to the independent assessment team not later than October 30, 1998.

(6) The owner of the generating unit shall also provide, not later than August 31, 1998, information relating to reasonable costs over the effective term for coal rights or any other property that have been approved by the Board for inclusion in the owner’s tariff, where the rights or other property is not attributable to any particular generating unit. Power purchase arrangement 45.5(1) The independent assessment team shall, on receipt of a proposal under

section 45.4 relating to a generating unit, (

a) review the information and make an assessment as to whether the information and the terms and conditions of the proposed power purchase arrangement or arrangements associated with that generating unit are reasonable, (

b) assess the reasonableness of any formula or assumption referred to in

section 45.4(3)(e), (

c) assess the reasonableness of any submission from any interested party relating to the generating unit, and (

d) consult with interested parties respecting the reasonableness of the matters referred to in clauses (a), (

b) and (c).

(2) The independent assessment team shall (

a) for each generating unit, determine a power purchase arrangement that is just and reasonable and that (

i) provides the owner with a reasonable opportunity to recover the fixed costs and variable costs of generating electricity at the expected available capacity of the generating unit over the effective term, (ii) in respect of the fixed costs of the generating unit referred to in

section 45.1(1)(d)(i)(D ) 41

41 Explanatory Notes

(

A) fixes a just, reasonable and appropriate composition of debt and equity for the owner’s investment in the generating unit over the effective term, and (

B) provides for a rate of return on equity, based on long term Government of Canada bond yields that are adjusted annually by the automatic application of a formula that references reasonable assumptions for those bond yields, plus a percentage risk premium that is commensurate with the risk of the owner over the effective term, (iii) provides the owner with a reasonable opportunity to achieve efficiencies through incentives, including cost and output incentives, over the effective term, (iv) establishes operational and financial terms and conditions that address dispatch arrangements, maintenance schedules, system support services capability, performance provisions and penalties, (

v) provides the owner with incentives for any future ongoing investment in the generating unit over the effective term, (vi) includes the terms and conditions under which the generating unit is to be decommissioned, if applicable, and (vii) includes any other terms and conditions that the independent assessment team considers appropriate, (

b) for a generating unit to which

section 45.4(4) applies, determine a 2nd power purchase arrangement that satisfies the requirements of clause (

a) in respect of the life extension period of the generating unit, (

c) determine the reasonable costs for coal rights or any other property referred to in

section 45.4(6) for the period beginning on January 1, 2001 and ending at 12 midnight on D ecember 31, 2020, and (

d) determine a method of establishing the costs of the following associated facilities that may be used by the generating unit in common with other generating 42

42 Explanatory Notes

units that may be constructed at that power plant after January 1, 2001: (

i) fuel and fuel handling equipment; (ii) cooling water facilities; (iii) switch yards; (iv) other items; and of allocating those costs among all of the generating units at that power plant and those that may be constructed at that power plant after January 1, 2001 that use the associated facilities.

(3) The right to exchange the electric energy associated with a power purchase arrangement as an eligible person through the power pool shall be exercised by the person who purchases the power purchase arrangement at an auction under

section 45.93, unless subsection (4) applies.

(4) If the owner of the generating unit satisfies the independent assessment team, pursuant to the guidelines set out in the regulations, that the owner should retain the right referred to in subsection (3), the independent assessment team may determine that the owner retains that right.

(5) If the generating unit produces more electric energy than is anticipated in the power purchase arrangement that applies to it, the owner of the generating unit is entitled to the benefit associated with the exchange through the power pool of the excess electric energy produced, in accordance with the regulations, notwithstanding that the right to exchange the electric energy may be exercised by the purchaser of the power purchase arrangement pursuant to subsection (3).

(6) In respect of each power purchase arrangement determined under this section, the independent assessment team may recommend that specified intervals be auctioned under

section 45.93, and in that event the independent assessment team shall recommend the appropriate intervals to be auctioned. Duty relating to

Part 2 generating units 45.6(1) Not later than August 31, 1998, the owner of one or more generating units listed in

Part 2 of the

Schedule shall provide to the independent assessment team a proposal relating to those generating units.

(2) A proposal under subsection (1) must include 43

43 Explanatory Notes

(

a) a proposed power purchase arrangement that would apply to those generating units for the period beginning on January 1, 2001 and ending at 12 midnight on D ecember 31, 2020, and (

b) the information required under

section 45.4(2) and (3) relating to the generating units. Power purchase arrangement 45.7(1) The independent assessment team shall, on receipt of a proposal under

section 45.6 relating to generating units, (

a) review the information and make an assessment as to whether the information and the terms and conditions of the proposed power purchase arrangement associated with those generating units are reasonable, (

b) assess the reasonableness of any formula or assumption referred to in

section 45.4(3)(e), (

c) assess the reasonableness of any submission from any interested party relating to those generating units, and (

d) consult with interested parties respecting the reasonableness of the matters referred to in clauses (a), (

b) and (c).

(2) The independent assessment team shall determine a power purchase arrangement for all of the generating units referred to in the proposal.

(3) Section 45.5(2)(a), except subclause (iv), applies to the determination of the power purchase arrangement. Negotiated settlement 45.8(1) One or more owners of generating units listed in the

Schedule and interested parties may negotiate a settlement in accordance with

Part 6 in respect of any matter that the independent assessment team has the authority to determine under sections 45.5 and 45.7.

(2) If a negotiated settlement has been reached in respect of a matter before the independent assessment team has made a determination relating to that matter, the independent assessment team shall (

a) discontinue its activities under

section 45.5 or 45.7, or both, relating to that matter, and (

b) include the negotiated settlement as part of its report under

section 45.9. 44

44 Explanatory Notes

Report 45.9(1) The independent assessment team shall (

a) prepare a report setting out (

i) its determinations, supported by economic analysis, relating to the matters set out in sections 45.5 and 45.7 and including a copy of each power purchase arrangement determined by the independent assessment team, and (ii) any negotiated settlement reached under

Part 6, and (

b) provide a copy of the report to the Board, the owners of the generating units listed in the

Schedule and any interested parties with whom the independent assessment team consulted.

(2) The Board shall publish a public notice advising that it has received the report of the independent assessment team and shall make a copy of the report available on request. Powers of Board 45.91(1) The Board shall (

a) approve the power purchase arrangements and other determinations made by the independent assessment team, unless subsection (2) applies, and (

b) approve any negotiated settlement reached under

Part 6.

(2) The Board may vary the power purchase arrangements or other determinations made by the independent assessment team at the request of a person if that person satisfies the Board (

a) that the independent assessment team did not carry out its duties in accordance with this Act and the regulations, or (

b) that the power purchase arrangements or other determinations of the independent assessment team are obviously unreasonable, are not supported adequately by economic analysis or are not in the public interest.

(3) The Board may request the independent assessment team to assist the Board in making variations under subsection (2), and on being requested to assist, the independent assessment team shall do so. 45

45 Explanatory Notes

Effect of arrangements relating to

Part 2 generating units 45.92(1) A power purchase arrangement or negotiated settlement that relates to generating units listed in

Part 2 of the

Schedule has effect in accordance with its terms and conditions.

(2) On January 1, 2001, Parts 4 and 5 cease to apply to the generating units listed in

Part 2 of the Schedule. Public auction 45.93(1) One or more auctions shall be held for the purpose of offering for sale to the public power purchase arrangements (

a) that apply to generating units listed in

Part 1 of the Schedule, and (

b) that have been approved or varied by the Board.

(2) The independent assessment team shall recommend to the Minister rules relating to the holding of an auction under this section, including (

a) the setting of limitations respecting (

i) the number of power purchase arrangements that may be purchased by one purchaser, (ii) the types of power purchase arrangements that may be purchased by one purchaser, and (iii) who is eligible to bid on power purchase arrangements, (

b) the setting of conditions and reserve prices, and (

c) the determination of any other matter relating to an auction.

(3) On receipt of recommendations from the independent assessment team, the Minister may by regulation establish the rules relating to the holding of an auction and to the auctioning of power purchase arrangements in the intervals recommended under

section 45.5(6). Minimum amount of generating capacity 45.94(1) On receipt of a recommendation from the independent assessment team, the Minister shall set the minimum amount of generating capacity in respect of which power purchase arrangements must be sold at the public auction. 46

46 Explanatory Notes

(2) If acceptable bids are not received at the public auction for at least the minimum amount of generating capacity set under subsection (1), (

a) the public auction is cancelled, and (

b) the independent assessment team shall, in accordance with the regulations, convert the power purchase arrangements to financial instruments.

(3) If acceptable bids are received at the public auction for at least the minimum amount of generating capacity set under subsection (1) but in respect of a particular power purchase arrangement no acceptable bid has been received, the terms and conditions of the power purchase arrangement must form the basis of a financial settlement determined in accordance with

section 45.96(2) and the regulations.

(4) In this section, “acceptable bid” means a bid that meets the conditions set out in the rules established under

section 45.93(3). Effect of arrangements relating to

Part 1 generating units 45.95(1) A power purchase arrangement (

a) that is sold at a public auction, (

b) that is not sold at a public auction and is converted to a financial instrument under

section 45.94(2), or (

c) that is not sold at a public auction and forms the basis of a financial settlement under

section 45.94(3) and a negotiated settlement that relates to generating units listed in

Part 1 of the

Schedule have effect in accordance with their terms and conditions.

(2) On January 1, 2001, Parts 4 and 5 cease to apply to the generating units listed in

Part 1 of the Schedule. Balancing pool 45.96(1) The price paid for a power purchase arrangement under

section 45.93 shall be paid, in accordance with the regulations, (

a) into the balancing pool if the amount is more than $0, or (

b) out of the balancing pool if the amount is less than $0.

(2) Where the terms and conditions of a power purchase arrangement are to form the basis of a financial settlement 47

47 Explanatory Notes

under

section 45.94(3), the owner of the generating unit and the person appointed under

section 9(1)(

b) shall, in accordance with the regulations, determine the difference between (

a) the pool price, and (

b) the cost of generating electricity pursuant to the power purchase arrangement, and that difference shall be paid (

c) into the balancing pool if the amount is more than $0, or (

d) out of the balancing pool if the amount is less than $0.

(3) Any amount determined by the independent assessment team under

section 45.5(2)(

d) shall, on the completion of construction of a generating unit constructed after January 1, 2001, be paid into the balancing pool in accordance with the regulations.

(4) Revenues associated with small power production contracts under the Small Power Research and D evelopment Act shall be paid into the balancing pool in accordance with the regulations.

(5) Costs associated with small power production contracts under the Small Power Research and D evelopment Act shall be paid out of the balancing pool in accordance with the regulations.

(6) Any amount determined by the independent assessment team under

section 45.5(2)(

c) or 45.7(2) shall be paid out of the balancing pool in accordance with the regulations.

(7) Any net amount greater than $0 in the balancing pool shall be allocated to consumers of electricity in Alberta and to the Transmission Administrator in accordance with the regulations.

(8) Any net amount less than $0 in the balancing pool shall be provided by consumers of electricity in Alberta and by the Transmission Administrator in accordance with the regulations. 48

48 Explanatory Notes

Regulations 45.97 The Minister may make regulations (

a) providing guidelines to be followed by the independent assessment team relating to (

i) modelling or forecasting the future financial performance of the generating units listed in the

Schedule under various scenarios; (ii) consulting with interested parties in respect of a proposal under

section 45.4 or 45.6, including consulting on the input data and the assumptions used in the modelling, financial and economic assessments and risk factors, as well as the modelling approach; (iii) developing the form and terms and conditions of power purchase arrangements and financial instruments, including provisions that set out the circumstances in which power purchase arrangements or financial instruments may be varied, suspended or terminated; (iv) ensuring that interested parties receive adequate notice with respect to consultation sessions and the opportunity to make submissions to the independent assessment team and to comment on other submissions, and ensuring that interested parties are given access to information provided to the independent assessment team; (

b) respecting further duties and functions of the independent assessment team; (

c) specifying information that may be required under

section 45.4(2)(

e) or 45.6(2)(b); (

d) respecting the treatment of costs and valuations provided under

section 45.4(3)(d); (

e) respecting the holding of a public auction; (

f) respecting the standard of credit-worthiness required to be eligible to bid at a public auction; (

g) respecting the requirement to provide performance security to be eligible to bid at a public auction; (

h) respecting the requirements to be met to be eligible to hold a financial instrument or to hold a power 49

49 Explanatory Notes

purchase arrangement after it has been sold at a public auction; (

i) respecting the calculation of administrative costs of conducting a public auction and the payment of those costs; (

j) respecting the conversion of a power purchase arrangement to a financial instrument when a public auction is cancelled; (

k) respecting conditions that apply to the sale of coal rights and any other property referred to in

section 45.4(6) and to the sale of generating units listed in the Schedule; (

l) setting out guidelines for the purposes of

section 45.5(4); (

m) respecting costs incurred in the generation of electricity by generating units listed in

Part 2 of the

Schedule for the purposes of this Part; (

n) respecting the circumstances in which excess electric energy referred to in

section 45.5(5) must be exchanged through the power pool for the benefit of the owner of the generating unit; (

o) respecting the circumstances in which a 2nd power purchase arrangement determined under

section 45.5(2)(

b) may be varied if the owner of the generating unit decides to make an investment in it to provide a life extension period for the generating unit; (

p) respecting the options available to the owner of a generating unit listed in

Part 1 of the

Schedule at the end of the effective term if the owner decides not to make an investment in it to provide a life extension period for the generating unit; (

q) respecting the provision of system support services to the Transmission Administrator pursuant to a power purchase arrangement; (

r) respecting the establishment and operation by the Power Pool Council of a balancing pool, including the calculation of amounts to be paid into or out of the balancing pool, at what interval those amounts are to be paid into or out of the balancing pool and by whom; 50

50 Explanatory Notes

(

s) respecting the determination of a financial settlement by the owner of a generating unit and the person appointed under

section 9(1)(b); (

t) respecting the treatment under

section 78(1) of the costs relating to the person or persons appointed to act as the independent assessment team; (

u) extending any date or lengthening any period expressly specified in this Part; (

v) correcting an error in the Schedule; (

w) respecting any other matter that the Minister considers necessary or advisable to carry out the intent of this Part; (

x) to deal with any difficulty or impossibility resulting from the enactment of this Part or the transition from Parts 4 and 5 to this Part. Liability protection 45.98 No action may be brought against the independent assessment team or any member of it, and the independent assessment team and each member of it are not liable, for any real or perceived loss or damage resulting from any determination made by the independent assessment team or from the implementation of any determination made by the independent assessment team under this Part.

Not taking of property by the Crown 45.99(1) Any determination or decision made or action taken under this Part or the implementation of any determination or decision made or action taken under this Part does not constitute the taking of property by the Crown.

(2) Any regulation made under this Act that is necessary or advisable to carry out the intent of this Part, or the implementation of any of those regulations, does not constitute the taking of property by the Crown. Date when

Part 4.1 no longer applies 45.991(1) This

Part ceases to apply to a generating unit listed in the

Schedule at 12 midnight on the earlier of (

a) the last day of the base life of the generating unit or the last day of the life extension period, if any, of the generating unit, and (

b) D ecember 31, 2020.

(2) The date in subsection (1)(

b) shall not be changed as a result of a regulation made under

section 45.97(u). 51

51 Explanatory Notes

Section 49 is am ended (

a) by adding the follow ing after subsection (2):

(2.1) On receiving or delivering a notice of intention to terminate, the Transmission Administrator may prepare a recovery tariff and apply to the Board for approval of the tariff. (

b) in subsection (5) by striking out “or” at the end of clause (

a) and by adding the follow ing after clause (b): (

c) the increases or decreases in costs that occur when the operation of

Part 4, or any provision of it, is suspended pursuant to regulations made under

section 44(1), or (

d) other related costs approved by the Board. (

c) by adding the follow ing after subsection (5):

(6) An application under this

section for Board approval of a tariff is required for tariffs prepared under sections 27, 29, 31, 31.5, 31.6, 31.9, 31.97 and this section. 31 The follow ing is added after

section 52: Special considerations relating to Transmission Administrator's tariff 52.1(1) The Board shall not decide that a tariff referred to in

section 49(2) fails to satisfy the requirements of

section 51(1) simply because the tariff provides for the flow through, including by the use of deferral accounts, real time pricing or other mechanisms, of some or all of the Transmission Administrator’s prudent costs and expenses of carrying out the duties and functions given to it under this Act.

(2) A tariff referred to in

section 49(2) must provide the Transmission Administrator with a reasonable opportunity to recover the following in addition to the costs specified in

section 52(1): (

a) prudent costs and expenses incurred by or on behalf of the Transmission Administrator prior to the date of its appointment, for the purpose of preparing to carry out the duties and functions given to it under this Act; (

b) a management fee, in respect of a period commencing prior to the date of the Transmission 52

Section 49 presently reads: 49(1) The owner of an electric utility shall prepare a tariff relating to the electric utility and apply to the B oard for approval of the tariff.

(2) The Transmission Administrator shall prepare a tariff relating to the transmission system and apply to the B oard for approval of the tariff.

(3) A tariff must describe how it may change over the period in which it is intended to have effect.

(4) A tariff may provide for maximum rates.

(5) A tariff may provide for increases or decreases in the rates to correspond to (

a) increases or decreases in fuel costs, taxes or other costs, or (

b) price indices, rates of inflation or similar measurements. 31 New sections relating to tariffs of the Transmission Administrator. 52 Explanatory Notes

Administrator’s appointment but not prior to the date specified for the purposes of subsection (3), for the purpose of preparing to carry out the duties and functions given to the Transmission Administrator under this Act; (

c) a management fee in respect of a period commencing after the date of the Transmission Administrator’s appointment during which the tariff is in effect.

(3) The Transmission Administrator is not entitled to recover through its tariff (

a) any costs and expenses referred to in subsection (2)(a), or (

b) any management fee referred to in subsection (2)(

b) or (

c) relating to a period prior to the date specified by the Minister.

(4) The Minister shall advise the Board in writing of the date specified for the purposes of subsection (3).

(5) In determining whether a management fee is reasonable compensation to the Transmission Administrator, the Board shall consider the extent to which the Transmission Administrator’s tariff provides for (

a) incentives for efficiencies that result in cost savings or other benefits that can be shared in an equitable manner between the Transmission Administrator and its customers, and (

b) incentives for performance by the Transmission Administrator. Recovery tariff 52.2(1) When considering an application under

section 49(2.1), the Board shall have regard for the principle that a recovery tariff approved by it must provide the Transmission Administrator with a reasonable opportunity to recover (

a) a management fee, (

b) all unrecovered capital costs and investments of the Transmission Administrator, with due allowance made for the cost of capital, 53

53 Explanatory Notes

(

c) the costs and expenses incurred by the Transmission Administrator to end its duties and functions under this Act, including (

i) costs and expenses of disengaging from all prudent financial or contractual arrangements entered into by the Transmission Administrator, (ii) prudent demobilization costs and expenses, and (iii) outstanding amounts owed to the Transmission Administrator from any deferral account, (

d) any losses arising during the period commencing on the date of delivery of the notice of intention to terminate and expiring on the date on which the termination of the appointment of the Transmission Administrator is effective, as a result of the tariff in effect during that period being insufficient to cover the costs and expenses of the Transmission Administrator, (

e) any other prudent costs and expenses incurred by the Transmission Administrator for which it has not been reimbursed, and (

f) interest, if any, accrued at a reasonable rate on the amounts described in clauses (

a) to (e), from the date on which the termination of the appointment of the Transmission Administrator is effective to the date those amounts are fully recovered.

(2) If the notice period in a notice of intention to terminate is less than 365 days and does not give the Transmission Administrator sufficient time to submit a recovery tariff to the Board before the notice is effective, the replacement Transmission Administrator shall, at the request of the former Transmission Administrator, submit the recovery tariff to the Board on behalf of and for the benefit of the former Transmission Administrator if the request is made within 90 days after the termination of the appointment of the former Transmission Administrator is effective.

(3) A recovery tariff submitted to the Board by the replacement Transmission Administrator under subsection (2) is deemed to be part of the replacement Transmission Administrator’s tariff.

(4) If after the termination of the appointment of the Transmission Administrator is effective the former Transmission Administrator is entitled to receive additional 54

54 Explanatory Notes

revenue through a recovery tariff, through the operation of

section 57.1 or through any other applicable tariff, that revenue is deemed to be part of the tariff of the replacement Transmission Administrator, and the replacement Transmission Administrator shall pay the additional revenue to the former Transmission Administrator as soon as reasonably possible and (

a) within 12 months after the termination is effective, or (

b) in the event that a recovery tariff has been submitted on behalf of the former Transmission Administrator pursuant to subsection (2), within 3 months after the approval of the recovery tariff by the Board, whichever is later. 32 The follow ing is added after

section 57: Request for review of tariff 57.1(1) On receiving or delivering a notice of intention to terminate, the Transmission Administrator may ask the Board to review the Transmission Administrator’s tariff.

(2) The receipt or delivery of a notice of intention to terminate is a circumstance, in addition to those circumstances set out in

section 57(2), that entitles the Board to review the Transmission Administrator’s tariff if requested to do so under subsection (1).

(3) On completing its review, the Board may approve, vary or rescind the tariff or direct the Transmission Administrator to prepare a recovery tariff. 33 The heading preceding

section 71 is repealed and the follow ing is substituted: PA R T 7 R EG U LA TIO N S, M IN ISTER IA L O R D ER S, B O A R D R U LES A N D O FFEN C ES 34

Section 71(1) is am ended (

a) by repealing clause (a); (

b) by adding the follow ing after clause (f): 55

32 Review of tariff. 33 Existing heading presently reads:

PART 7 REGULATIONS, B OARD RULES AND OFFENCES 34

Section 71(1)(

a) presently reads: 71(1) The Lieutenant Governor in Council may make regulations (

a) amending the list of corporations and other entities set out in sections 7(1) and 18(1) if there is a substantial 55 Explanatory Notes

(f.1) continuing, with or without modification, the protection from liability provided to a power pool person under

section 12.1; (f.2) respecting all aspects of the ongoing investment in regulated generating units to maintain their capacity or extend their life; (f.3) respecting the treatment after D ecember 31, 2000 of the rights and obligations of rural electrification associations under contracts that are in existence at the time this clause comes into force and that are made with owners of electric utilities, where the rights and obligations are necessary or advisable to carry out the intent of this Act; 35

Section 72 is am ended (

a) in subsection (1) (

i) by adding the follow ing after clause (a): (a.1) clarifying any power, duty or function conferred or imposed on any person or class of persons under this Act; (a.2) clarifying the liability of any person or class of persons relating to any power, duty or function conferred or imposed under this Act; (ii) by adding the follow ing after clause (d): (

e) suspending the operation of any provision of this Act if, in the Minister’s opinion, suspension is necessary or advisable to carry out the intent of this Act. (

b) in subsection (4) by striking out “1997” and substituting “2000”. 56

change in the nature and extent of the interest in the Alberta electric industry of any of those corporations or other entities; 35

Section 72 presently reads: 72(1) The Lieutenant Governor in Council may make regulations (

a) conferring or imposing on any person or class of persons engaged in the generation, pooling, transmission, distribution, exchange, purchase or sale of electricity any power, duty or function necessary to carry out the purposes of this Act; (

b) allocating, determining, fixing or prescribing anything required by this Act to be allocated, determined, fixed or prescribed, including the manner of allocation, determination, fixing or prescription, if not specified in this Act; (

c) respecting any matters, in addition to those specified in this Act, to be considered by the B oard in making an order under this Act; (

d) respecting any matter that the Minister considers is not provided for or is insufficiently provided for in this Act.

(2) A regulation made under this

section is repealed on the earliest of (

a) the coming into force of an amendment to this Act that adds the matter to this Act, (

b) the coming into force of a regulation that repeals the regulation made under subsection (1), and (c) 2 years after the regulation comes into force. 56 Explanatory Notes

36 The follow ing is added after

section 72: Ministerial orders 72.1 The Minister may, by order, (

a) amend the list of corporations and other entities set out in

section 18(1), and (

b) amend the list of corporations set out in

section 1(1)(

i) if there is a substantial change in the nature and extent of the interest in the Alberta electric industry of any of those corporations or other entities. 37

Section 73 is am ended (

a) in subsection (4)(

b) by adding “and consumed by” after “produced from”; (

b) by adding the follow ing after subsection (4):

(4.1) A rule made under subsection (4)(

b) may (

a) provide an exemption from the operation of all or any provision of this Act, (

b) apply to electric energy produced from and consumed by the whole or any part of an industrial system, and (

c) impose terms and conditions.

(4.2) Where the Board has designated the whole or any part of an electric system as an industrial system pursuant to

section 2.2(5) of the Hydro and Electric Energy Act and is considering making a rule under subsection (4)(

b) in relation to that industrial system, the Board may impose the following conditions: (

a) that the owner of the industrial system be responsible for paying a just and reasonable share of (

i) the reservation payments under

Part 4, 57

(3) The repeal of a regulation under subsection (2)(

b) or (

c) does not affect anything done, incurred or acquired under the authority of the regulation.

(4) No regulation shall be made under subsection (1) after D ecember 31, 1997. (Note: Pursuant to

section 1(1) of AR 234/97, AR 252/97 extends the date specified in

section 72(4) to August 31, 1998.) 36 Adds new powers of the Minister. 37

Section 73(4) presently reads:

(4) The B oard may make rules (

a) exempting any facility or class of facilities, other than regulated generating units listed in the Schedule, from the definition in

section 1(1)(f), and (

b) exempting from the operation of this Act the electric energy produced from an industrial system. 57 Explanatory Notes

(ii) the amounts that will be payable under

Part 4.1 in place of reservation payments after D ecember 31, 2000, and (iii) the transmission costs associated with the interconnected electric system, and (

b) that the owner of the industrial system be entitled to receive (

i) the benefit of a just and reasonable share of the entitlements under

Part 4, and (ii) the amounts that will be paid out of the balancing pool under

Part 4.1 in place of the entitlements after D ecember 31, 2000. 38

Section 78 is am ended (

a) by repealing subsection (1) and substituting the follow ing: Approved professional costs 78(1) The Minister may approve the professional and other costs relating to the development and implementation of this Act, amendments to this Act and the regulations, including the costs relating to the independent assessment team under

Part 4.1. (

b) by repealing subsection (2) and substituting the follow ing:

(2) In determining the aggregate reservation price to apply for 1998, 1999 and 2000, the Board shall include the costs approved under subsection (1) in respect of those years. 39 The

Schedule is repealed and the follow ing is substituted: SC H ED U LE PA R T 1: R EG U LA TED G EN ER A TIN G U N ITS Generating Unit Owner Type of Plant Base Life Barrier #1 TAU hydro 2010 Battle River #1 APL coal-fired thermal 1999Battle River #2 APL coal-fired thermal 1999 58

Section 78 presently reads: 78(1) The Minister may approve on a one-time basis the professional and other costs relating to the development and implementation of this Act.

(2) In determining the aggregate reservation price under

section 76(b), the B oard shall include the costs approved under subsection (1). 39 Amendments to the Schedule. 58 Explanatory Notes

Battle River #3 APL coal-fired thermal 2009 Battle River #4 APL coal-fired thermal 2009 Battle River #5 APL coal-fired thermal 2021 Bearspaw #l TAU hydro 2019 Bighorn #1 TAU hydro 2032 Bighorn #2 TAU hydro 2032 Brazeau #1 TAU hydro 2025 Brazeau #2 TAU hydro 2025 Cascade #1 TAU hydro 2012 Cascade #2 TAU hydro 2012 Clover Bar #1 EP gas-fired thermal 2010 Clover Bar #2 EP gas-fired thermal 2010 Clover Bar #3 EP gas-fired thermal 2010 Clover Bar #4 EP gas-fired thermal 2010 Genesee #1 EP coal-fired thermal 2029 Genesee #2 EP coal-fired thermal 2029 Ghost #1 TAU hydro 2019 Ghost #2 TAU hydro 2019 Ghost #3 TAU hydro 2019 Ghost #4 TAU hydro 2019 Horseshoe #1 TAU hydro 2011 Horseshoe #2 TAU hydro 2011 Horseshoe #3 TAU hydro 2011 Horseshoe #4 TAU hydro 2011 H.R.

Milner APL coal-fired thermal 2012 Interlakes #1 TAU hydro 2010 Kananaskis #1 TAU hydro 2013 Kananaskis #2 TAU hydro 2013 Kananaskis #3 TAU hydro 2013 Keephills #l TAU coal-fired thermal 2023 Keephills #2 TAU coal-fired thermal 2023 Pocaterra #l TAU hydro 2010 Rainbow #1 APL gas turbine 2000 Rainbow #2 APL gas turbine 2000 Rainbow #3 APL gas turbine 2000 Rossdale #8 EP gas-fired thermal 2000 Rossdale #9 EP gas-fired thermal 2000 Rossdale #10 EP gas-fired thermal 2000 Rundle #l TAU hydro 2011 Rundle #2 TAU hydro 2011 Sheerness #l APL/TAU coal-fired thermal 2026 Sheerness #2 APL/TAU coal-fired thermal 2026 Spray #1 TAU hydro 2011 Spray #2 TAU hydro 2011 Sturgeon #1 APL gas turbine 1998 Sturgeon #2 APL gas turbine 1998 Sundance #1 TAU coal-fired thermal 2010 Sundance #2 TAU coal-fired thermal 2010 Sundance #3 TAU coal-fired thermal 2016 Sundance #4 TAU coal-fired thermal 2016 Sundance #5 TAU coal-fired thermal 2018 Sundance #6 TAU coal-fired thermal 2018 Three Sisters #1 TAU hydro 2011 59

59 Explanatory Notes

Wabamun #1 TAU coal-fired thermal 2003 Wabamun #2 TAU coal-fired thermal 2003 Wabamun #3 TAU coal-fired thermal 2003 Wabamun #4 TAU coal-fired thermal 2003 PA R T 2 ISO LA TED R EG U LA TED G EN ER A TIN G U N ITS Generating Owner Type Rating Unit (kW) CUL 5 APL Thermal 100 CUL 43 APL Thermal 3000 CUL 47 APL Thermal 3000 CUL 65 APL Hydro 500 CUL 66 APL Hydro 900 CUL 144 APL Thermal 10 CUL 145 APL Thermal 10 CUL 146 APL Thermal 10 CUL 147 APL Thermal 10 CUL 148 APL Thermal 10 CUL 153 APL Thermal 10 CUL 154 APL Thermal 10 CUL 155 APL Thermal 20 CUL 183 APL Thermal 1000 CUL 185 APL Thermal 150 CUL 187 APL Thermal 750 CUL 189 APL Thermal 3000 CUL 190 APL Thermal 3000 CUL 191 APL Thermal 1000 CUL 194 APL Thermal 200 CUL 195 APL Thermal 800 CUL 198 APL Thermal 2100 CUL 201 APL Thermal 50 CUL 203 APL Thermal 50 CUL 204 APL Thermal 50 CUL 205 APL Thermal 50 CUL 206 APL Thermal 50 CUL 208 APL Thermal 50 CUL 213 APL Thermal 250 CUL 214 APL Thermal 30 CUL 215 APL Thermal 30 CUL 216 APL Thermal 30 CUL 217 APL Thermal 30 CUL 218 APL Thermal 30 CUL 220 APL Thermal 20 CUL 221 APL Thermal 20 CUL 222 APL Thermal 20 CUL 226 APL Thermal 150 60

60 Explanatory Notes

CUL 228 APL Thermal 150 CUL 231 APL Thermal 80 CUL 232 APL Thermal 15 CUL 238 APL Thermal 150 CUL 239 APL Thermal 150 CUL 241 APL Thermal 1085 CUL 242 APL Thermal 40 CUL 245 APL Thermal 100 CUL 246 APL Thermal 100 CUL 248 APL Thermal 100 CUL 250 APL Thermal 200 CUL 251 APL Thermal 200 CUL 252 APL Thermal 125 CUL 253 APL Thermal 125 CUL 254 APL Thermal 400 CUL 255 APL Thermal 400 CUL 256 APL Thermal 400 CUL 263 APL Thermal 100 CUL 264 APL Thermal 60 CUL 266 APL Thermal 1085 CUL 268 APL Thermal 200 CUL 269 APL Thermal 80 CUL 272 APL Thermal 1000 CUL 273 APL Thermal 40 CUL 274 APL Thermal 40 CUL 280 APL Thermal 60 CUL 281 APL Thermal 500 CUL 282 APL Thermal 325 CUL 286 APL Thermal 165 CUL 287 APL Thermal 165 CUL 291 APL Thermal 20 CUL 294 APL Thermal 1000 CUL 295 APL Thermal 1000 CUL 296 APL Thermal 160 CUL 298 APL Thermal 165 CUL 300 APL Thermal 165 CUL 301 APL Thermal 160 CUL 302 APL Thermal 250 CUL 306 APL Thermal 150 CUL 307 APL Thermal 150 CUL 308 APL Thermal 150 CUL 309 APL Thermal 150 CUL 314 APL Thermal 300 CUL 315 APL Thermal 500 CUL 318 APL Thermal 300 CUL 319 APL Thermal 300 CUL 320 APL Thermal 300 CUL 321 APL Thermal 300 CUL 323 APL Thermal 500 CUL 325 APL Thermal 1000 CUL 326 APL Thermal 1000 61

61 Explanatory Notes

CUL 327 APL Thermal 200 CUL 328 APL Thermal 200 CUL 329 APL Thermal 200 CUL 330 APL Thermal 500 CUL 331 APL Thermal 1000 CUL 332 APL Thermal 150 CUL 333 APL Thermal 150 CUL 334 APL Thermal 500 CUL 335 APL Thermal 500 CUL 336 APL Thermal 500 CUL 337 APL Thermal 500 CUL 338 APL Thermal 500 CUL 339 APL Thermal 500 CUL 340 APL Thermal 500 CUL 342 APL Thermal 300 CUL 351 APL Thermal 125 CUL 358 APL Thermal 500 CUL 359 APL Thermal 500 CUL 360 APL Thermal 1400 CUL 361 APL Thermal 500 CUL 362 APL Thermal 40 CUL 363 APL Thermal 30 CUL 365 APL Thermal 750 CUL 366 APL Thermal 500 CUL 368 APL Thermal 2880 CUL 369 APL Thermal 75 CUL 373 APL Thermal 175 CUL 374 APL Thermal 300 CUL 380 APL Thermal 300 CUL 381 APL Thermal 500 CUL 382 APL Thermal 250 CUL 383 APL Thermal 250 CUL 386 APL Thermal 30 CUL 387 APL Thermal 425 CUL 388 APL Thermal 450 CUL 389 APL Thermal 71 CUL 390 APL Thermal 71 CUL 391 APL Thermal 1000 CUL 392 APL Thermal 1000 CUL 393 APL Thermal 1000 CUL 394 APL Thermal 425 CUL 395 APL Thermal 500 CUL 396 APL Thermal 300 CUL 398 APL Thermal 325 CUL 399 APL Thermal 350 40 The follow ing regulations are repealed: 62

40 Repeal of regulations passed under the Act. 62 Explanatory Notes

(

a) the Change in List of Corporations and Entities Regulation (A R 232/97); (

b) the Time Extension Regulation (A R 234/97); (

c) the Deficiency Correction Regulation, 1997 (A R 235/97); (

d) the Transmission Administrator Deficiency Correction Regulation (A R 236/97); (

e) the Time Extension Order (AR 252/97); (

f) the Power Pool Council Deficiency Correction Regulation (A R 40/98). 41(1) When considering whether to approve the Transmission Administrator’s tariff that is intended to be effective for the first 24 months of ESBI Alberta Ltd.’s appointment as the Transmission Administrator, the Board shall, if requested by ESBI Alberta Ltd., have regard to the principle that a tariff approved by it must provide ESBI Alberta Ltd. with a reasonable opportunity to recover, on a flow through basis, including by the use of deferral accounts, real time pricing or other mechanisms, all prudent costs and expenses incurred by the Transmission Administrator in connection with the carrying out of its duties and functions under the Electric Utilities Act during that 24-month period, if the tariff otherwise provides for (

a) incentives for efficiencies that result in cost savings or other benefits that can be shared in an equitable manner between ESBI Alberta Ltd. and its customers, or (

b) transitional milestones that will aid in the development of the incentives referred to in clause (

a) in the future.

(2) D espite

section 52.1(4) of the Electric Utilities Act, the date for the purposes of

section 52.1(3) of the Electric Utilities Act is July 21, 1997 in respect of ESBI Alberta Ltd.

(3) Where ESBI Alberta Ltd. has been named in an Order in Council to become the Transmission Administrator, a reference to “Transmission Administrator” or “former Transmission Administrat

Document details

Collection	Alberta — Bills
Citation	L24 S2 980
Type	bill
Volume / chapter	L24 S2 980
Language	en
Format	json
Source	PROVINCIAL
Identifier	5aedc24e6d5d0d4ab59d2a91e4eb933c6d1d8ba4

Source file is stored in the law ingest library (json).