© Published by Alberta King’s Printer Alberta King’s Printer Suite 700, Park Plaza 10611 - 98 Avenue Edmonton, AB T5K 2P7 Phone: 780-427-4952 E-mail: kings-printer@gov.ab.ca Shop on-line at kings-printer.alberta.ca Province of Alberta Office Consolidation Alberta Regulation 86/2007 With amendments up to and including Alberta Regulation 59/2026 Current as of March 25, 2026 ELECTRIC UTILITIES ACT TRANSMISSION REGULATION

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Note All persons making use of this consolidation are reminded that it has no legislative sanction, that amendments have been embodied for convenience of reference only. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law.

1 (Consolidated up to 59/2026) ALBERTA REGULATION 86/2007 Electric Utilities Act TRANSMISSION REGULATION Table of Contents 1

Interpretation

Part 1 ISO’s Consultation Obligations and Additional Duties 2 Consultation with electricity market participants generally 2.1 Consultation with electricity market participants on transmission system plan 3 Consultation with electricity market participants on particular matters 4 Consultation with electricity market participants on dispute resolution processes 4.1 Consultation with electricity ma rket participants on critical transmission infrastructure milestones 5 Standards and standards committees 6 ISO business practices and performance targets 7 Rules for standards, pract ices, policy, procedures, criteria and processes

Part 2 Transmission System Planning 8 Transmission planning - forecasting need 10 Transmission system plan 11 Needs identification document 11.1 Needs identification document not required 11.2 Abbreviated needs approval process 11.3 Consultation with electricity market participants on particular matters 13 Delegation of responsibility 14 Assistance to the ISO

AR 86/2007 TRANSMISSION REGULATION 2

Part 3 Transmission System Criteria and Reliability Standards 15 Matters taken into account 15.1 Requirement for siti ng transmission lines 16 Restoration and operation of Alberta-British Columbia Intertie 16.1 Expansion of Alberta-Saskatchewan Intertie 16.2 Operation of Alberta-Montana Tie Line 16.3 Ancillary services exemption — intertie projects 18 Generating unit emergency operating requirements 19 Reliability standards 20 Recognition of Electric Reliability Organization 21 Reliability standards adoption , publication and modification 22 Alberta autonomy 23 Compliance with moni toring and reporting 23.1 Forbearance

Part 4 Transmission Facility Projects 24 General rules for constructing transmission facilities 24.1 Transitional - critical transmission infrastructure 24.2 Competitive process to develop certain transmission facilities 24.3 Resulting arrangements – changes or disputes 24.31 Proposal for construction and temporary operation of a transmission facility 24.32 Eligibility for merchant intertie projects 24.4 DFO’s approval of request for direct system access service 25 Transmission facility project cost reporting 25.01 Approval of cost estimate 25.2 ISO direction to TFO or other person 26 Competitive tenders 27 Development of intertie projects

Part 5 Local Interconnection Costs and Transmission Contribution Costs 28 Local interconnection costs 29 Generating unit owner’s contribution 29.01 Generating unit owner’s contribution refund 29.1 Transmission reinforcement payment

Section 1 AR 86/2007 TRANSMISSION REGULATION 3 29.2 Transition from generating unit owner’s contribution to transmission reinforcement payment 30 Non-application of sections 28 and 29

Part 6 Transmission System Losses, Charges and Credits 31 Transmission system loss factors 32 Loss factors to be publicly available 33 Adjustment of loss factors 34 Recovery of transmission losses 36 Determination of trans mission loss factors

Part 7 Commission Responsibilities 37 Application to Commission fo r preparatory operations 38 Applications to the Commission under

section 34(1) of Act 38.1 Applications to the Commission i n respect of critical transmission infrastructure 39 Recovery of pre-construction costs 40 Recovery of assistance costs 41 Recovery of other secondary costs 42 Additional criteria for the Commission for TFO tariffs 43 Decisions under s34(3) of Act 44 Commission rules abou t transmission facilities 46 Prudence of activities and costs 47 ISO tariff — transmission system considerations 48 ISO tariff - approval of ISO’s costs 48.1 Recovery of ancillary services costs

Part 8 Time Period Extension, Paramountcy, Recovery of Must-run Costs, Transition, Repeal and Expiry 49 Extension and effe ct of time periods 50 Paramountcy 52 Transition 53 Repeal of AR 174/2004 54 E x p i r y

Interpretation 1(1) In this Regulation,

Section 1 AR 86/2007 TRANSMISSION REGULATION 4 (a) “abnormal operating conditions” includes conditions where transmission facilities are out of service, emergency conditions exist, construction or commissioning of transmission facilities occurs or transmission facility maintenance cannot be coordinated with generating unit or energy storage resource outages; (b) “Act” means the Electric Utilities Act; (b.1) “Alberta-British Columbia Intertie” means the intertie located between Alberta and British Columbia as described in Table 1 of the Schedule; (b.2) “Alberta-Saskatchewan I ntertie” means the intertie located between Alberta and Saskatchewan as described in Table 2 of the Schedule; (c) “DFO” means the owner o f an electric distribution system; (c.1) “geographic separation” m eans the physical separation of transmission lines to the extent necessary to ensure the reliability of the transmission system; (d) “intertie” means a transm ission facility, including its associated components, that links one or more electric systems outside Alberta to one or more points on the interconnected electric system; (d.1) “intertie project” mean s a transmission facility project to construct a new intertie or to upgrade or enhance the capability of an existing intertie; (e) “ISO” means the Independent System Operator as defined in the Act; (f) “ISO members” means the members of the ISO appointed under

section 8 of the Act; (g) “ISO’s own administrative costs” means (

i) the transmission-related costs and expenses of the ISO respecting the administration, operation and management of the ISO, (ii) the transmission-related costs and expenses of the ISO respecting reliability standards and reliability management systems, and (iii) the transmission-related costs and expenses required to be paid, or otherwise appropriately paid, by the ISO, except for the following:

Section 1 AR 86/2007 TRANSMISSION REGULATION 5 (

A) costs for the provision of ancillary services; (

B) costs of transmission line losses; (

C) amounts payable under TFO transmission tariffs; (g.1) “merchant intertie” means an intertie whose development and operating costs are paid by (

i) the owner of the intertie, and (ii) any other person who directly benefits from the intertie, as permitted by the ISO tariff; (g.2) “merchant intertie project ” means an intertie project to construct a new merchant intertie or to upgrade or enhance the capability of an existing merchant intertie; (g.3) “Montana-Alberta Ti e Line” or “MATL” means the merchant intertie located between Alberta and Montana as described in Table 3 of the Schedule; (

h) repealed AR 153/2010 s2; (i) “path rating” means the ra ting to transfer electric energy assigned to a transmission facility when it was placed in service and rated in accordance with reliability standards in effect at that time; (i.1) “regulated intertie” mean s an intertie whose costs are recovered through a TFO tariff approved by the Commission; (i.2) “regulated intertie project” means an intertie project t o construct a new regulated intertie or to upgrade or enhance the capability of an existing regulated intertie; (j) “reliability standards” means the reliability standards th at apply in Alberta under

section 19; (j.1) “renewable or low emission generation” means a generating unit that produces electric energy that is renewable or alternative energy as defined in

section 1(1)(

l) of the Micro-Generation Regulation (AR 27/2008); (k) “TFO” means the owner of a transmission facility; (l) “transmission system pl an” means the transmission system plan under

section

Section 1 AR 86/2007 TRANSMISSION REGULATION 6

(2) In this Regulation, the following words and phrases have the meaning given to them by the Act: (

a) ancillary services; (a.1) repealed AR 136/2019 s2; (

b) Commission; (b.1) critical transmission infrastructure; (

c) c u s t o m e r ; (

d) dispatch; (

e) electric distribution system; (

f) electric energy; (

g) electricity; (g.1) electricity market; (g.2) energy storage resource; (

h) generating unit; (

i) industrial system; (

j) interconnected electric system; (

k) I S O t a r i f f ; (

l) and (

m) repealed AR 136/2019 s2; (m.1) Market Surveill ance Administrator; (m.2) Minister; (

n) o w n e r ; (

o) p e r s o n ; (

p) rates; (

q) system access service; (

r) tariff; (

s) terms and conditions; (

t) transmission facility;

Section 2 AR 86/2007 TRANSMISSION REGULATION 7 (

u) transmission system.

(3) Repealed AR 136/2019 s2. AR 86/2007 s1;255/2007;153/2010;114/2018;242/2018; 136/2019;34/2024;168/2025

Part 1 ISO’s Consultation Obligations and Additional Duties Consultation with electricity market participants generally 2(1) Subject to subsection (2), if the ISO decides to engage in consultation with electricity market participants, the ISO may do any of the following: (

a) give notice of the matters t o be the subject of consultation; (

b) give notice of the purpose of the consultation; (

c) give notice of the nature of the consultation process, including (

i) the manner of obtaining the views of electricity market participants, (ii) the manner in which elect ricity market participants will become aware or be made aware of the views expressed by other electricity market participants, and (iii) describing what opportunity electricity market participants will have to respond to the views expressed by other electricity market participants; (

d) explain the manner in which the ISO will demonstrate that it has considered the views of electricity market participants; (

e) prepare a document explaining the outcome of the consultation.

(2) When this Regulation requires the ISO to consult with electricity market participants, the ISO may have regard for subsection (1) but may consult with those electricity market participants the ISO is required to consult with in any manner that the ISO considers appropriate. AR 86/2007 s2;136/2019

Section 2.1 AR 86/2007 TRANSMISSION REGULATION 8 Consultation with electricity market participants on transmission system plan 2.1 The ISO must, in preparing or updating the transmission system plan under

section 10, consult with those electricity market participants that the ISO considers are likely to be directly affected by the transmission system plan. AR 153/2010 s3;136/2019 Consultation with electricity market participants on particular matters 3(1) The ISO must consult with those electricity market participants that the ISO considers are likely to be directly affected by (

a) repealed AR 175/2014 s2. (

b) the approval by ISO members of the ISO’s own administrative costs, costs for provision of ancillary services or the costs of transmission line losses.

(2) The ISO must, not later than one year after this Regulation comes into force, make rules or establish practices respecting the approval referred to in subsection (1)(b). AR 86/2007 s3;175/2014;136/2019 Consultation with electricity market participants on dispute resolution processes 4(1) The ISO must consult with those electricity market participants that the ISO considers (

a) are likely to be directly affected by dispute resolution practices and procedures of the ISO, including the resolution of disputes arising under or in respect of ISO rules and standards, and (

b) are persons who have a direct interest in the appointment of persons or entities to assist in the resolution of or to resolve disputes.

(2) Nothing in this

section or in the ISO rules affects the right of a person to make a complaint to the Commission under

section 25 of the Act.

(3) The ISO must, not later than one year after this Regulation comes into force, (

a) complete the consultation required by subsection (1), and

Section 4.1 AR 86/2007 TRANSMISSION REGULATION 9 (

b) make rules respecting dispute resolution practices and procedures described in subsection (1). AR 86/2007 s4;255/2007;136/2019 Consultation with electricity market participants on critical transmission infrastructure milestones 4.1(1) The ISO must consult on the development of milestones with those electricity market participants that the ISO considers are likely to be directly affected by the milestones related to critical transmission infrastructure, referred to in

section 41.4 of the Act, that the ISO will use to determine the timing of (

a) the expansion of the term inals referred to in

section 1(1)(

a) and (

b) of the

Schedule to the Act, and (

b) the development of the tra nsmission facilities referred to in

section 4(

b) and (

c) of the

Schedule to the Act.

(2) After the ISO completes the consultation under subsection (1), the ISO must specify and make available to the public the milestones that apply to the critical transmission infrastructure referred to in subsection (1). AR 153/2010 s4;136/2019 Standards and standards committees 5(1) The ISO may make standards, having common application, respecting either or both of the following: (

a) transmission facilities or interconnection to transmission facilities, or both, including (

i) maintenance standards and criteria, and (ii) performance standards that apply with respect to a category or type of transmission facility; (

b) the operation and secur ity of transmission facilities, including (

i) emergency and security s tandards and procedures, (ii) reciprocal restoration agreements, (iii) policies on sharing spares, (iv) a common spares policy, and (

v) respecting issues of se curity and public safety.

Section 6 AR 86/2007 TRANSMISSION REGULATION 10

(2) The ISO must establish one or more committees to advise the ISO in addressing the ISO’s need for standards or rules respecting the matters referred to in subsection (1).

(3) Every committee established under this

section must include (

a) a representative of each TFO, and (

b) a representative of the Commission if the Commission nominates a representative to that committee.

(4) If the ISO considers that a proposed standard or rule may be directly relevant to (

a) D F O s , (

b) owners of generating units, (b.1) owners of energy storage resources, (

c) customers who are industrial systems, or (

d) persons who have made a n arrangement under

section 101(2) of the Act, the ISO must include on the committee established under this

section one or more representatives from the category of persons directly affected or must consult with those representatives in another manner the ISO considers appropriate.

(5) Repealed AR 168/2025 s3.

(6) This

section does not apply to reliability standards. AR 86/2007 s5;255/2007;153/2010;34/2024;168/2025 ISO business practices and performance targets 6(1) The ISO must establish and make available to the public (

a) practices for the efficient and effective processing and making decisions about system access service applications, and (

b) performance targets and timeframes with respect to processing and making decisions about system access service applications.

(2) The ISO must periodically make available to the public reports on meeting the performance targets and timeframes established under subsection (1).

Section 7 AR 86/2007 TRANSMISSION REGULATION 11

(3) The ISO must establish the practices, performance targets and timeframes described in subsection (1) not later than one year after this Regulation comes into force. Rules for standards, practices, policy, procedures, criteria and processes 7(1) The ISO may make rules respecting any standard, practice, policy, procedure, criteria or process referred to in this Regulation, or may adopt any standard, practice, policy, procedure, criteria or process as a rule. (2) Subsection (1) does not apply to reliability standards. AR 86/2007 s7;153/2010

Part 2 Transmission System Planning Transmission planning - forecasting need 8 In forecasting the needs of Alberta under

section 33(1) of the Act, the ISO (

a) must anticipate future dem and for electricity, generation capability and appropriate reserves required to meet the forecast load so that transmission facilities can be planned to be available in a timely manner to accommodate the forecast load and new generation capability, (

b) must make assumptions about future load growth, the timing and location of future generation additions, including areas of renewable or low emission generation, and other related assumptions to support transmission system planning, (

c) must make an assessment of the transmission facilities required to provide for the efficient and reliable access to jurisdictions outside Alberta, and (

d) may, if the ISO considers it necessary to do so, make an assessment of the contribution of a proposed transmission facility to any of the following: (

i) improving transmission system reliability; (ii) a robust, competitive electricity market; (iii) improving transmissi on system efficiency; (iv) improving operational flexibility;

Section 10 AR 86/2007 TRANSMISSION REGULATION 12 (

v) maintaining options for long term development of the transmission system. AR 86/2007 s8;255/2007;153/2010;114/2018;136/2019 9 Repealed AR 153/2010 s8. Transmission system plan 10(1) As part of its duties under sections 17 and 33(1) of the Act, the ISO must (

a) prepare and maintain a transmission system plan that projects, for at least the next 20 years, (

i) the forecast load on t he interconnected electric system, including exports of electricity, (ii) the anticipated generation capability, including appropriate reserves and imports of electricity required to meet the forecast load, (iii) the timing and locati on of future generation additions, including areas of renewable or low emission generation, (iv) the transmission fac ilities required to meet the forecast load, imports and exports of electricity and anticipated generation capability, including appropriate reserves and facilities to serve areas of renewable or low emission generation, in a timely and efficient way, (

v) the transmission facilities required to provide for the efficient and reliable access to jurisdictions outside Alberta, and (vi) other matters related to the items described in subclauses (

i) to (

v) that the ISO considers appropriate, (

b) update the transmission system plan periodically as required, but at least every 2 years, beginning June 1, 2009, including updating the plan to restore the interties referred to in sections 16 and 16.1, and (

c) make the transmission plan, including the assumptions and supporting data on which the plan is based, and the updates made to the plan, available to the public, and file copies of them with the Commission and the Minister for information.

Section 11 AR 86/2007 TRANSMISSION REGULATION 13

(2) The transmission system plan must (

a) identify the transmission facility projects the ISO proposes to initiate by a needs identification document within 5 years of the date of the plan and within 5 years of each update of the plan, and (

b) provide an anticipated implementation

schedule for each transmission facility project identified. AR 86/2007 s10;255/2007;153/2010;114/2018;168/2025 10.1 Repealed AR 175/2014 s3. Needs identification document 11(1) When the ISO prepares a needs identification document under

section 34(1) of the Act, the ISO may (

a) rely on the forecasts refe rred to in the transmission system plan, and (

b) indicate how the needs iden tification document relates to the transmission system plan.

(2) The ISO may include in a single needs identification document a description of the need for more than one transmission facility.

(3) In addition to the requirements set out in

section 34(1) of the Act, the needs identification document must describe the timing and nature of the need, constraint or condition affecting or that will affect the operation, efficiency and reliability of the transmission system, including the following: (

a) an assessment of current transmission system capability; (

b) the planning criteria used for the assessment of transmission system capability; (

c) a forecast for at least 20 years of the load on the interconnected electric system; (

d) a forecast for at least 20 years of generation capability and appropriate reserves required to meet the forecast load; (

e) the studies and analysis performed in identifying the timing and nature of the need affecting or that will affect the identified constraint or condition; (

f) the options considered for a lleviating the constraint or condition;

Section 11 AR 86/2007 TRANSMISSION REGULATION 14 (

g) the technical and economi c comparison of the options considered, including the following: (

i) the impact on generation must-run requirements described in

section 30(2)(a)(ii) of the Act; (ii) how the options relate to the transmission system plan prepared by the ISO; (iii) the evaluation of operational efficiency and reliability and the improvements provided by each option; (iv) an evaluation of each option with respect to reliability standards and the planning criteria used for the assessment of transmission system capability; (

v) the proposed transmission substation and line configurations for each option; (vi) the evaluation of factors respecting implementation of each option, including the timing and risks during construction; (vii) environmental and other considerations; (

h) the ISO’s recommendation of a preferred option, including (

i) the rationale for s electing the option, and (ii) the implementation

schedule for the option; (

i) if appropriate, (

i) a description of any o perations preparatory to construction of a transmission facility, including engineering, purchase of materials, purchase of land or options to purchase land for future use or acquire a right or interest in land for future use as a right of way, as may be necessary, and (ii) a description of the rationale, including the assumptions and supporting data on which the rationale is based, supporting the nature of the preparatory operations and estimating the cost of the operations referred to in subclause (i).

(4) If the ISO’s preferred option under subsection (3)(

h) is to construct a transmission facility at a future date, the ISO must

Section 11.1 AR 86/2007 TRANSMISSION REGULATION 15 (

a) be reasonably certain that, in the future, a transmission facility is needed, and for the purpose of determining the certainty of the need, the ISO may specify milestones, including (

i) load growth, (ii) generation addition, (iii) commitments by the prospective owners of generating units or energy storage resources to construct a unit, (iv) the receipt of payment of local interconnection costs under

Part 5, (

v) the issue of permits or approvals, or meeting other legal requirements, for the construction of a generating unit or energy storage resource, and (vi) any other indicator s prescribed by the ISO determining the certainty of the need for the construction of a transmission facility, a n d (

b) identify the process by w hich the ISO will monitor and determine whether the milestones identified under clause (

a) are met.

(5) When the milestones described in accordance with subsection (4)(

a) are met, in full or in part, the ISO may make a direction to a TFO under

section 35(1)(

a) of the Act.

(5.1) Where the Commission considers it appropriate to do so, the Commission may omit any requirement respecting a needs identification document that is provided for in this Regulation or modify how any such requirement applies, in respect of an abbreviated needs identification document.

(6) Repealed AR 175/2014 s4. AR 86/2007 s11;153/2010;175/2014;114/2018;34/2024 Needs identification document not required 11.1 Despite

section 34(1) of the Act, a needs identification document is not required for those proposals described (

a) in a rule made by the Commission that indicates a needs identification document is not required for those proposals, or

Section 11.2 AR 86/2007 TRANSMISSION REGULATION 16 (

b) in a rule made or practice established by the ISO under

section 11.2 for an abbreviated needs approval process. AR 242/2018 s3 Abbreviated needs approval process 11.2(1) The ISO must make rules or establish practices for an abbreviated needs approval process for (

a) each system access serv ice interconnection, and (

b) each transmission facility pro ject of a nature, size and cost determined by the ISO rules.

(2) In making rules or establishing practices under subsection (1), the ISO (

a) must consult with the Commission, (

b) must comply with any Commission directives or orders respecting an abbreviated needs approval process and the nature, size and cost of an interconnection or project referred to in subsection (1), and (

c) may, where the ISO consider s it appropriate to do so, omit any requirement respecting a needs identification document that is provided for in this Regulation or modify how any such requirement applies in respect of an abbreviated needs approval process.

(3) The ISO and the Commission must each periodically review the nature, size and cost provisions of the rules made under this section.

(4) Disputes respecting decisions made by the ISO resulting from the abbreviated needs approval process may be submitted to the Commission for determination. AR 242/2018 s3 Consultation with electricity market participants on particular matters 11.3 The ISO must consult with those electricity market participants that the ISO considers are likely to be directly affected by rules made or practices established under

section 11.2. AR 242/2018 s3;136/2019 12 Repealed AR 175/2014 s5.

Section 13 AR 86/2007 TRANSMISSION REGULATION 17 Delegation of responsibility 13(1) Under

section 9(2) of the Act, the ISO may, by agreement with a TFO or a DFO, delegate the preparation of any or all of (

a) the transmission system plan, or any aspect of it, or (

b) repealed AR 153/2010 s11, (

c) a needs identification document, or any aspect of it, to one or more TFOs or DFOs, subject to any conditions that the ISO considers appropriate, but the ISO is responsible for reviewing and approving any plan or document prepared under the delegation.

(2) After consultation with the Commission, electricity market participants, TFOs and DFOs, the ISO must establish a practice to determine (

a) the extent to which the preparation of the transmission system plan or a needs identification document may be delegated under subsection (1), (

b) how and to whom a delegation may be made, and (

c) the terms and conditions that may be included in a delegation agreement.

(3) The ISO must, not later than one year after this Regulation comes into force, (

a) complete the consultation required by this section, and (

b) establish the practice required by this section. AR 86/2007 s13;255/2007;153/2010;136/2019 Assistance to the ISO 14(1) As part of the duties of a TFO under

section 39 of the Act, the TFO must, as directed by the ISO, assist the ISO in (

a) preparing and updating forecasts, (

b) preparing, maintaining and updating the transmission system plan, and (

c) preparing and updating needs identification documents.

(2) In addition to the duties of a DFO under the Act, the DFO must, as directed by the ISO, assist the ISO in (

a) preparing and updating forecasts,

Section 15 AR 86/2007 TRANSMISSION REGULATION 18 (

b) preparing, maintaining and updating the transmission system plan, (

c) evaluating the relative merits of transmission and distribution options, and (

d) preparing and updating needs identification documents.

(3) In providing assistance to the ISO, the TFO and DFO must, in accordance with the directions of the ISO, respect the confidentiality of information of electricity market participants. AR 86/2007 s14;153/2010;136/2019

Part 3 Transmission System Criteria and Reliability Standards Matters taken into account 15(1) In making rules under

section 20 of the Act, and in exercising its duties under sections 17 and 33(1) of the Act, the ISO must (

a) plan a transmission syste m that satisfies reliability standards, (

b) ensure that transmission facilities adhere to reliability standards, (

c) monitor and ensure overall reliability of the interconnected electric system, (

d) comply with directives of the Commission, and (e), (

g) repealed AR 168/2025 s5, (

f) make arrangements for the expansion or enhancement of the transmission system if the ISO determines that the overall benefits of the proposed development outweigh its overall costs.

(2) Repealed AR 168/2025 s5.

(3) In considering the design and planning of the transmission system, the ISO may make or provide for exceptions to the requirements of subsection (1) and procure a non-wires service from an electricity market participant other than the owner of a transmission facility or the owner of an electric distribution system, in accordance with subsection (4).

Section 15.1 AR 86/2007 TRANSMISSION REGULATION 19

(4) The ISO must competitively procure a non-wires service referred to in subsection (3), except where (

a) there is only one electricity market participant available , (

b) competitively procuring a non -wires service is not feasible or appropriate, or (

c) it is more appropriate fo r technical reasons that the non-wires service be provided by the owner of a transmission facility.

(5) If the ISO determines that subsection (4)(

c) applies, then the ISO must prepare and submit a needs identification document to the Commission for approval under

section 34(3)(

a) of the Act. AR 86/2007 s15;255/2007;153/2010;114/2018;34/2024;168/2025 Requirement for siting transmission lines 15.1(1) In preparing plans and making arrangements for new transmission facilities or for enhancements or upgrades to existing transmission facilities, the ISO must take into consideration geographic separation for the purposes of ensuring reliability of the transmission system.

(2) When considering the location of new transmission facilities or of enhancements or upgrades to existing transmission facilities, the ISO must consider (

a) wires solutions that redu ce or mitigate the right of way, corridor or other route required, and (

b) maximizing the efficient us e of rights of way, corridors or other routes that already contain or provide for utility or energy infrastructure.

(3) The ISO must consider the measures described in subsections (1) and (2) notwithstanding that those measures may result in additional costs.

(4) In subsection (2)(a), “wires solutions” includes, without limitation, (

a) providing new transmissi on facilities that have higher ratings in combination with the salvage of transmission facilities that have lower ratings, or (

b) providing staged transmission capability increases that reduce the need to access rights of way for subsequent transmission capability increases. AR 255/2007 s7;114/2018

Section 16 AR 86/2007 TRANSMISSION REGULATION 20 Restoration and operation of Alberta-British Columbia Intertie 16(1) The ISO must prepare a plan and make arrangements to restore and operate the Alberta-British Columbia Intertie to a capability of reliably importing at or near 1200 MW of electricity into Alberta.

(2) As part of the plan referred to in subsection (1), the ISO must prepare and submit to the Commission, on or before December 31, 2026, a needs identification document for a regulated intertie project to restore the Alberta-British Columbia Intertie to a capability of reliably importing at or near 950 MW of electricity into Alberta. (3) Subsection (2) constitutes a direction of the Government for the purposes of

section 27(3).

(4) Following approval of the needs identification document referred to in subsection (2), the ISO must implement the regulated intertie project described in that subsection.

(5) The Commission’s consideration of the needs identification document is limited to assessing whether the ISO’s proposed solution to satisfy subsection (2) (

a) is not technically deficient, and (

b) is in the public interest.

(6) The ISO must make all reasonable efforts to procure ancillary services in amounts sufficient to support import flows (

a) at or near 800 MW a s soon as practicable, (

b) at or near 950 MW once the Alberta-British Columbia Intertie is restored to the capability described in subsection (2), and (

c) at or near 1200 MW once the Alberta-British Columbia Intertie is restored to the capability described in subsection (1).

(6.1) The ISO must make all reasonable efforts to maintain ancillary services in amounts sufficient to support the import flows referred to in subsection (6) at all times except when the transmission system is under abnormal operating conditions.

Section 16.1 AR 86/2007 TRANSMISSION REGULATION 21

(7) The ISO must ensure that any regulated intertie project under this

section is undertaken in a manner that does not impair the use, reliability or restoration of any other intertie, except as may be reasonably required to implement the project. AR 86/2007 s16;153/2010;34/2024;168/2025;59/2026 Expansion of Alberta-Saskatchewan Intertie 16.1(1) The ISO must prepare a plan to expand the Alberta-Saskatchewan Intertie to increase its capability to import and export electricity.

(2) The ISO must prepare and submit to the Commission, for approval, a needs identification document for a regulated intertie project to implement the plan referred to in subsection (1). (3) Subsection (2) constitutes a direction of the Government for the purposes of

section 27(3).

(4) Following approval of the needs identification document referred to in subsection (2), the ISO must undertake the regulated intertie project described in that subsection.

(5) The Commission’s consideration of the needs identification document is limited to assessing whether the ISO’s proposed solution to satisfy subsection (2) (

a) is not technically deficient, and (

b) is in the public interest.

(6) The ISO must ensure that a regulated intertie project under this

section (

a) is limited to transmission system upgrades necessary to expand the use of the Alberta-Saskatchewan Intertie, (

b) does not include transmission system upgrades that do not directly support the expansion of the Alberta-Saskatchewan Intertie, and (

c) is undertaken in a manner that does not impair the use, reliability or restoration of any other intertie, except as may be reasonably required to implement the project. AR 168/2025 s6 Operation of Alberta-Montana Tie Line 16.2(1) The ISO must make all reasonable efforts to procure ancillary services in amounts sufficient to support import flows at or near 300 MW on the Montana-Alberta Tie Line as soon as practicable and must maintain flows at that amount at all times

Section 16.3 AR 86/2007 TRANSMISSION REGULATION 22 except when the transmission system is under abnormal operating conditions.

(2) This

section does not apply in respect of imports exceeding 300 MW or any future increase in the import capability of the Montana-Alberta Tie Line.

(3) The ISO must make available to the public milestone reports on the available transfer capability restoration with respect to the Montana-Alberta Tie Line (

a) quarterly, for the duration of 2026, and (

b) annually, for each year beginning in 2027 and continuing until the available transfer capability restoration is complete. AR 168/2025 s6;59/2026 Ancillary services exemption — intertie projects 16.3 For the purposes of

section 9(6) of the Act, ancillary services procured by the ISO under

section 16(6) or 16.2(1) to support import flows do not constitute the ISO owning or holding an interest in a transmission facility, energy storage resource, electric distribution system or generating unit. AR 168/2025 s6 17 Repealed AR 168/2025 s6.

Generating unit emergency operating requirements 18(1) The ISO must make rules respecting directions it may give to the owner of a generating unit or energy storage resource that is not operating or scheduled to operate for any reason, including as a result of a planned or forced outage, requiring that the generating unit or energy storage resource operate, exchange electric energy or provide ancillary services, or be made available to operate, exchange electric energy or provide ancillary services, (

a) during abnormal operating conditions, or (

b) if the ISO determines tha t there is an immediate or unexpected need on a short term basis for services provided by a generating unit or energy storage resource to maintain a level of supply that provides Albertans with a level of service that is safe, adequate and reliable.

(2) The ISO must make rules to implement a load curtailment priority plan which, in the event of a supply shortfall, will provide for the interruption of service to customers in a priority ranking.

Section 19 AR 86/2007 TRANSMISSION REGULATION 23

(3) Before the ISO makes or changes the rules under subsections (1) and (2), the ISO must consult with those electricity market participants that it considers are likely to be directly affected by the rules.

(4) The owner of a generating unit or energy storage resource must comply with a direction from the ISO under subsection (1) unless the owner gives written notice to the ISO, giving reasons, that (

a) a real and substantial risk of damage to its generating unit or energy storage resource could result if the direction were complied with, (

b) a real and substantial risk to the safety of its employees or the public could result if the direction were complied with, or (

c) a real and substantial ri sk of undue injury to the environment could result if the direction were complied with. AR 86/2007 s18;255/2007;136/2019;34/2024 Reliability standards 19(1) Subject to this section, the following are the reliability standards that apply in Alberta: (

a) the reliability standards , agreements, criteria and directives of (

i) the Western Electric Coordinating Council or its successor organization, (ii) the North American Electric Reliability Council or its successor organization, or (iii) any entity similar to an en tity referred to in subclause (

i) or (ii) that is recognized by the ISO, to the extent that those reliability standards, agreements, criteria and directives are adopted by the ISO in accordance with subsections (4) and (5); (

b) any other reliability standar ds that are made or adopted by the ISO in accordance with subsections (4) and (5) to amend, supplement or replace the reliability standards, agreements, criteria and directives referred to in clause (a).

Section 20 AR 86/2007 TRANSMISSION REGULATION 24

(2) The following are the reliability standards that apply in Alberta if the Minister recognizes an Electric Reliability Organization under

section 20: (

a) the reliability standards , agreements, criteria and directives of the Electric Reliability Organization or its successor organization, to the extent that those reliability standards, agreements, criteria and directives are adopted by the ISO in accordance with subsections (4) and (5); (

b) any other reliability standar ds that are made or adopted by the ISO in accordance with subsections (4) and (5) to amend, supplement or replace the reliability standards, agreements, criteria and directives referred to in clause (a).

(3) The reliability standards under subsection (2) replace the reliability standards under subsection (1).

(4) Before adopting or making reliability standards, agreements, criteria or directives under this section, the ISO must (

a) consult with those electricity market participants that it considers are likely to be directly affected, and (

b) forward the proposed relia bility standards, agreements, criteria or directives to the Commission for review, with the ISO’s recommendation that the Commission approve or reject them.

(5) Subject to subsection (6), the Commission must approve or refuse to approve the reliability standards, agreements, criteria or directives, and must inform the ISO of its decision.

(6) The Commission must follow the recommendation of the ISO that the Commission approve or reject the proposed reliability standards, agreements, criteria or directives unless an interested person satisfies the Commission that the ISO’s recommendation is (

a) technically deficient, or (

b) not in the public interest. AR 86/2007 s19;255/2007;136/2019 Recognition of Electric Reliability Organization 20(1) The Minister may enter into any arrangement or agreement or grant any approval that the Minister considers necessary or advisable for the purposes of granting recognition to an Electric Reliability Organization that is or has applied to be certified by the

Section 21 AR 86/2007 TRANSMISSION REGULATION 25 Federal Energy Regulatory Commission under the Energy Policy Act of 2005 of the United States or to its successor organization.

(2) The Minister may issue any directive to the ISO or the Commission respecting the exercise of its authority that the Minister considers necessary or advisable respecting or for the purposes of implementing an arrangement or agreement entered into or an approval granted by the Minister under subsection (1).

(3) An arrangement or agreement entered into, an approval granted or a directive given by the Minister under this

section (

a) may be made subject to terms and conditions, and (

b) may be amended, revoked o r cancelled at any time by the Minister without prior notice.

(4) When entering into an arrangement or agreement or granting an approval under subsection (1) or issuing a directive under subsection (2), the Minister must (

a) consider whether the arrang ement, agreement, approval or directive is capable of applying in Alberta, (

b) consider the impact of the arrangement, agreement, approval or directive on Alberta’s competitive electricity market, and (

c) ensure, to the extent reasonable, that any new or modified arrangement, agreement, approval or directive that will apply in Alberta will not require a material change in the framework for the electricity market. AR 86/2007 s20;255/2007;114/2018;136/2019 Reliability standards adoption, publication and modification 21(1) The ISO must not, without the consent of the Commission, (

a) enter into an arrangement or agreement under

section 9(5) of the Act respecting reliability standards, or (

b) amend or change an arrangement or agreement referred to in clause (

a) except where the amendment or change is clearly of a routine operational or detailed technical nature.

(2) Arrangements and agreements entered into under

section 9(5) of the Act and reliability standards developed, adopted or modified by the ISO pursuant to

section 19 or 20 of this Regulation must be made available to the public except when the ISO considers it not

Section 22 AR 86/2007 TRANSMISSION REGULATION 26 to be in the public interest to do so, in which case an explanation for the non-disclosure must be provided.

(3) When the ISO participates in the development, adoption or modification of reliability standards, the ISO must (

a) consider whether the standards are capable of applying in Alberta, and (

b) ensure, to the extent reason able, that any new or modified standard that will apply in Alberta will not require a material change in the framework for the electricity market. AR 86/2007 s21;255/2007;114/2018;136/2019 Alberta autonomy 22(1) The ISO shall not, without the consent of the Minister, delegate any of its powers, duties, responsibilities or functions respecting reliability standards to a person outside Alberta or enter into any agreement or arrangement that has that effect.

(2) The ISO shall not (

a) transfer any money outside of Alberta, or make a payment in Alberta that may result in the transfer outside of Alberta of any money, in respect of a fine, administrative penalty or other monetary sanction imposed on the ISO for non-compliance by it with a reliability standard, or (

b) enter into any agreement or arrangement that requires or has the effect of requiring the ISO to do anything prohibited under clause (a).

(3) If any fine, administrative penalty or other monetary sanction is imposed on the ISO for non-compliance by it with a reliability standard, the money paid must be directed to the General Revenue Fund.

(4) The ISO may recover from an electricity market participant any money in respect of a fine, administrative penalty or other monetary sanction imposed on the ISO for non-compliance by it with a reliability standard if the ISO has paid the money in respect of the fine, administrative penalty or monetary sanction and can demonstrate that an electricity market participant was the cause of the non-compliance.

(5) Any dispute with respect to subsection (4) must be settled by the Commission. AR 86/2007 s22;255/2007;153/2010;136/2019

Section 23 AR 86/2007 TRANSMISSION REGULATION 27 Compliance with monitoring and reporting 23(1) The ISO must establish practices and procedures for monitoring compliance by electricity market participants with (

a) ISO rules, (

b) reliability standards, and (

c) standards and rules made under

section 5.

(2) The Market Surveillance Administrator must make available to the public annual reports respecting (

a) compliance by the ISO, TFO s, DFOs and other electricity market participants with ISO rules, reliability standards and standards and rules made under

section 5, and (

b) any action taken by the Market Surveillance Administrator to enforce ISO rules, reliability standards and standards and rules made under

section 5. AR 86/2007 s23;255/2007;153/2010;136/2019 Forbearance 23.1(1) The Market Surveillance Administrator may decide to refrain, in whole or in part and conditionally or unconditionally, from the exercise of any power or the carrying out of any part of its mandate if the Market Surveillance Administrator finds as a question of fact that there are in place practices, processes, plans or any other measures sufficient to protect the safe, reliable and economic operation of the interconnected electric system.

(2) The Market Surveillance Administrator shall not refrain under subsection (1) if the Market Surveillance Administrator finds as a question of fact that to refrain would be likely to impair unduly the safe, reliable and economic operation of the interconnected electric system. AR 153/2010 s16

Part 4 Transmission Facility Projects General rules for constructing transmission facilities 24(1) Subject to subsections (2) and (3), when making rules under

section 20 of the Act and in exercising its duties under

section 17 of the Act, the ISO must (

a) determine, on the basis of geographic areas under sections 28 and 29 of the Hydro and Electric Energy Act, who is eligible to apply for the construction or operation, or both,

Section 24.1 AR 86/2007 TRANSMISSION REGULATION 28 of transmission facilities in those areas after August 12, 2004, based on which TFO is operating in those areas, and (

b) with respect to a transmission facility that existed on August 12, 2004, provide that the owner of that transmission facility, or any successor of the owner of that transmission facility, continues to be responsible for upgrades and enhancement to the transmission facility.

(2) The ISO may grant or provide for exceptions to subsection (1), including authorizing alternative arrangements or agreements between TFOs, if (

a) those arrangements or agr eements result in the safe, reliable and efficient operation of the transmission system, and (

b) those arrangements or ag reements are filed with the Commission for information. (3) Subsection (1) does not apply in respect of (

a) a new regulated intertie , in which case

section 24.2 applies, (a.1) a new or existing mercha nt intertie, in which case

section 24.32 applies, (

b) critical transmission infrast ructure in respect of which the Minister has made a determination under

section 24.1(1) as it read at any time before September 22, 2014, if the determination was still in effect immediately before September 22, 2014, (

c) a transmission facility refe rred to in

section 4 of the

Schedule to the Act, or (

d) repealed AR 175/2014 s6, (

e) a proposal submitted to the ISO under

section 24.31 by an electricity market participant. AR 86/2007 s24;255/2007;160/2009;153/2010;175/2014; 136/2019;34/2024;168/2025 Transitional - critical transmission infrastructure 24.1(1) Where critical transmission infrastructure is being constructed or operated, or both, on September 22, 2014 pursuant to a determination made by the Minister under this

section as it read at any time before September 22, 2014, the determination continues in effect and subsections (2) and (3) continue to apply in respect of that critical transmission infrastructure.

Section 24.2 AR 86/2007 TRANSMISSION REGULATION 29

(2) The ISO must have regard to a determination referred to in subsection (1) when carrying out the ISO’s functions under the Act and regulations, including when giving a direction under

section 41.3 of the Act.

(3) The Commission, when considering approval of the matters in

section 142(1)(l)(iii)(

B) and (

C) of the Act, must have regard to a determination referred to in subsection (1).

(4) Repealed AR 175/2014 s7. AR 160/2009 s3;288/2009;153/2010;175/2014 Competitive process to develop certain transmission facilities 24.2(1) For the purposes of this section, “competitive process” means a fair and open process that allows any qualified person, as determined by the ISO, to submit a proposal in respect of a transmission facility, including a financial bid, as the method to determine the person referred to in subsection (2).

(2) The ISO must establish a competitive process to determine who is eligible to apply to construct and operate (

a) a new regulated intertie des cribed in

section 24(3)(a), and (

b) a transmission facility described in

section 24(3)(c).

(3) Before the ISO implements a competitive process developed under subsection (2), the ISO must obtain the Commission’s approval of the competitive process.

(4) Where the Commission approves a competitive process developed under subsection (2), the Commission must consider any resulting arrangements, including any changes requiring the Commission’s approval or determination pursuant to

section 24.3(3) or (4), as prudent.

(5) The competitive process developed under subsection (2) must not exclude (

a) a TFO, whether or not the TFO has undertaken any work or provided any services to the ISO in respect of a proposed transmission facility, or (

b) any other person that h as undertaken any work or provided any services to the ISO in respect of a proposed transmission facility unless the TFO or other person does not have the necessary qualifications to participate in the competitive process.

Section 24.3 AR 86/2007 TRANSMISSION REGULATION 30

(6) Subject to subsection (7), the ISO may request, and a TFO or other person must provide, any records to the ISO that are necessary to develop and implement a competitive process.

(7) If there is a dispute between the ISO and a TFO or other person regarding whether a record is necessary for the purposes of the ISO as referred to in subsection (6), the matter must be determined by the Commission.

(8) A competitive process that is approved by the Commission may be used by the ISO for more than one transmission facility project. AR 153/2010 s18;156/2012;175/2014;168/2025 Resulting arrangements – changes or disputes 24.3(1) For the purposes of this section, (a) “eligible person” means the person determined to be eligible to apply in accordance with

section 24.2(2); (b) “resulting arrangement” me ans a resulting arrangement referred to in

section 24.2(4).

(2) The ISO and the eligible person may change a resulting arrangement, including the payment,

schedule and other obligations set out in the resulting arrangement, if the change is allowed for by the terms of a resulting arrangement.

(3) The Commission’s approval must be obtained before the ISO and the eligible person make a change if in the opinion of the ISO (

a) a material change to the re sulting arrangement is required, and (

b) the change may not be made under the terms of a resulting arrangement.

(4) If a dispute arises between the ISO and the eligible person regarding a resulting arrangement and cannot be resolved between them, the ISO and the eligible person must submit the dispute to the Commission for determination. AR 156/2012 s3 Proposal for construction and temporary operation of a transmission facility 24.31(1) For the purposes of this section, (a) “incumbent TFO”, in resp ect of a transmission facility that is the subject of a proposal, means

Section 24.31 AR 86/2007 TRANSMISSION REGULATION 31 (

i) the person determined under (A)

section 24(1)(a), (

B) section 24.1(1) as it read at any time before September 22, 2014, or (

C) the process developed in accordance with

section 24.2(2) to be eligible to apply for the construction or operation, or both, as the case may be, of the transmission facility, or (ii) a person having responsi bility under

section 24(1)(

b) in respect of the transmission facility; (b) “proposal” means a proposal under this section; (c) “successor” means a pers on who, at any time after ownership of a transmission facility that is the subject of a proposal is transferred by an electricity market participant to an incumbent TFO, acquires ownership of the property in respect of which the transmission facility was constructed to provide system access service.

(2) An electricity market participant may, in accordance with this section, submit a proposal to the ISO for the construction and temporary operation of a transmission facility.

(3) A proposal may be submitted under this

section only (

a) in respect of a radial tra nsmission facility, unless the electricity market participant and incumbent TFO agree to a different configuration of transmission facility, (

b) if the transmis sion facility is proposed to be constructed by the electricity market participant to provide system access service solely to the electricity market participant, and (

c) if the transmission fac ility is proposed to be jointly operated by the electricity market participant and the incumbent TFO for a temporary period specified in the proposal. (4) Subsection (3) applies whether the proposal (

a) is submitted for the purpos es of

section 35(1)(

b) of the Act to meet a need identified in a needs identification document, or

Section 24.31 AR 86/2007 TRANSMISSION REGULATION 32 (

b) is a proposal for which, p ursuant to this Regulation, no needs identification document is required.

(5) Where the proposal is one for which no needs identification document is required, the ISO must approve or refuse to approve the proposal in the same manner as if it were acting under

section 36(1) of the Act.

(6) Where the ISO approves the proposal, it may specify a time within which the electricity market participant and incumbent TFO must apply for a permit under the Hydro and Electric Energy Act to construct the transmission facility and a licence to jointly operate the transmission facility for the temporary period referred to in subsection (3)(c).

(7) Where the ISO approves the proposal, the electricity market participant and incumbent TFO must, (

a) before applying for any permit, licence or approval under the Hydro and Electric Energy Act to construct or operate the transmission facility, enter into a written agreement under which ownership of the transmission facility will transfer from the electricity market participant to the incumbent TFO on the expiry of the temporary period referred to in subsection (3)(c), and (

b) before operatin g the transmission facility, enter into a written agreement under which they will jointly operate it.

(8) Despite a transfer of ownership of a transmission facility from the electricity market participant to the incumbent TFO, the electricity market participant and its successors, if any, remain responsible to pay the costs of any liability incurred by the incumbent TFO as a result of acts or omissions by the electricity market participant during design or construction of the transmission facility.

(9) Where (

a) ownership of a transmissi on facility has transferred from the electricity market participant to the incumbent TFO, and (

b) the incumbent TFO is unable to recover costs referred to in subsection (8) from the electricity market participant or its successor because of the insolvency of the electricity market participant or successor,

Section 24.32 AR 86/2007 TRANSMISSION REGULATION 33 the Commission must, in making a decision respecting rates for the TFO, consider that the costs are prudent unless an interested party satisfies the Commission that those costs are not prudent. AR 242/2018 s4;136/2019 Eligibility for merchant intertie projects 24.32(1) A person proposing a merchant intertie project is eligible to apply to the ISO to develop the project in accordance with

section 27. (2) Sections 24(1) and 24.2 do not apply to a merchant intertie project.

(3) For greater certainty,

section 27 continues to apply to merchant intertie projects, including (

a) the ISO’s determination under

section 27(5) regarding system reliability and the public interest, (

b) the allocation of costs under

section 27(8), and (

c) the open access obligations under

section 27(9). AR 168/2025 s9 DFO’s approval of request for direct system access service 24.4(1) A DFO must, within 30 days after receiving a request from an electricity market participant for approval under

section 101(2)(

a) of the Act, (

a) approve the request if the DFO determines that (

i) there would be no adverse effects to the electric distribution system, (ii) the existing electric d istribution system cannot reasonably serve to connect the electricity market participant, and (iii) at the time of the reque st the DFO does not have plans for an expansion of the electric distribution system that could serve to connect the electricity market participant in an efficient manner, o r (

b) deny the request if the D FO determines that any of the criteria in clause (a)(i), (ii) or (iii) are not met or approve the request with conditions if compliance with the conditions would ensure that the criteria in clause (a)(i), (ii) and (iii) will be met.

Section 25 AR 86/2007 TRANSMISSION REGULATION 34

(2) If the DFO denies a request or approves the request with conditions, it must give the electricity market participant written notice of the decision, including the reasons for the denial or the imposition of the conditions.

(3) If a DFO submits a system access service request to the ISO on behalf of an electricity market participant, the DFO must provide to the electricity market participant any information it requests pertaining to the system access service request.

(4) If a dispute arises between the DFO and an electricity market participant involved in a request for approval under

section 101(2)(

a) of the Act, the DFO or the electricity market participant may submit the dispute to the Commission for determination. AR 175/2014 s9;136/2019 Transmission facility project cost reporting 25(1) For those transmission facility projects that the ISO directs or may direct a TFO under

section 35(1)(

a) of the Act or a person under

section 41.3 of the Act to submit for Commission approval, the ISO must make rules or establish practices respecting the preparation of cost estimates, project scope documents and

schedule documents for projects to ensure that (

a) cost estimates prepared by a TFO or other person under this

section are reasonable for the purpose of making transmission system planning decisions, (

b) cost estimates are prepared by a TFO or other person in a consistent manner and to an appropriate level of detail, (

c) scope change,

schedule ch ange and cost variance reports are prepared and retained by the TFO in a consistent manner and to an appropriate level of detail, and (

d) a project cost

summary is prepared that identifies the original cost estimate, original scope and original

schedule and a

summary of any changes or cost variances that occurred.

(2) The ISO may satisfy itself that the cost estimates prepared by a TFO or other person under this

section are reasonable, but in doing so may only examine issues that are relevant to the intended use of the cost estimates.

(3) Nothing in the ISO rules or practices relieves a TFO from the burden of proof required by

section 121(4) of the Act to show that its tariff is just and reasonable.

Section 25.01 AR 86/2007 TRANSMISSION REGULATION 35

(4) Nothing in this section,

section 5 or the ISO rules or practices affects (

a) the responsibility of the Commission to determine a TFO’s or other person’s prudence in managing its activities, or (

b) the authority of the Commission to establish its own reporting requirements.

(5) In addition to its duties under

section 17 of the Act, the ISO may do either or both of the following: (

a) certify to the Commission t hat a cost was incurred to meet a need identified by the ISO or a direction of the ISO; (

b) notify the Commission of any concern or issue the ISO has with respect to the costs of a transmission facility project referred to in subsection (1), but the Commission must not require the ISO to make any statement with respect to a TFO’s or other person’s prudence in managing a transmission facility project.

(6) Within a reasonable period after rules are made under subsection (1), a TFO must apply to the Commission to make its tariff consistent with those rules.

(7) This

section does not apply to transmission facilities to which the competitive process described in

section 24.2 applies. AR 86/2007 s25;255/2007;153/2010;175/2014 Approval of cost estimate 25.01(1) This

section applies to a transmission facility or a class of transmission facilities identified in a rule made by the Commission under subsection (7), but does not apply to transmission facilities to which

section 24.2 applies.

(2) Where construction of a transmission facility is proposed, the TFO must submit an estimate of the project costs to the Commission for approval.

(3) The cost estimate must be submitted by the TFO (

a) unless clause (

b) applies, w ithin 180 days after the day the Commission issues a permit to the TFO under the Hydro and Electric Energy Act to construct the transmission facility, or

Section 25.2 AR 86/2007 TRANSMISSION REGULATION 36 (

b) within a time period ordered by the Commission, which may be a longer or shorter period than that provided in clause (a).

(4) If the Commission finds the cost estimate submitted by the TFO is too high or too low, the Commission may approve an amount of costs that is higher or lower than that in the cost estimate.

(5) The TFO may, at any time after a cost estimate is approved but before construction of the transmission facility is completed, apply to the Commission to increase the approved cost estimate, and where such an application is made subsection (6) and any rules made under subsection (7) apply in respect of the application.

(6) In making a decision respecting rates for the TFO, the Commission must consider the actual project costs of the transmission facility to be prudent if the actual project costs are equal to or less than a cost estimate approved under this section.

(7) The Commission, for the purposes of this section, (

a) must make rules identifying the transmission facilities or classes of transmission facilities to which this

section applies, and (

b) may make rules establishi ng factors for the Commission to consider in determining whether to approve a cost estimate under this section. AR 242/2018 s5 25.1 Repealed AR 34/2024 s9. ISO direction to TFO or other person 25.2 At any time after the ISO gives a direction to a TFO under

section 35(1)(

a) of the Act or a person under

section 41.3 of the Act, the ISO may direct the TFO or other person to acquire equipment and materials, including related engineering services, whose lengthy delivery time may adversely affect the reliability of the transmission system. AR 153/2010 s20 Competitive tenders 26(1) In making rules under

section 20 of the Act, and in exercising its duties under

section 17 of the Act, the ISO (

a) must provide for the competitive tender of construction costs, including materials and equipment, for the construction of a transmission facility by a TFO or other person who is the applicant for construction of a

Section 27 AR 86/2007 TRANSMISSION REGULATION 37 transmission facility referred to in

section 24(1) or 24.1, and (

b) may exempt or provide for exemptions from the competitive tender when the circumstances warrant.

(2) When considering a tariff application by a TFO, the Commission must judge the prudence of the costs incurred under an exemption provided by or under the rules referred to in subsection (1).

(3) Within a reasonable period after rules are made under subsection (1), a TFO must apply to the Commission to make its tariff consistent with those rules. AR 86/2007 s26;255/2007;153/2010 Development of intertie projects 27(1) This

section applies in respect of the following intertie projects: (

a) the proposed construction of a new intertie; (

b) the proposed upgrade or enhancement of an existing intertie that would increase its path rating.

(2) The ISO must prepare a needs identification document under

section 34(1) of the Act for a regulated intertie project to which this

section applies.

(3) Despite subsection (2), the ISO is permitted to prepare a needs identification document for a regulated intertie project at the direction of the Government if that direction is expressly specified in this Regulation.

(4) If an intertie project is a merchant intertie project, the person proposing it must apply to the ISO to develop the intertie.

(5) The ISO must prepare a needs identification document under

section 34(1) of the Act for a merchant intertie project, unless the ISO determines that the project would negatively impact system reliability or is not in the public interest.

(6) If the ISO prepares a needs identification document for a merchant intertie project, the document must include (

a) the information required by

section 11(3), unless the ISO determines that any of those matters are not required, (

b) a description of the exten t to which the ISO will make use of the proposed merchant intertie to provide system access service,

Section 27 AR 86/2007 TRANSMISSION REGULATION 38 (

c) any proposed agreements, arrangements, rates and terms and conditions for the ISO’s use of the merchant intertie, and (

d) any other information that the ISO considers necessary in view of the nature of the proposed merchant intertie.

(7) If the ISO prepares a needs identification document for a merchant intertie project, the person proposing the merchant intertie must assist the ISO in the preparation of the document and provide any information the ISO requires.

(8) Under this section, the cost of planning, designing, constructing, operating and interconnecting a regulated or merchant intertie project must be paid as follows: (

a) for a regulated intertie pro ject, by the applicable TFO with costs recovered through the ISO tariff as approved by the Commission; (

b) for a merchant intertie project, by (

i) the person proposing the merchant intertie, and (ii) any other person who directly benefits from the merchant intertie based on the use described in the approved needs identification document and only to the extent permitted by the ISO tariff.

(9) A person proposing a merchant intertie project must, in accordance with the ISO rules, provide open access to the merchant intertie for electricity market participants (

a) by means of an auction or other transparent process for available transfer capability, and the person proposing a merchant intertie project must file the terms and conditions of that open access for information with the Commission, and (

b) by ensuring that the mercha nt intertie is available on a fair, open and non-discriminatory basis, similar to the access available to other transmission facilities in Alberta.

(10) The ISO must include in the ISO tariff (

a) the rates and terms and con ditions for use of a merchant intertie by electricity market participants, and (

b) any applicable charges for use of the interconnected electric system for that service. AR 86/2007 s27;168/2025

Section 28 AR 86/2007 TRANSMISSION REGULATION 39

Part 5 Local Interconnection Costs and Transmission Contribution Costs Local interconnection costs 28(1) The ISO must include in the ISO tariff (

a) local interconnection costs, as defined by the ISO, payabl e by an owner of a generating unit or energy storage resource for connecting to the transmission system, (

b) the terms and conditions, and (

c) provisions for the recovery of local interconnection costs from owners of generating units or energy storage resources.

(2) The ISO must make reasonable efforts to ensure that the interconnection of a generating unit or energy storage resource to the transmission system is undertaken in a timely manner.

(3) The owner of a generating unit or energy storage resource that interconnects with the transmission system, and who has paid local interconnection costs, may not prohibit interconnection or access to the interconnection facilities by other electricity market participants.

(4) If another person makes use of the facilities for which a local interconnection cost has been paid, (

a) the cost of the use of th ose facilities by that other person or persons must be allocated to all users in accordance with the ISO tariff, and (

b) the original local interconnection cost, or a portion of i t, must be refunded to the person who paid it in accordance with the ISO tariff. AR 86/2007 s28;136/2019;34/2024 Generating unit owner’s contribution 29(1) The ISO must include in the ISO tariff (

a) the amount, determined under subsections (2) and (3), payable by an owner of a generating unit or energy storage resource to the ISO, and (

b) terms and conditions related to clause (a).

(2) The amount payable by owners of generating units or energy storage resources is the sum of the following:

Section 29 AR 86/2007 TRANSMISSION REGULATION 40 (

a) for upgrades to existing tr ansmission facilities, a charge of $10 000/MW; (

b) a charge of not more th an $40 000/MW, as provided in the ISO tariff, payable by owners of generating units or energy storage resources that locate in an area of the transmission system where supply exceeds load, and the amount of the charge is to be determined based on the location of the generating unit or energy storage resource relative to load.

(3) A charge under subsection (2)(

b) may be revised from time to time, but must (

a) be stable and predictable, (

b) be calculated in a simple and transparent manner, (

c) be based on generating un it or energy storage resource size, (

d) vary based on the supply location relative to load in Alberta, (

e) be determined and payab le in accordance with the ISO rules and the ISO tariff, be paid before commencement of construction of the local interconnection facility and be paid once only for that specific location and generating unit or energy storage resource, and (

f) not affect charges determined and paid by owners of generating units or energy storage resources or owners of prospective generating units or energy storage resources before the revisions.

(4) The ISO tariff must include terms and conditions providing for the following: (

a) the refund of money paid under this

section for the satisfactory operation of a generating unit or energy storage resource over a period of not more than 10 years from, (

i) in the case of a generating unit, the date the generating unit begins to generate electric energy, or (ii) in the case of an energy storage resource, the date the energy storage resource begins to use electric energy as an input or supply electric energy as an output,

Section 29.01 AR 86/2007 TRANSMISSION REGULATION 41 for the purpose of exchange, but not for the purpose of testing or commissioning the generating unit or energy storage resource; (

b) forfeiture to the ISO of money paid under this section, or suspension of the refunds, if the generating unit or energy storage resource is not operated satisfactorily; (

c) the means and times at whic h the refunds are to be made; (

d) the prudent administration, management and investment of money held by the ISO under this

section and for the accounting for those funds; (

e) the disbursement of money earned on investments.

(5) The ISO must make rules to be used to assess the satisfactory performance of a generating unit or energy storage resource by generating unit or energy storage resource type.

(6) This

section expires on the effective date of the ISO tariff that includes a transmission reinforcement payment under

section 29.1, except as otherwise provided in

section 29.2. AR 86/2007 s29;34/2024;168/2025 Generating unit owner’s contribution refund 29.01(1) If the owner of a generating unit or energy storage resource submitted an application to cancel a system access request during the period beginning on January 1, 2025 and ending on December 1, 2025, the owner is eligible for a payment from the ISO equal to the amount of money that the owner paid under

section 29.

(2) Notwithstanding subsection (1), the payment an owner of a generating unit or energy storage resource is entitled to does not include a payment in respect of an amount of money that the owner forfeited to the ISO in accordance with terms and conditions in the ISO tariff referred to in

section 29(4)(b). AR 59/2026 s4 Transmission reinforcement payment 29.1(1) The ISO tariff must include a transmission reinforcement payment that is payable by the owner of (

a) a new generating unit or energy storage resource, or (

b) an existing generating unit or energy storage resource in respect of any capacity for which the owner has not

Section 29.1 AR 86/2007 TRANSMISSION REGULATION 42 previously paid a transmission reinforcement payment under clause (

a) or a charge under

section 29(2)(b).

(2) This

section does not apply until the date on which an ISO tariff that includes a transmission reinforcement payment comes into effect following approval by the Commission.

(3) The ISO tariff must also set out (

a) the method by which the transmission reinforcement payment is to be calculated, and (

b) the terms and conditions that apply to the transmission reinforcement payment, which must include the following: (

i) the prudent administration, management and investment of money collected; (ii) accounting for money co llected and any investment earnings; (iii) disbursement of earnings; (iv) application of all amounts collected and earned under this

section to offset the ISO’s annual transmission-related revenue requirement.

(4) The transmission reinforcement payment must be determined based on (

a) available transmission system capacity, (

b) the technical characteristic s of the generating unit or energy storage resource, and (

c) the cost of reinforcing the transmission system.

(5) The transmission reinforcement payment (

a) must be equal to or greater than $0 per MW, and (

b) is not subject to a maximum limit.

(6) The ISO must determine and apply the transmission reinforcement payment in accordance with the ISO tariff and the ISO rules.

(7) A transmission reinforcement payment is not refundable.

Section 29.2 AR 86/2007 TRANSMISSION REGULATION 43

(8) Amounts collected through the transmission reinforcement payment must be used solely in the manner described in subsection (3)(b)(iv). AR 168/2025 s12 Transition from generating unit owner’s contribution to transmission reinforcement payment 29.2(1) Despite the expiry of

section 29 under

section 29(6), the ISO tariff must continue to include the terms and conditions set out in

section 29(4)(a), (c), (

d) and (

e) as they read immediately before that expiry.

(2) For the purposes of subsection (1), the ISO may continue to administer amounts paid under

section 29 and refund those amounts in accordance with the ISO tariff and the ISO rules.

(3) Nothing in this

section affects any obligation or entitlement that arose under

section 29 before the date of its expiry. AR 168/2025 s12 Non-application of sections 28 and 29 30 Sections 28 and 29 do not apply to a generating unit connected to the transmission system before January 1, 2006 or to a generating unit or energy storage resource that has a rated capacity of 1 MW or less. AR 86/2007 s30;114/2018;34/2024

Part 6 Transmission System Losses, Charges and Credits Transmission system loss factors 31(1) The ISO must make rules to (

a) reasonably recover the cost of transmission line losses on the interconnected electric system by establishing and maintaining loss factors (

i) for each generating unit or energy storage resource, (ii) for each export path or group of export paths, as those terms are defined in the ISO rules respecting line losses, (iii) for each import path or group of import paths, as those terms are defined in the ISO rules respecting line losses, and

Section 31 AR 86/2007 TRANSMISSION REGULATION 44 (iv) for any other opportunity service customer in respect of whom the ISO determines a loss factor is to apply, based on their respective locations and their respective contributions, if at all, to transmission line losses, (

b) determine the anticipated transmission line losses for a specified period of time and determine the average transmission system loss factor for that specified period, (

c) establish a means of determining, for each location on the transmission system, loss factors and associated charges and credits, which are anticipated to result in the reasonable recovery of the costs of transmission line losses, (

d) provide a means by which , annually, a determination will be made of the difference between the anticipated transmission line losses and the actual transmission line losses, and (

e) subject to

section 33, provide a means through the application of a single calibration factor to adjust the amounts paid by the application of the loss factor described in clause (

c) so that (

i) owners of generating units or energy storage resources, (ii) importers and the exporters of electricity, and (iii) any other opportunity s ervice customers referred to in clause (a)(iv), are charged or receive a cred it so that they pay the actual cost of transmission line losses.

(2) In accordance with the rules made under subsection (1), the ISO must determine loss factors having regard to the following: (

a) loss factors must apply for a period of at least one year but not more than 5 years, subject to clause (b); (

b) a loss factor applied under clause (

a) may not be changed during the period it applies unless, in the opinion of the ISO, (

i) a change has occurred to any type of facility, including generation, energy storage, load or transmission facility, that is connected to, or is part of, the interconnected electric system, and

Section 32 AR 86/2007 TRANSMISSION REGULATION 45 (ii) the change materially affects transmission line losses; (

c) loss factors must be determined for each location on the transmission system as if no abnormal operating conditions exist; (

d) the loss factor in each location must be representative of the impact on average system losses by one or more generating units or energy storage resources or a combination of generating units and energy storage resources relative to load; (

e) the loss factor must be one number at each location that does not vary, except as a result of revisions referred to in clause (

b) or the reapplication of loss factors under clause (a); (

f) subject to clause (g), after determining which loss factor s result in a charge or credit, every loss factor must be adjusted by a common method in order to limit the loss factors as follows: (

i) loss factors associated w ith a charge must not exceed 2 times the average transmission system loss factor; (ii) loss factors associated w ith a credit must not exceed one times the average transmission system loss factor; (

g) on and after January 1, 20 09, and in place of clause (f), after determining which loss factors result in a charge or credit, every loss factor must be adjusted by a common method in order to limit the loss factors as follows: (

i) the loss factors associated with a charge must not exceed 12%; (ii) the loss factors associ ated with a credit must not exceed 12%.

(3) For greater certainty, abnormal operating conditions referred to in subsection (2)(

c) do not include generation from transmission must-run generating units if the ISO includes those units in its transmission loss forecasts. AR 86/2007 s31;255/2007;242/2018;34/2024 Loss factors to be publicly available 32(1) The ISO must make rules with respect to the designation of loss factors in any place in Alberta where a generating unit or

Section 33 AR 86/2007 TRANSMISSION REGULATION 46 energy storage resource is not located, and on request, determine a loss factor with respect to a generating unit or energy storage resource that a person proposes to construct.

(2) Loss factors determined under

section 31 and subsection (1) of this

section must be made available to the public for each location on the transmission system. AR 86/2007 s32;34/2024 Adjustment of loss factors 33(1) In accordance with the ISO rules, loss factors may be adjusted by a calibration factor to ensure that the actual cost of losses is reasonably recovered through charges and credits under the ISO tariff on an annual basis.

(2) If the actual cost of losses is over-recovered or under-recovered in one year, the over-recovery or under-recovery must be refunded or collected in the next year or subsequent years. Recovery of transmission losses 34 In accordance with the ISO rules, the cost of transmission line losses must be reasonably recovered using the loss factors determined under

section 36 as those loss factors are charged or credited to the persons referred to in

section 31(1)(

e) under the ISO tariff. AR 86/2007 s34;34/2024 35 Repealed AR 34/2024 s16. Determination of transmission loss factors 36 The loss factors under this Part must be determined so that (

a) the owner of a generating unit or energy storage resource must pay location-based loss charges or receive credits, (

b) importers of electricity must pay location-based loss charges or receive credits (

i) determined in the same manner as for generating units or energy storage resources, and (ii) determined at the point where the import path, referred to in

section 31(1)(a)(iii), connects to the remainder of the interconnected electric system, (

c) importers and exporters of electricity must pay transmission line loss charges representing the average level of losses incurred in transporting electricity on an

Section 37 AR 86/2007 TRANSMISSION REGULATION 47 import path or export path referred to in

section 31(1)(a)(ii) and (iii), and (

d) a person that receives o pportunity service where the ISO determines that a line loss factor applies under

section 31(1)(a)(iv) must pay losses or receive credits that are determined in a similar manner as the losses and credits determined for owners of a generating unit or energy storage resource. AR 86/2007 s36;255/2007;34/2024

Part 7 Commission Responsibilities Application to Commission for preparatory operations 37(1) In anticipation of future expansions of the transmission system, the ISO may apply to the Commission for approval of any operations preparatory to construction of a transmission facility, including critical transmission infrastructure, at any time after the ISO has filed the transmission system plan or an update with the Commission and the Minister for information under

section 10(1)(

c) where that plan includes transmission facilities in respect of which the ISO determines preparatory operations are appropriate.

(2) An application under this

section must contain the information set out in

section 11(3)(

i) and any other information the ISO considers appropriate or the Commission requests.

(3) When considering an application under this section, the Commission may, in addition to the factors set out in

section 38, have regard for the costs and benefits that the Commission considers are likely to result from the proposed preparatory operations.

(4) An approval of an application under this

section is not to be considered an approval of the need for the transmission facility or an approval to construct the transmission facility, and shall not be used for the purpose of an application to the Surface Rights Commission for the acquisition of an interest in land for a right of way. AR 86/2007 s37;255/2007;153/2010 Applications to the Commission under

section 34(1) of Act 38 When considering whether to approve a needs identification document under

section 34(3) of the Act, the Commission must (

a) have regard for the principle that it is in the public int erest to foster

Section 38 AR 86/2007 TRANSMISSION REGULATION 48 (

i) an efficient and competitive electricity market, (ii) a transmission system that is flexible, reliable and efficient and preserves options for future growth, and (iii) geographic separation fo r the purposes of ensuring reliability of the transmission system and efficient use of land, including the use of rights of way, corridors or other routes that already contain or provide for utility or energy infrastructure or the use of new rights of way, corridors or other routes, notwithstanding that geographic separation for the purposes of ensuring reliability of the transmission system or efficient use of land may result in additional costs, (

b) have regard for the following matters when it considers an application for a transmission facility upgrade or expansion, or operations preparatory to the construction of a transmission facility, namely, the contribution of the proposed transmission facility: (

i) to improving transmission system reliability; (ii) to a robust, competitive electricity market; (iii) to improvements in trans mission system efficiency; (iv) to improvements in operational flexibility; (

v) to maintaining options for long term development of the transmission system; (vi) to a project to which

section 27 applies to provide system access service, (

c) take into account the trans mission system plan filed with the Commission, (

d) take into account the ISO’s responsibilities under any enactment, and (

e) consider the ISO’s assessment of the need to be correct unless an interested person satisfies the Commission that (

i) the ISO’s assessment of the need is technically deficient, or (ii) to approve the needs id entification document would not be in the public interest. AR 86/2007 s38;255/2007;153/2010;114/2018;136/2019

Section 38.1 AR 86/2007 TRANSMISSION REGULATION 49 Applications to the Commission in respect of critical transmission infrastructure 38.1 In addition to its duties under sections 17 and 33(1) of the Act, the ISO must, at the time a TFO or other person makes an application for Commission approval under the Hydro and Electric Energy Act in respect of critical transmission infrastructure, (

a) provide the Commission with transmission substation and line configurations in respect of that critical transmission infrastructure in no less detail than the ISO would provide in a needs identification document if such a document had been required for the critical transmission infrastructure, and (

b) certify to the Commission as to whether the technical aspects of the application by the TFO or other person meet the requirements set out by the ISO in the transmission system plan in respect of that critical transmission infrastructure. AR 153/2010 s24 Recovery of pre-construction costs 39 If an application under

section 37 has been approved by the Commission under that section, if a needs identification document has been approved by the Commission under

section 34 of the Act or if a direction has been given by the ISO under

section 41.3 of the Act, a TFO may include in its tariff pre-construction costs, including (

a) feasibility studies, (

b) engineering, (

c) purchase of equipment and materials, and (

d) purchase of land or options to purchase land for future us e or acquire a right or interest in land for future use as a right of way, as may be necessary, for long lead-time projects. AR 86/2007 s39;255/2007;153/2010 Recovery of assistance costs 40(1) A TFO may include in its transmission tariff (

a) costs and expenses incurred by the owner in assisting the ISO in preparing forecasts, the transmission system plan, needs identification documents and updates to any or all of them, and

Section 41 AR 86/2007 TRANSMISSION REGULATION 50 (

b) the costs incurred by the owner to assist the Market Surveillance Administrator in preparing reports made under

section 23(2).

(2) A DFO may include in its distribution tariff (

a) costs and expenses incurred by the owner in assisting the ISO in preparing forecasts, the transmission system plan, needs identification documents and updates to any or all of them, (

b) the cost of evaluating the relative merits of transmission facility and distribution options, and (

c) the costs incurred by the owner to assist the Market Surveillance Administrator in preparing reports made under

section 23(2). AR 86/2007 s40;153/2010 Recovery of other secondary costs 41(1) A TFO or DFO may include in its tariff any one or more of the following, as applicable: (

a) costs or expenses incurred as a consequence of a direction given by the ISO under this Regulation or any other enactment; (

b) costs and expenses (

i) of a maintenance upgr ade, enhancement or other modification to a transmission facility proposed under (

A) a rule referred to in

section 11.1, if the maintenance upgrade, enhancement or other modification improves the efficiency or operation of the transmission facility but does not materially affect transmission facility capability, or (B)

section 11(6) as it read at any time before March 31, 2015, (ii) incurred in implementing an expansion or enhancement to the transmission system access service interconnection or a transmission facility project referred to in (

A) section 11.2, or

Section 42 AR 86/2007 TRANSMISSION REGULATION 51 (

B) section 12 as it read at any time before September 22, 2014, (iii) incurred in order to im plement the standards and rules under

section 5, or (iv) incurred in order to implement the reliability standards.

(2) In addition to its duties under

section 17 of the Act, the ISO may do either or both of the following: (

a) certify to the Commission that a cost was incurred under subsection (1); (

b) notify the Commission of any concern the ISO has with respect to a cost referred to in subsection (1), but the Commission must not require the ISO to make any statement with respect to the prudence of a TFO or a DFO in incurring a cost under subsection (1). AR 86/2007 s41;255/2007;175/2014;114/2018;34/2024 Additional criteria for the Commission for TFO tariffs 42 In addition to the matters taken into account by the Commission under

section 122 of the Act, when considering an application for approval of a TFO tariff, the Commission must consider that it is also in the public interest to provide consumers the benefit of unconstrained transmission access to the competitive electricity market (

a) by providing sufficient investment to ensure the timely upgrade, enhancement or expansion of transmission facilities, and (

b) by fostering a stable inves tment climate and a continued stream of capital investment for the transmission system. AR 86/2007 s42;255/2007;114/2018;136/2019 Decisions under s34(3) of Act 43(1) The Commission shall make a decision under

section 34(3) of the Act as to whether to approve a needs identification document in a timely manner and, if possible, within a period of 180 days after receipt of the complete needs identification document.

(2) If the Commission cannot make a decision within the 180-day period referred to in subsection (1), the Commission shall (

a) before the 180-day period expires

Section 44 AR 86/2007 TRANSMISSION REGULATION 52 (

i) notify the ISO of the reasons why it has not made or will not be able to make a decision, (ii) state its best estimate as to when it reasonably expects to make a decision, and (iii) make the reasons and estimate public, a n d (

b) make its decision within 90 days after the expiry of the 180-day period. AR 86/2007 s43;255/2007 Commission rules about transmission facilities 44 The Commission must ensure that any rules made by it under

section 129(1) of the Act respecting transmission facilities are consistent with the standards and rules under

section 5. AR 86/2007 s44;255/2007 45 Repealed AR 255/2007 s20. Prudence of activities and costs 46(1) The Commission must consider that the ISO’s own administrative costs that have been approved by the ISO members are prudent unless an interested person satisfies the Commission that those costs or expenses are not prudent.

(2) The Commission must consider that payments that are included in a TFO’s tariff made by a TFO to an owner or occupant of land pursuant to any agreement between the TFO and the owner or occupant that (

a) grants the TFO the right of entry in respect of the surfac e of the land, or (

b) provides for compensation resulting from or related to the use of the land for the purposes of locating transmission facilities on it, are prudent unless an interested person satisfies the Commission that the payments are not prudent. AR 86/2007 s46;255/2007;145/2013;175/2014 ISO tariff — transmission system considerations 47(1) When considering an application for approval of the ISO tariff under sections 121 and 122 of the Act, the Commission must ensure that

Section 48 AR 86/2007 TRANSMISSION REGULATION 53 (

a) the just and reasonable cos ts of the transmission system, excluding ancillary services, are wholly charged, to the extent required by the ISO tariff, to (

i) D F O s , (ii) customers who operate industrial systems, (iii) persons who have ma de an arrangement under

section 101(2) of the Act, and (iv) exporters, (

b) each DFO can recover its allo cated costs through its own tariff, (

c) the ISO tariff includes provisions that require owners of generating units and energy storage resources to pay (

i) local interconnection costs, (ii) transmission reinforcement payments, and (iii) transmission line losses, a n d (

d) all just and reasonable co sts related to arrangements or agreements under

section 9(5) of the Act are provided for in the ISO tariff.

(2) For the purposes of subsection (1)(a), the ISO must ensure that amounts payable under

section 29.1 are used only to offset the portion of the ISO’s transmission revenue requirement that relates to transmission facilities, and not any portion that relates to ancillary services. AR 86/2007 s47;168/2025 ISO tariff - approval of ISO’s costs 48(1) A reference in the Act to “prudent” or “appropriate” in relation to the ISO’s costs for the provision of ancillary services and costs of transmission line losses means the amounts of those costs that have been approved by the ISO members.

Section 48.1 AR 86/2007 TRANSMISSION REGULATION 54

(2) When considering the ISO’s own administrative costs under

section 46 and the ISO’s costs for the provision of ancillary services, the Commission must allocate to customer classes those amounts that are set out in the ISO’s application to the Commission for approval of the ISO tariff.

(3) Nothing in this

section prevents the ISO from recovering any or all of the costs referred to in subsection (2) through ISO fees, the ISO tariff or a combination of both, in accordance with the Act. AR 86/2007 s48;255/2007;168/2025 Recovery of ancillary services costs 48.1(1) The ISO must recover the costs of arranging for the provision of ancillary services in a manner that reflects the extent to which each electricity market participant or class of participant contributes to the need for those services.

(2) For the purposes of subsection (1), the ISO may determine the share of ancillary services costs to be recovered from each electricity market participant or class of participant.

(3) The ISO must ensure that the methodology for determining the shares of ancillary services costs is transparent and aligns with the requirements set out in the ISO tariff or ISO rules.

(4) Nothing in this

section limits the ISO’s authority under

section 30(4) of the Act to recover ancillary services costs through the ISO tariff, ISO fees or a combination of both.

(5) This

section does not apply until the date on which an ISO tariff that includes the cost recovery under subsection (1) comes into effect following approval by the Commission. AR 168/2025 s15

Part 8 Time Period Extension, Paramountcy, Recovery of Must-run Costs, Transition, Repeal and Expiry Extension and effect of time periods 49(1) The Minister may, by order, extend any date or time period specified in this Regulation whether or not that date has passed or that time period has expired.

(2) The authority of the ISO under this Regulation continues even if a date or time period prescribed for taking an action has passed or expired.

Section 50 AR 86/2007 TRANSMISSION REGULATION 55

(3) The ISO may amend, repeal or replace a rule, standard, practice, policy, procedure, criteria or process relating to this Regulation, whether or not the date or time period, or the extended date or time period, for enacting or establishing the rule, standard, practice, policy, procedure, criteria or process has passed or expired.

AR 86/2007 s49;114/2018 Paramountcy 50 This Regulation prevails to the extent of any inconsistency, conflict or uncertainty between this Regulation and any agreement relating to reliability standards, irrespective of whether the agreement is entered into before or after the coming into force of this Regulation. 51 Repealed AR 168/2025 s16. Transition 52(1) This Regulation does not apply to an application for approval of a needs identification document under

section 34 of the Act or to an application for an approval, permit or licence under

Part 2 of the Hydro and Electric Energy Act in respect of a transmission facility or part of a transmission facility if that application was considered complete by the Commission before the coming into force of this Regulation.

(2) Where this Regulation does not apply to an application referred to in subsection (1) as a result of the operation of subsection (1), the Transmission Regulation (AR 174/2004) as it existed immediately before the coming into force of this Regulation continues to apply to that application as if that Regulation had not been repealed. AR 86/2007 s52;255/2007 Repeal of AR 174/2004 53 Subject to

section 52, the Transmission Regulation (AR 174/2004) is repealed. AR 86/2007 s53;121/2007 Expiry 54 For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on December 31, 2033. AR 86/2007 s54;255/2007;7/2018;229/2021;34/2024;168/2025

Schedule AR 86/2007 TRANSMISSION REGULATION 56

Schedule Table 1 Alberta-British Columbia Intertie WECC Path Transmission Line Alberta Endpoint External Endpoint Metered End Voltage Level Path 1 1201L Bennett 520S Cranbrook (British Columbia) Bennett 520S 500 kV 887L Pocaterra 48S Natal (British Columbia) Pocaterra 48S 138 kV 786L Coleman 799S Natal (British Columbia) Natal 138 kV Table 2 Alberta-Saskatchewan Intertie WECC Path Transmission Line Alberta Endpoint External Endpoint Metered End Voltage Level Path 2 n/a McNeill 840S (HVDC B2B Converter Station) n/a McNeill 840S 138 kV Table 3 Montana-Alberta Tie Line (MATL) WECC Path Transmission Line Alberta Endpoint External Endpoint Metered End Voltage Level Path 83 941L (MATL) Picture Butte 120S Great Falls (Montana) Picture Butte 120S 230 kV AR 168/2025 s18;59/2026

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