Electricity is sent from the generating plants over high-voltage transmission lines to substations that use transformers to reduce voltage levels. Regulated rates for transmission are set by the Alberta Utilities Commission (AUC) and are managed by the Alberta Electric System Operator (AESO).
The AUC approves the construction and operation of all transmission facilities in Alberta. They also establish Regulated Transmission Rates. The AESO administers the rates and oversees the transmission system to ensure equal access for all market participants. Distribution companies then pass on (flow through) transmission charges to retailers in their service area. Transmission charges are based on rates approved by the AUC, and on each consumer’s individual energy usage. Retailers, in turn, pass these transmission charges on to the consumer as part of their monthly consumption charge.
The need for new transmission lines has normally been analyzed by Alberta’s Electric System Operator (AESO), and reviewed in public hearings before the AUC. The Government of Alberta has recently changed the electric industry legislation, allowing cabinet to mandate the construction of critical transmission infrastructure. This change has proven controversial.
Alberta has built very little transmission in the past 20 years. The need for substantial system reinforcement is widely recognized, however, the size, timing and technology of these transmission additions is unprecedented and has caused some degree of division among the province’s users.
Since all costs associated with the bulk transmission system are paid by customers and no bulk transmissions system costs are paid by generators, the removal of the public needs assessment process, and its replacement by a closed-door cabinet decision making process, has resulted in opposition by those who feel the decision making process should invoke end users.
Conversely, proponents of the new system maintain that expanding transmission capacity will facilitate green power development, increase generator competition, and open up new internal and external supply options for customers within and outside of Alberta.
