The Lieutenant Governor in Council

(a) orders the Alberta Utilities Commission

(i) to inquire into and report to the Minister of Energy on Hydro Electric Power Generation Development, in accordance with the terms of reference in the attached Schedule A,

(ii) to inquire into and report to the Minister of Energy on the Alberta Smart Grid, in accordance with the terms of reference in the attached Schedule B, and

(iii) to inquire into and report to the Minister of Energy on the harmonization of the Regulated Rate Option Regulation and the Default Gas Supply Regulation, in accordance with the terms of reference in the attached Schedule C,

and

(b) determines that the Alberta Utilities Commission has the same power with respect to ordering by whom and to whom its costs and other costs of, or incidental to, any of the inquiries described in clause (a) are to be paid as the Commission has with respect to its hearings and other proceedings.

For Information only

Recommended by: Minister of Energy

Authority: Alberta Utilities Commission Act
(section 8)

SCHEDULE A

Terms of Reference for an inquiry into and report to the Minister

of Energy on Hydro Electric Power Generation Development

WHEREAS the Provincial Energy Strategy has identified the potential for development of hydro electric power as a clean source of energy;

WHEREAS the approval process for hydro electric power generation projects is complex and not well understood;

WHEREAS it is in the public interest to have an effective and efficient regulatory approval process that considers the interests of all Alberta stakeholders;

WHEREAS Alberta has a key objective in The Way Forward in ensuring that our province's industries are competitive and continue to attract investment to provide jobs and prosperity;

WHEREAS a hydro electric power generation run of the river project has recently been approved near Dunvegan, and this project provides an opportunity to review and learn what measures worked well and what improvements could be considered;

THEREFORE the following terms of reference apply in respect of the inquiry into and report to the Minister of Energy on Hydro Electric Power Generation Development:

(a) the Alberta Utilities Commission (AUC) shall inquire into the following matters for the purpose of gathering information with respect to the regulatory approval process for hydro electric power generation development:

(i) identify all applicable legislation including source and authority;

(ii) to the extent possible, identify all stakeholders;

(iii) identify and chart the current regulatory process and associated functional requirements including required minimum consultation and studies;

(iv) identify overlaps, barriers, conflicts, or other impediments of regulatory approval requirements;

(v) identify opportunities for improvement;

(vi) if applicable, identify regulatory approval process differences for traditional large scale, run of river, or upgrading existing hydroelectric power generation development;

(vii) identify additional regulatory issues that may be encountered when considering projects which may impact neighbours such as Saskatchewan, British Columbia, Northwest Territories;

(b) in conducting the inquiry the AUC shall hear from interested stakeholders;

(d) the AUC’s report

(i) must not make recommendations but shall, through its analysis of the evidence on the record of the inquiry and review, provide findings and pros and cons on various issues as it deems appropriate, and

(ii) is expected to be submitted to the Minister within 9 months of the date on which the Order in Council to which this Schedule is attached and was made, and must be submitted no later than February 28, 2011.

SCHEDULE B

Terms of Reference for an inquiry into and report

to the Minister of Energy on the Alberta Smart Grid

WHEREAS it is the policy of the Government of Alberta to strengthen and modernize Alberta’s interconnected electric system to support its goals of clean energy production, wise energy use and sustained economic prosperity;

WHEREAS the Government of Alberta is interested in implementing policies supporting the development and deployment of smart grid technology in support of achieving these goals;

WHEREAS the smart grid can be characterized as the modernization of Alberta’s electricity system, through the application of advanced control and information technology, to meet the future needs of the province, and the characteristics of the smart grid include, but are not limited to:

1 Inclusivity: the smart grid applies to the entire electricity system including generation, transmission, distribution, and consumers;

2 Reliability: The smart grid provides enhanced ability to warn of and identify potential failures and take remedial action before users are affected, that is, the smart grid self-heals;

3 Security: The smart grid withstands cyber attacks;

4 Environmentally Friendly: The smart grid reduces the environmental impact of the Alberta electricity system through the application of advanced technology that will provide for the integration of more renewable generation, more effective load management, and better information for consumers;

5 Accessibility: Electricity market participants must have access to all necessary information to make informed choices;

WHEREAS in order to permit the Government of Alberta to consider a full range of options on all issues relating to the smart grid, it is desirable that a smart grid review be conducted by the Alberta Utilities Commission (AUC);

THEREFORE the following terms of reference apply in respect of the inquiry into and report to the Minister of Energy on the Alberta Smart Grid:

(a) the AUC shall inquire into the following matters for the purpose of gathering information with respect to those matters:

(i) the current status of smart grid development in Alberta;

(ii) the status of smart grid deployment in other jurisdictions;

(iii) the guiding principles, objectives and goals for developing the smart grid in Alberta;

(iv) the enablers and barriers to the deployment and development of the smart grid;

(v) the functionality requirements for the smart grid in Alberta, including standards such as those required for the interoperability in the exchange of information;

(vi) the method of assessing costs and benefits of smart grid-related expenditures;

(vii) the necessary courses of action to develop and implement the smart grid, including defining the roles for all the potential market participants;

(viii) the regulatory approach to consider smart grid investments including the extent to which competitive markets can be relied upon to deliver the smart grid;

(ix) other associated issues as required;

(b) in conducting the inquiry the AUC must consult with members of the Alberta electricity industry and other relevant parties;

(d) the AUC’s report

(ii) is expected to be submitted to the Minister within 8 months of the date on which the Order in Council to which this Schedule is attached was made, and must be submitted no later than January 31, 2011.

SCHEDULE C

Terms of Reference for an inquiry into and report to the

Minister of Energy on the harmonization of the Regulated

Rate Option Regulation and Default Gas Supply Regulation

WHEREAS the Alberta Department of Energy (ADOE) wishes to harmonize the Regulated Rate Option Regulation, AR 262/2005 (RRO Regulation) and Default Gas Supply Regulation, AR 184/2003 (DGS Regulation), using the following Principles as discussed in the “Electricity and Natural Gas Retail Market Harmonization Principles” Discussion Paper of 2006 (not ranked in order of importance):

1 The Consistency Principle: The rules for both electricity and natural gas will be consistent, unless differences in the characteristics of the physical commodities or their markets make it unreasonable;

2 The Accessibility Principle: The structure and the language of the regulations will be simple and accessible without compromising the effectiveness of the rules;

3 The Predictability Principle: The rules will offer regulatory certainty and predictability to market participants;

4 The FEOC Principle: The framework will support the fair, efficient and openly competitive (FEOC) operation of the retail market for electricity and natural gas;

5 The Customer Choice Principle: Customers will be able to make informed choices about products and retail service providers, and the transactions necessary for customers exercising their choice will be as efficient as possible;

WHEREAS the ADOE wishes to obtain information that would assist in the harmonization described above:

THEREFORE the following terms of reference apply in respect of the inquiry into and report to the Minister of Energy on the harmonization of the Regulated Rate Option Regulation and Default Gas Supply Regulation:

(a) the Alberta Utilities Commission (AUC) shall inquire into the following matters for the purpose of gathering information with respect to those matters:

(i) the harmonization of the RRO Regulation with the DGS Regulation in accordance with the harmonization principles outlined in the preamble;

(ii) the availability of common approaches and appropriate consumption thresholds for determining customer eligibility criteria for the regulated rate for both natural gas and electricity;

(iii) the availability of similar approaches for energy price setting plans (EPSPs) for both natural gas and electricity that build on sections 6(2) and 11(1) of the RRO Regulation;

(iv) the appropriate transparency of the EPSPs;

(v) the appropriate areas of consistency between respective EPSPs of each Regulated Rate Option (RRO) Provider and Default Supply Provider;

(b) proceedings of the AUC related to the inquiry must be conducted in public;

(d) the AUC’s report

(i) must not make recommendations but shall, through its analysis of the evidence on the record of the inquiry, provide findings and pros and cons on various issues as it deems appropriate, and

(ii) must be submitted to the Minister of Energy no later than one year from the date on which the Order in Council to which this Schedule is attached was made.