Irrigation Canal Power Co-op Ltd. - AUC · 2018. 2. 23. · Irrigation Canal Power Co-op Ltd. Preferential Sharing of Records Between Irrigation Canal Power Co-op Ltd., URICA Energy

Decision 21901-D01-2016

Irrigation Canal Power Co-op Ltd. Preferential Sharing of Records Between Irrigation Canal Power Co-op Ltd., URICA Energy Real Time Ltd., and URICA Asset Optimization Ltd. September 30, 2016

Alberta Utilities Commission

Decision 21901-D01-2016

Irrigation Canal Power Co-op Ltd.

Preferential Sharing of Records Between Irrigation Canal Power Co-op Ltd.,

URICA Energy Real Time Ltd., and URICA Asset Optimization Ltd.

Proceeding 21901

Application 21901-A001

September 30, 2016

Published by the:


Fifth Avenue Place, Fourth Floor, 425 First Street S.W.

Calgary, Alberta

T2P 3L8

Telephone: 403-592-8845

Fax: 403-592-4406

Website: www.auc.ab.ca

Decision 21901-D01-2016 (September 30, 2016) • i

Contents

1 Decision summary ................................................................................................................. 1

2 Introduction and background .............................................................................................. 1

3 Relevant statutory and regulatory provisions .................................................................... 2

4 Discussion and findings ........................................................................................................ 4 4.1 Fair, efficient and openly competitive operation of the market ..................................... 4

4.2 Reasonably necessary..................................................................................................... 6

4.3 Terms and conditions ..................................................................................................... 7

5 Decision .................................................................................................................................. 8

Appendix 1 – Abbreviations ......................................................................................................... 9

Decision 21901-D01-2016 (September 30, 2016) • 1


Calgary, Alberta

1 Decision summary

1. In this decision, the Alberta Utilities Commission must decide, in accordance with

Section 3 of the Fair, Efficient and Open Competition Regulation , whether Irrigation Canal

Power Co-op Ltd. (IRRICAN) may preferentially share records that are not available to the

public with URICA Energy Real Time Ltd. (URICA Real Time), and URICA Asset

Optimization Ltd. (URICA Asset Optimization). For the reasons set out below, the Commission

has decided to grant the application for the sharing of records. In the Commission’s view,

IRRICAN has established that the shared records will not be used for any purpose that will not

support the fair, efficient, and openly competitive operation of the electricity market, and that the

sharing of records is reasonably necessary for IRRICAN to carry out its business.

2 Introduction and background

2. On August 11, 2016, IRRICAN filed an application1 with the AUC pursuant to Section 3

of the Fair, Efficient and Open Competition Regulation. The application sought an order from

the Commission permitting the sharing of records between IRRICAN, URICA Real Time, and

URICA Asset Optimization, which are not available to the public, relating to IRRICAN’s power

generation facilities.

3. On August 17, 2016, the Commission issued notice of the application made by

IRRICAN, in which it advised that the parties granted standing in the proceeding were limited to

IRRICAN and the Market Surveillance Administrator (MSA) in accordance with Section 3(5) of

the Fair, Efficient and Open Competition Regulation. The notice of application established a

process and schedule for the MSA to determine whether it would intervene in the proceeding and

to advise the Commission whether it required an evidentiary process.2

4. On August 18, 2016, the MSA filed a statement of intent to participate in the proceeding,

and advised that it supported the application. The MSA added that it did not require an

evidentiary process involving information requests and the filing of evidence.3

5. In its application, IRRICAN submitted that the information sharing would be with respect

to IRRICAN’s power generation facilities that have an aggregate capacity of 43 megawatts

1 Application 21901-A001.

2 Exhibit 21901-X0012, Notice of Application, August 17, 2016.

3 Exhibit 21901-X0014, MSA Statement of Intent to Participate, August 18, 2016.

Irrigation Canal Power Co-op Ltd.

Preferential Sharing of Records Between Irrigation Canal

Power Co-op Ltd., URICA Energy Real Time Ltd., and

URICA Asset Optimization Ltd.

Decision 21901-D01-2016

Proceeding 21901

Application 21901-A001

Preferential Sharing of Records Between Irrigation Canal Power Co-op Ltd., URICA Energy Real Time Ltd., and URICA Asset Optimization Ltd. Irrigation Canal Power Co-op Ltd.

2 • Decision 21901-D01-2016 (September 30, 2016)

(MW). These three units are Chin Chute (15 MW), IRRICAN Hydro Drops 4, 5, and 6 (7 MW),

and Raymond Reservoir (21 MW).4

6. URICA Real Time provides a 24-hour real time dispatch desk service to clients for

operational energy market services, ancillary services,5 dispatch down services and energy

restatements for events at generators as required by Independent System Operator rules.

URICA Asset Optimization is an organization that works with clients in establishing and

optimizing offer strategies. 6

7. On February 26, 2016, IRRICAN filed an application with the AUC pursuant to Section 3

of the Fair, Efficient and Open Competition Regulation seeking an order permitting the sharing

of records not available to the public between IRRICAN and URICA Real Time relating to

IRRICAN’s power generation facilities mentioned above in paragraph five. This application was

considered by the AUC in Proceeding 21371.

8. On April 1, 2016, the Commission, in Decision 21371-D01-2016, ordered that, pursuant

to the provisions of Section 3 of the Fair, Efficient and Open Competition Regulation, IRRICAN

be permitted to share records referred to in Section 3(1) of the Fair, Efficient and Open

Competition Regulation with URICA Real Time from April 1, 2016 until the earlier of June 1,

2029 or the termination of the commercial agreement between IRRICAN and URICA Real

Time.

9. In its August 11, 2016 application, IRRICAN sought an order from the Commission

permitting the sharing of non-public records between IRRICAN, URICA Real Time, and

URICA Asset Optimization, relating to IRRICAN’s power generation facilities. IRRICAN also

requested that the Commission rescind and replace Decision 21371-D01-2016 effective the same

day as the issue of its new order as requested in Application 21901-A001.7

10. In reaching the determinations contained within this decision, the Commission has

considered all relevant materials comprising the record of this proceeding. Accordingly,

references in this decision to specific parts of the record are intended to assist the reader in

understanding the Commission’s reasoning relating to a particular matter and should not be taken

as an indication that the Commission did not consider all relevant portions of the record with

respect to that matter.

3 Relevant statutory and regulatory provisions

11. The relevant statutory provisions respecting the sharing by market participants of records

that are not available to the public are found in the Fair, Efficient and Open Competition

Regulation, the Alberta Utilities Commission Act, and the Electric Utilities Act, under which that

regulation was enacted.

4 Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 3.

5 As defined by the Alberta Electric System Operator (AESO), ancillary services are services that are required to

ensure that electricity can be transmitted reliably, efficiently, and securely across Alberta’s interconnected

transmission system. Ancillary services include operating reserve, transmission must run, black start services,

and load shed scheme services. Operating reserves consist of regulating reserves, spinning reserves and

supplemental reserves, all products that the AESO’s system controller utilizes to ensure that the supply-demand

of electricity in Alberta is balanced seamlessly in real-time operations. 6 Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 2.

7 Ibid., page 12.



12. Section 5 of the Electric Utilities Act lists some of its purposes as follows:

…

(b) to provide for a competitive power pool so that an efficient market for electricity

based on fair and open competition can develop, where all persons wishing to

exchange electric energy through the power pool may do so on non-discriminatory

terms …;

(c) to provide for rules so that an efficient market for electricity based on fair and open

competition can develop in which neither the market nor the structure of the Alberta

electric industry is distorted by unfair advantages of government-owned participants

or any other participant;

…

(e) to enable customers to choose from a range of services in the Alberta electric

industry, including a flow-through of pool price and other options developed by a

competitive market, and to receive satisfactory service;

…

(h) to provide for a framework so that the Alberta electric industry can, where necessary,

be effectively regulated in a manner that minimizes the cost of regulation and

provides incentives for efficiency.

13. The Electric Utilities Act further states in Section 6 that “[m]arket participants are to

conduct themselves in a manner that supports the fair, efficient and openly competitive operation

of the market.”

14. Section 3(1) of the Fair, Efficient and Open Competition Regulation establishes that a

market participant shall not share records that are not available to the public relating to any past,

current or future price and quantity offer made to the power pool or for the provision of ancillary

services. Section 3(2) of the Fair, Efficient and Open Competition Regulation establishes

instances where records that are not available to the public may be shared. Section 3(3) of the

Fair, Efficient and Open Competition Regulation allows the Commission to issue an order

permitting the sharing of records, stating:

(3) The Commission may, on application by a market participant that is otherwise

prohibited from sharing records referred to under subsection (1), issue an order

permitting the sharing of those records on any terms and conditions the Commission

considers appropriate where the market participant establishes that

(a) the records will not be used for any purpose that does not support the fair, efficient

and openly competitive operation of the electricity market, including the conduct

referred to in section 2, and

(b) the sharing of the records is reasonably necessary for the market participant to carry

out its business.



15. Section 2 of the Fair, Efficient and Open Competition Regulation identifies conduct by a

market participant that does not support the fair, efficient and openly competitive operation of

the market. Relevant to the sharing of records, prohibited conduct would include:

…

(h) restricting or preventing competition, a competitive response or market entry by

another person, including

(i) a market participant directly or indirectly colluding, conspiring, combining,

agreeing or arranging with another market participant to restrict or prevent

competition, …

…

(j) manipulating market prices, including any price index, away from a competitive

market outcome;

4 Discussion and findings

4.1 Fair, efficient and openly competitive operation of the market

16. IRRICAN submitted that the total market share offer control represented by the

Generation Assets is 0.3 per cent of the energy market and 4.1 per cent of the ancillary services

market,8 and that IRRICAN does not have any affiliates that are market participants.9 IRRICAN

further submitted that URICA Real Time has an offer control of 0.7 per cent of the energy

market and 13.4 per cent of the ancillary services market,10 and that URICA Asset Optimization

has no calculated offer control in the energy market or the ancillary services market.11

17. A senior officer of IRRICAN provided a written representation indicating that any

preferential records shared between IRRICAN, URICA Real Time, and URICA Asset

Optimization would not be used for any purpose that does not support the fair, efficient and

openly competitive operation of the Alberta electricity market. The representation also stated that

IRRICAN has in place a Code of Conduct that all employees, officers, and its affiliates must read

and comply with, and submitted that this Code of Conduct is in alignment with and complies

with the Fair, Efficient and Open Competition Regulation.12

18. IRRICAN filed a similar representation from senior officers at URICA Real Time and

URICA Asset Optimization to confirm that any preferential records that URICA Real Time and

URICA Asset Optimization receives will not be used by URICA Real Time or URICA Asset

Optimization for any purpose that does not support the fair, efficient and openly competitive

operation of the electricity market, including the conduct referred to in Section 2 of the

Fair, Efficient and Open Competition Regulation. The representation also stated that URICA

Real Time and URICA Asset Optimization currently have a formal compliance program

regarding the conduct of their employees and the confidentiality of information, and that all

employees, officers, and affiliates must read and comply with, and that all officers and

employees of URICA Real Time and URICA Asset Optimization must submit signed

8 Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 6.

9 Ibid., page 1.

10 Ibid., page 7.

11 Ibid.

12 Exhibit 21901-X0002, IRRICAN preferential sharing of records letter dated July 26, 2016.



acknowledgements that they will comply with the compliance plan and the Fair, Efficient and

Open Competition Regulation.13

19. Information on various aspects of URICA’s internal compliance program was outlined as

follows:

(a) an information confidentiality policy14 that states that URICA Energy Management

Corporation, URICA Real Time, URICA Asset Optimization, and any subsidiaries are

committed to keeping client information private and confidential, and that URICA

identifies the confidentiality of client information as the backbone of its business model

to maintain impartial treatment of each URICA Real Time and URICA Asset

Optimization client15

(b) a Fair, Efficient and Open Competition Regulation Compliance Plan that lists those

responsible for compliance at URICA Real Time and URICA Asset Optimization, and

outlines a code of conduct that specifies that URICA Real Time and URICA Asset

Optimization will comply with all the provisions and requirements of the Fair, Efficient

and Open Competition Regulation16

(c) compliance reporting at URICA Real Time and URICA Asset Optimization that is

voluntarily reported to the presidents of URICA Real Time, URICA Asset Optimization,

and URICA Energy Management Corporation regularly as required, along with voluntary

self-reporting to the MSA on all compliance issues and any internal investigations on

potential issues of compliance 17

(d) that there will be no communication of price, quantity or outage information from

URICA Real Time to URICA Asset Optimization, and that URICA Real Time and

URICA Asset Optimization have separate staff, separate systems access, and separate

office locations18

Commission findings

20. In determining whether the records shared will not be used for any purpose that does not

support the fair, efficient and openly competitive operation of the electricity market, the

Commission has considered the following:

(a) The formal program for internal compliance at URICA Real Time and URICA Asset

Optimization, and the commitment of URICA Real Time and URICA Asset Optimization

to comply with all provisions and requirements of the Fair, Efficient and Open

Competition Regulation.

(b) The controls over client confidentiality at URICA Real Time and URICA Asset

Optimization, along with the assurances from URICA Real Time and URICA Asset

Optimization that there will be impartial treatment of each client.

13

Exhibit 21901-X0001, URICA preferential sharing of records letter dated August 4, 2016, page 1. 14

Exhibit 21901-X0003, URICA confidentiality policy dated June 27, 2016. 15

Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 9. 16

Exhibit 21901-X0005, URICA FEOC compliance plan dated August 4, 2016, pages 4-5. 17

Ibid., page 8. 18

Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 2.



(c) The segregation of offer strategy setting and real-time offers between URICA Asset

Optimization and URICA Real Time, along with the assurance that there will be no

communication of price, quantity or outage information from URICA Real Time to

URICA Asset Optimization.

(d) The size of the Generation Assets as well as the degree of offer control that IRRICAN,

URICA Real Time, and URICA Asset Optimization have in the Alberta energy and

operating reserve markets.

(e) The representations from IRRICAN, URICA Real Time, and URICA Asset Optimization

that the preferential records in respect of the Generation Assets will not be used for any

purpose that does not support the fair, efficient and openly competitive operation of the

market.

21. The Commission accepts and will rely on the representations of URICA Real Time and

URICA Asset Optimization regarding their programs and existing plans for internal compliance

to manage confidential information as contemplated by the Fair, Efficient and Open Competition

Regulation. The Commission finds that these measures provide sufficient assurance that the

records shared between IRRICAN, URICA Real Time, and URICA Asset Optimization will not

be used for any purpose that does not support the fair, efficient and openly competitive operation

of the electricity market, including conduct referred to in Section 2 of the Fair, Efficient and

Open Competition Regulation.

22. Based on the statements and representations of the parties, the Commission finds that

IRRICAN has demonstrated that it has taken sufficient measures to ensure that the preferential

records are not likely to be used for any purpose that does not support the fair, efficient and

openly competitive operation of the Alberta electricity market.

4.2 Reasonably necessary

23. IRRICAN indicated that it does not have the personnel or resources to monitor facility

operations on a 24-hour basis in order to optimize its generation assets.19

24. IRRICAN has entered into commercial arrangements with URICA Real Time and

URICA Asset Optimization, which among other things, appointed URICA Real Time and

URICA Asset Optimization as IRRICAN’s agent to provide a dispatch service and consider

different offer strategies for IRRICAN. These arrangements will make it necessary for

IRRICAN, URICA Real Time, and URICA Asset Optimization to share with each other certain

records that may not otherwise be available to the public.

25. IRRICAN submitted that the sharing of preferential records described in the application

is reasonably necessary for IRRICAN to carry out its business.20

Commission findings

26. The Commission accepts the statements of IRRICAN regarding the nature of the records

that will be shared and the purpose for sharing the records. The Commission accepts and will

19

Exhibit 21901-X0002, IRRICAN preferential sharing of records letter dated July 26, 2016. 20

Ibid.



rely upon the representation provided by a senior officer of IRRICAN that the proposed sharing

of information is reasonably necessary for IRRICAN to carry out its business.

27. For the above reasons, the Commission finds that IRRICAN has established that the

sharing of the records as described in the application is reasonably necessary for IRRICAN to

carry out its business.

4.3 Terms and conditions

28. Section 3(3) of the Fair, Efficient and Open Competition Regulation authorizes the

Commission to issue an order permitting the sharing of records on any terms and conditions that

the Commission considers appropriate.

29. IRRICAN submitted that the term for the requested order is from September 30, 2016 to

June 1, 2029,21 also requesting that the Commission rescind and replace

Decision 21371-D01-2016, effective the same day as the issue of its new order as requested in

Application 21901-A001.22

Commission findings

30. The issuance of an order permitting the sharing of records not available to the public

pursuant to Section 3 of the Fair, Efficient and Open Competition Regulation is governed by

Section 3(3) of the Fair, Efficient and Open Competition Regulation, which reads as follows:

Preferential sharing of records that are not available to the public

3(3) The Commission may, on application by a market participant that is otherwise

prohibited from sharing records referred to under subsection (1), issue an order

permitting the sharing of those records on any terms and conditions the Commission

considers appropriate where the market participant establishes that

(a) the records will not be used for any purpose that does not support the

fair, efficient and openly competitive operation of the electricity market,

including the conduct referred to in section 2, and

(b) the sharing of the records is reasonably necessary for the market participant to

carry out its business.

31. Accordingly, the following terms and conditions apply to the orders, which grant

permission for IRRICAN to share records not available to the public with URICA Real Time and

URICA Asset Optimization, as referred to in Section 3(1) of the Fair, Efficient and Open

Competition Regulation:

a) The orders only apply to the sharing of information between Irrigation Canal Power Co-

op Ltd., URICA Energy Real Time Ltd., and URICA Asset Optimization Ltd. relating to

price, quantity, and availability information for the 15 MW Chin Chute hydroelectric

plant, the 7 MW IRRICAN Hydro Drops 4, 5, and 6 hydroelectric plant, and the 21 MW

Raymond Reservoir hydroelectric plant with respect to offers in the Alberta electricity

and ancillary services markets.

21

Exhibit 21901-X0008, Preferential sharing of records application registered August 11, 2016, page 1. 22

Ibid., page 12.



b) Irrigation Canal Power Co-op Ltd. must notify the Commission of the termination of any

commercial arrangements between Irrigation Canal Power Co-op Ltd., URICA Energy

Real Time Ltd., and URICA Asset Optimization Ltd. within 30 days of the termination of

commercial arrangements.

c) Irrigation Canal Power Co-op Ltd. must notify the Commission of any material changes

to the information and continued applicability of any representations within its

application that may affect the compliance of Irrigation Canal Power Co-op Ltd.,

URICA Energy Real Time Ltd., or URICA Asset Optimization Ltd. with the Fair,

Efficient and Open Competition Regulation within 30 days of the material changes.

32. The orders shall be effective from the date of this decision until the earlier of June 1,

2029 or the termination of the dispatch service agreement between IRRICAN, URICA Real

Time, and URICA Asset Optimization.

5 Decision

33. Pursuant to the provisions of Section 3 of the Fair, Efficient and Open Competition

Regulation, the Commission grants the application for the sharing of records set out in the

following orders granted to IRRICAN, which are included as separate dispositions in this

proceeding:

Preferential Sharing of Records – Chin Chute Order 21901-D02-2016

Preferential Sharing of Records – IRRICAN Hydro Drops 4, 5, and 6

Order 21901-D03-2016

Preferential Sharing of Records – Raymond Reservoir Order 21901-D04-2016

Dated on September 30, 2016.


(original signed by)

Mark Kolesar

Vice-Chair

(original signed by)

Henry van Egteren

Commission Member



APPENDIX 1 – Abbreviations

Abbreviation Name in Full

AESO Alberta Electric System Operator

AUC or the Commission Alberta Utilities Commission

FEOC Fair, efficient and open competition

Generation Assets Three existing hydroelectric generation assets that have an aggregate capacity of 43 MW. These three units are Chin Chute (15 MW), IRRICAN Hydro Drops 4, 5, and 6 (7 MW), and Raymond Reservoir (21 MW).

IRRICAN Irrigation Canal Power Co-op Ltd.

MSA Market Surveillance Administrator

MW Megawatt(s)

URICA Asset Optimization URICA Asset Optimization Ltd.

URICA Real Time URICA Energy Real Time Ltd.

Documents

Irrigation Canal Power Co-op Ltd. - AUC · 2018. 2. 23. · Irrigation Canal Power Co-op Ltd. Preferential Sharing of Records Between Irrigation Canal Power Co-op Ltd., URICA Energy