Canadian Natural Resources Limited

Transcription

1 Decision D Application for an Order Permitting the Sharing of Records Not Available to the Public Between Canadian Natural Resources Limited and ATCO Power Canada Ltd. July 21, 2017

2 Alberta Utilities Commission Decision D Application for an Order Permitting the Sharing of Records Not Available to the Public Between and ATCO Power Canada Ltd. Application A001 Proceeding July 21, 2017 Published by the: Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 Contents 1 Introduction and background The Commission s authority to allow record sharing Views of the parties Is the proposed sharing of records reasonably necessary? Fair, efficient and openly competitive operation of the market Commission findings Decision... 5 Decision D (July 21, 2017) i

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5 Alberta Utilities Commission Calgary, Alberta Application for an Order Permitting the Sharing of Records Not Available to the Public Between Canadian Natural Resources Limited and ATCO Power Canada Ltd. Decision D Application A001 Proceeding Introduction and background 1. In its application, 1 (CNRL) has requested preferential sharing of information that is not available to the public with respect to the Muskeg Cogeneration Facility (MKR1), which has a maximum capability of 202 megawatts (MW). CNRL submitted in its application that it was necessary to share records relating to MKR1 with ATCO Power Canada Ltd. (ATCO) because this information was necessary to carry out its business obligations relating to the operation of MKR1. CNRL requested that the term for the order be from May 31, 2017, until the earlier of the termination of contractual arrangements between CNRL and ATCO regarding MKR1 or June 1, On August 10, 2010, pursuant to the provisions of Section 3 of the Fair, Efficient and Open Competition Regulation, the Commission issued an order permitting ATCO to share records with respect to MKR1 with Shell Canada Ltd. (Shell). 3 CNRL submitted that, effective May 31, 2017, Shell transferred and assigned ownership of the Albian Sands Industrial Complex north of Fort McMurray, which includes MKR1 and electrical facilities to serve the energy requirements of the site, to CNRL. Electricity and steam is produced by MKR1 to support industrial processes at the Albian Sands Industrial Complex and electricity produced in excess of site requirements is sold by ATCO through the Alberta power pool. CNRL will continue the operational responsibilities formerly performed by Shell for the Albian Sands Industrial Complex. ATCO, in partnership with SaskPower International Inc., owns MKR1. 3. CNRL originally filed its application, with respect to MKR1, for the preferential sharing of records that are not available to the public with ATCO on May 19, On May 24, 2017, CNRL filed a clarification letter along with a revised application. 4. The Commission issued notice of the application on May 25, The notice specified that the only parties with standing in the proceeding were CNRL and the Market Surveillance Administrator (MSA) and 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. 4 1 Application A Exhibit X0005, Revised preferential sharing of records application registered May 24, 2017, PDF page 5. 3 Decision :Shell Canada Limited and ATCO Power Canada Limited - Preferential Sharing of Records between Shell Canada Limited and ATCO Power Canada Limited, Proceeding 511, Application , August 10, Exhibit X0006, Notice of Application, May 25, Decision D (July 21, 2017) 1

6 Application for an Order Permitting the Sharing of Records Not Available to the Public Between and ATCO Power Canada Ltd. 5. On May 25, 2017, the MSA advised the Commission that it supported the application and did not require further evidentiary process On May 31, 2017, the Commission, citing CNRL s expressed need for expedience and noting that the MSA supported the application, issued an order permitting the sharing of records not available to the public between CNRL and ATCO, as requested by CNRL, on an interim basis. 6 The issuance of this interim order addressed the stated need for expedience and provided the Commission with sufficient time to carry out the necessary analysis required by the statutory framework. 7. On June 15, 2017, the Commission requested additional information from CNRL, including additional details on expected offer prices for MKR1, the expected outage schedule for MKR1, the nature of the information to be shared between CNRL and ATCO, and financial arrangements between ATCO and CNRL CNRL responded to the Commission s request on June 29, 2017, providing additional details on its expected use of $0/MWh offer prices with MKR1, how outages are scheduled for MKR1, the information shared between CNRL and ATCO, and the financial arrangements between CNRL and ATCO. 8 2 The Commission s authority to allow record sharing 9. 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) establishes instances where records that are not available to the public may be shared. Section 3(3) 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. 10. In addition to the considerations in Section 3, the Commission must also take into account market share offer control when considering an application to share records. Section 5(5) of the Fair, Efficient and Open Competition Regulation states that a market participant shall not hold offer control in excess of 30 per cent of the total maximum capability of generating units in Alberta. 5 Exhibit X0007, MSA Statement of Intent to Participate, May 25, Order D : Preferential Sharing of Records CNRL ATCO Muskeg Order, Proceeding 22669, Application A001, May 31, Exhibit X0008, AUC Information Request to CNRL round 1, June 15, Exhibit X0009, CNRL Response to IR Round 1, June 29, Decision D (July 21, 2017)

7 Application for an Order Permitting the Sharing of Records Not Available to the Public Between and ATCO Power Canada Ltd. 11. The Commission is also cognizant of the requirement in Section 6 of the Electric Utilities Act that [m]arket participants are to conduct themselves in a manner that supports the fair, efficient and openly competitive operation of the market. 3 Views of the parties 3.1 Is the proposed sharing of records reasonably necessary? 12. CNRL provided a representation from a senior officer in its application that stated the sharing of preferential records described in the application is reasonably necessary for CNRL to carry on its business obligations as joint operator and preferred customer of MKR CNRL has entered into a contractual agreement with ATCO, which, among other things, involves the joint operation of MKR1 by both CNRL and ATCO. Both CNRL and ATCO have on-site personnel that are responsible for the operation of the cogeneration facilities and, hence, require access to operational controls and to dispatch instructions from the Alberta Electric System Operator resulting from the price and quantity pair offers made to the power pool for MKR1 or offers made for the provision of ancillary services. CNRL submitted that all operating information pertaining to MKR1 is subject to shared access with ATCO, and information relating to preferential records is mutually exchanged between CNRL and ATCO as required for the operation of MKR Fair, efficient and openly competitive operation of the market 14. CNRL confirmed that the total market share offer control represented by it and all associates is less than the offer control limit of 30 per cent set out in Section 5(5) of the Fair, Efficient and Open Competition Regulation. CNRL further submitted that ATCO also does not exceed the 30 per cent limit A senior officer of CNRL provided a written representation that indicated the records subject to preferential information sharing will not be used for any purpose that does not support the fair, efficient and openly competitive operation of the Alberta electricity market, including but not limited to the conduct referred to in Section 2 of the Fair, Efficient and Open Competition Regulation. The representation also stated that CNRL has in place a Code of Conduct to ensure internal compliance with the information sharing requirements under the Fair, Efficient and Open Competition Regulation CNRL filed a similar representation from a senior officer at ATCO to confirm that any records shared with ATCO will not be used for any purpose that does not support the fair, efficient and openly competitive operation of the electricity market. The representation also stated that ATCO has in place a Code of Conduct to ensure internal compliance with the information sharing requirements under the Fair, Efficient and Open Competition Regulation Exhibit X0005, Revised preferential sharing of records application, registered May 24, 2017, PDF page Exhibit X0005, Revised preferential sharing of records application, registered May 24, 2017, PDF page Exhibit X0005, Revised preferential sharing of records application, registered May 24, 2017, PDF page Exhibit X0005, Revised preferential sharing of records application, registered May 24, 2017, PDF page 16. Decision D (July 21, 2017) 3

8 Application for an Order Permitting the Sharing of Records Not Available to the Public Between and ATCO Power Canada Ltd. 4 Commission findings 17. The Commission finds that CNRL has demonstrated that the sharing of records is reasonably necessary for it to carry out its business because CNRL lacks the necessary experience and capability to perform real time operator requirements at MKR1 for a generating asset under the ISO rules. 18. CNRL and ATCO have internal compliance programs that require, amongst other things, all employees to comply with laws, rules and regulations, including the Fair, Efficient and Open Competition Regulation regarding the sharing of records, and how such records can and cannot be used. The Commission understands that the employees of each company are required to read and comply with these policies. 19. CNRL has confirmed that a $0/MWh offer block will be used exclusively for MKR1, and that ATCO segregates its outage scheduling function within a different group inside of ATCO to ensure functional segregation from ATCO Calgary s Marketing staff, and that ATCO does not have contractual rights to request additional or less electricity from MKR1 for the power pool and / or ancillary services markets. 20. All offer control figures for all entities involved (both before and after any approval to share records) are less than the offer control limit of 30 per cent set out in Section 5(5) of the Fair, Efficient and Open Competition Regulation. 21. CNRL and ATCO have each made representations that the preferential records relating to MKR1 will not be used for any purpose that does not support the fair, efficient and openly competitive operation of the Alberta electricity market. 22. Based on these measures, the Commission finds that the MKR1 records shared between CNRL and ATCO 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. 23. Having regard to the foregoing, the Commission is prepared to issue an order allowing CNRL to share records not available to the public, with ATCO, subject to the following terms and conditions: a) The order only applies to the sharing of information between CNRL and ATCO relating to price, quantity, and availability information for the 202-MW MKR1 unit with respect to offers in the Alberta electricity and ancillary services markets. b) CNRL must notify the Commission of the termination of the commercial arrangements between CNRL and ATCO within 30 days of the termination of such commercial arrangements. c) CNRL must notify the Commission of any material changes to the information and continued applicability of any representations contained within its application that may affect the compliance of CNRL or ATCO with the Fair, Efficient and Open Competition Regulation within 30 days of the material changes. 4 Decision D (July 21, 2017)

9 Application for an Order Permitting the Sharing of Records Not Available to the Public Between and ATCO Power Canada Ltd. 24. The order shall be effective from the date of this decision until the earlier of the termination of contractual arrangements between CNRL and ATCO regarding MKR1 or June 1, Decision 25. 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 order granted to CNRL and ATCO, which is a separate disposition in this proceeding: Preferential Sharing of Records CNRL ATCO Muskeg Order D Dated on July 21, Alberta Utilities Commission (original signed by) Henry van Egteren Panel Chair (original signed by) Bill Lyttle Commission Member (original signed by) Tracee Collins Commission Member Decision D (July 21, 2017) 5