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The Alberta Electric System Operator (AESO) is in the process of updating its transmission cost-of-service methods and rate structures to reflect the evolving industry structure and transmission system conditions. In this report for AESO, a NERA team led by Special Consultant Dr. Hethie Parmesano reviews the latest AESO transmission cost-of-service studies, analyzes stakeholder comments on particular issues addressed in the AESO studies, and provides recommendations on sub-functionalization, classification, and cost recovery methods for bulk and local transmission wires costs. The report also provides information on cost-of-service methods and rate structures adopted for transmission wires costs in other jurisdictions, including regions with transmission systems similar to those in Alberta.