On November 17, 2017, the Ontario Energy Association and the Association of Power Producers of Ontario released a report titled “Report on Energy Governance in Ontario” which was drafted by George Vegh, the head of McCarthy Tétrault’s Toronto energy regulatory practice. The report addresses how energy decisions are governed in Ontario and proposes solutions to improve it. The report concludes that energy agencies have not provided the check and balance function that regulators typically perform in other jurisdictions and finds that agencies are often the partner and implementer of political decision making rather than operating as providing a fact-based constraint … Continue Reading
On October 26, 2017, the Ministry of Energy released Ontario’s revised 2017 Long-Term Energy Plan (“LTEP”), Delivering Fairness and Choice. The previous LTEP was published in 2013 (“2013 LTEP”).
This blog provides a summary of the resources addressed in the LTEP. An accompanying piece found here provides an analysis of the Directives issued by the government to the IESO and the OEB respecting implementation plans by those agencies.
The LTEP highlights that between 2026 and 2035, contracts for over 4,800 MW of wind energy, 2,100 MW of solar energy, and 1,200 MW of … Continue Reading
Although largely unnoticed at the time, the passage of Bill 135 fundamentally changed energy regulation in Ontario. It created a new planning process centered on the creation and implementation of government-drafted Long Term Energy Plans, or LTEPS. This new process starts with the LTEP and continues on through agency implementation plans that are approved and overseen by the government. It is the most government-controlled energy planning process in Ontario history. This managed approach carries potential benefit: it increases the likelihood that the government may allow plans to be completed, and even followed. In the past, the government abandoned planning initiatives … Continue Reading
As Ontario’s Cap-and-Trade Program is now in full swing, we wanted to provide an update on some of the more noteworthy developments.
Quarterly Auction Kick-Off
On March 22nd, 2017, the Ontario Government held the first quarterly auction for emission allowances under the Cap-and-Trade Program. As we previously reported, the Ontario Government indicated that it expects to raise $1.9B yearly from the sale of emission allowances. The first auction generated $472,031,155 in proceeds from the sale of 25,296,367 current allowances sold at $18.08 each, and 812,000 from future vintage allowances sold at $18.07 each. The auction sold 100% … Continue Reading
Every decade the government of Ontario freezes or cuts electricity prices because the costs of an ambitious energy policy prove to be politically unacceptable. This leaves future electricity customers paying for the cost of a failed experiment from a previous generation. We should learn from this experience and implement a governance model for the sector that reviews and mitigates costs before a policy is adopted, not after.
In 1993, the government froze prices because the costs of Ontario Hydro’s massive nuclear expansion were leading to double-digit rate increases. In 2002 the government froze prices because the electricity market opening resulted … Continue Reading
As Ontario puts the finishing touches on its cap-and-trade program, which will commence on January 1, 2017, the Ministry of Environment and Climate Change (MOECC) has released its Compliance Offset Credits Regulatory Proposal (the Regulatory Proposal) for a 45-day public comment period that will end on December 30, 2016. Under the cap-and-trade program, capped facilities will be required to either reduce their greenhouse gas (GHG) emissions or meet their compliance obligations through other regulatory tools, including the use of offset credits. As a compliance mechanism, offset credits provide emitters with greater flexibility and potentially lower cost options to meet their … Continue Reading
On July 29, 2016, the IESO posted the final materials for the Large Renewal Project II (“LRP II”) Request for Qualifications (“RFQ”). Draft materials were posted on June 27, 2016 and the IESO solicited feedback from potential applicants and industry groups. As a result of this consultation, minor changes were included in the final materials for the LRP II RFQ.
As previously noted in detail in our post on July 15, 2016, the two major changes to the LRP II RFQ process are the introduction of the simplified process for LRP I Qualified Applicants (“… Continue Reading
On July 21, 2016, the IESO hosted a discussion on the portion of the Large Renewable Procurement II (“LRP II”) process pertaining to technological upgrades and optimization of existing renewable facilities. This discussion provided potential applicants with an opportunity to provide comments and feedback to the IESO as to the types of technologies that should be included in the LRP II process, procurement considerations for such technologies and contractual considerations.
Prescribed Form – Technical Upgrades and Optimization
The Prescribed Form for Technical Upgrades and Optimization is required for applicants submitting an RFQ for a technological upgrade and optimization … Continue Reading
As previously noted, the IESO is currently developing the Large Renewable Procurement II (“LRP II”) process. Consistent with LRP I, the LRP II process will involve two phases: a Request for Qualifications (“LRP II RFQ”) and a Request for Proposals.
On July 13, 2016, the IESO hosted a webinar to provide an overview of the LRP II RFQ process and the changes it has introduced following the feedback received on the LRP I RFQ process. The IESO indicated that the LRP II RFQ process is substantively similar to the LRP I RFQ process. Two key topics … Continue Reading
The following article published in our firm’s newsletter could be of interest to many readers active in the energy industry across Canada. It discusses the applicable rules for lobbyist registration in Ontario, Ontario municipalities, Québec, British Columbia, Alberta and at the federal level.… Continue Reading
The Ontario government’s proposed creation of an agency with a mandate to reduce carbon emissions by buying offsets, funding cleaner factories and buildings, and co-ordinating rooftop solar and energy conservation has been met with skepticism, particularly in light of the province’s experience with energy agencies. However, there is also reason for optimism. Read the whole article here.… Continue Reading
On April 19, 2016, the Ontario Court of Appeal released its decision in Iroquois Falls Power Corporation v. Ontario Electricity Financial Corporation. The decision concerned a dispute between several non-utility generators (“NUGs”) and the Ontario Electricity Financial Corporation (“OEFC”) over changes to a price adjustment index contained within the long-term contracts for the purchase of electricity generated by the NUGs.
This change affected a component portion of a measure known as Total Market Costs (“TMC”), which measure was used to derive the price adjustment index. At the heart of the dispute was an … Continue Reading
On April 13, 2015, the Federal Court of Appeal dismissed the appeal related to the environmental assessment (“EA”) for the refurbishment and continued operation of the Darlington Nuclear Generating Facility (the “Project”). The appeal was from the Federal Court’s earlier decision dismissing a judicial review application related to the EA for the Project.… Continue Reading
The Independent Electricity Systems Provider (IESO) has announced that the 16 contracts offered on March 10, 2016 for Phase I of the Large Renewable Procurement process (LRP I) have now been signed and executed. The execution of the contracts concludes the LRP I process. Moving forward, contracted projects will be required to obtain all necessary licenses and approvals before they can be constructed and operated. These processes are separate from the IESO’s procurement activities and will involve additional community engagement.… Continue Reading
The Ontario Ministry of Energy has announced the launch of the second phase of the Large Renewable Procurement (LRP) process (LRP II). The LRP is a competitive bid process for procuring large renewable energy projects in Ontario larger than 500 kilowatts.… Continue Reading
Today, the Independent Electricity Systems Operator (IESO) announced the results of the Large Renewable Procurement (LRP) I program. The LRP is a competitive bid process for procuring large renewable energy projects in Ontario generally larger than 500 kilowatts.
In response to 103 proposals received, the IESO offered 16 contracts representing 454.885 megawatts (MW) of renewable energy capacity. Of the successful proposals, 13 projects representing 336.8 MW include participation from one or more Aboriginal communities, including 5 projects with greater than 50% participation. More than 75% of the awarded proposals had received support from local municipalities with more than 60% support … Continue Reading
The Environmental Review Tribunal (“ERT” or “Tribunal”) has granted an appeal of a Renewable Energy Approval (“REA”) issued to wpd White Pines Wind Incorporated for its 27 turbine White Pines Wind Project in Prince Edward County (see case 15-068 Hirsch V. Ontario (MOECC) dated February 26, 2016). The ERT concluded the project would cause serious and irreversible harm to two species at risk, the Little Brown Bat and the Blanding’s Turtle. While this is the third REA appeal granted by the ERT, it is the first time that it has found a wind project would cause serious and irreversible harm … Continue Reading
Over the last 10 years, the government has directed the expenditure of billions of dollars of public money on electricity projects with virtually no oversight or checks and balances. During this time, Ontario consumers have seen a large increase in electricity prices, with more to come.
In response to concerns about the rising cost of electricity and poor governance, the Ontario government has touted its proposed Bill 135 as the solution. However, far from solving the concerns about electricity-sector governance, the proposed Bill entrenches and expands the status quo and provides no role for oversight of government electricity directives.
The … Continue Reading
As we reported in our earlier blog last fall, Ontario’s Ministry of the Environment and Climate Change (MOECC) proposed certain amendments to the Greenhouse Gas Emissions Reporting Regulation (O. Reg. 452/09) (the Regulation) in preparation for the introduction of a cap-and-trade system in the province. In December 2015, the MOECC filed amendments to the Regulation that came into force on January 1, 2016. An amended Guideline for Greenhouse Gas Emissions Reporting was published at the same time.… Continue Reading
The Supreme Court of Canada recently released its highly anticipated decisions on utility regulation in Ontario Energy Board v. Ontario Power Generation Inc., 2015 SCC 44 (noted as an Appeal to Watch in 2015 here) and ATCO Gas and Pipelines Ltd. v. Alberta (Utilities Commission), 2015 SCC 45 . These regulatory decisions analyzed a utility’s ability to recover operating and capital costs from consumers through rate-setting, and the methodology to be used in approving rate increases.… Continue Reading
As noted in our earlier posting, the Ontario government announced in April 2015 that it would implement a cap and trade program that would eventually be linked with the existing cap and trade systems in Québec and California. Following extensive public consultations over the summer, Ontario has released its Cap and Trade Program Design Options paper, which is open for public comment until December 16, 2015. As part of the current consultation process, the Ontario government is seeking input on various elements of the program design including timing, scope of the program, caps on greenhouse gas emissions, allowance distribution, … Continue Reading
Ontario’s climate change policy continues to evolve. In February 2015, Ontario released a Climate Change Discussion Paper to help frame the issues for public consultation and in April 2015, it was announced that Ontario would implement a cap and trade program that would link to the existing cap and trade systems in Québec and California.
On the heels of the release of its recent Cap and Trade Program Design Options consultation paper, the Ontario government introduced the province’s Climate Change Strategy on November 24, 2015. The strategy, which is what Ontario will present to the world at the international climate … Continue Reading
On October 28, 2015, the Government of Ontario tabled Bill 135, that will, if enacted, effectively remove independent electricity planning and procurement authority from the IESO and transmission approval from the OEB. Both of these types of authority will be transferred to the Minister of Energy. The Minister will produce long-term energy plans that will be binding on the Ontario Energy Board and the IESO, both of whom must issue implementation plans designed to achieve the objectives of the Government’s plan. The Government’s new planning authority is broader than the IESO’s. It includes both bulk system planning (as was in … Continue Reading
In preparation for the introduction of its cap-and-trade system, Ontario’s Ministry of the Environment and Climate Change (MOECC) is seeking comments on proposed amendments to the Greenhouse Gas Emissions Reporting Regulation (O. Reg. 452/09) (the “Regulation”). Currently, the Regulation requires certain facilities (as identified under the Regulation) emitting 25,000 tonnes or more of carbon dioxide equivalent (“CO2e”) per year to report and verify their emissions data.… Continue Reading