Enhancing Ontario’s Electricity Future: Insights and Recommendations From the Standing Committee on Public Accounts

On May 28, 2024, the Standing Committee on Public Accounts of the Legislative Assembly of Ontario (the Standing Committee) published a report on the 2022 Annual Report of the Auditor General (AG) of Ontario. The Standing Committee’s report (the Report) reviewed Value-for-Money Audit: Ontario Energy Board: Electricity Oversight and Consumer Protection (the AG Audit). In the Report, the Standing Committee presents its own findings on the efficacy of the Ontario Energy Board (OEB) in protecting the interests of Ontario electricity consumers.

The Standing Committee assessed the progress made by the OEB and the Ministry of Energy (the Ministry) since the AG published its audit in 2022. It found that the OEB has transparent regulatory frameworks in place. However, it observed the need to strengthen the reliability of electricity distribution systems and to improve electricity affordability for consumers, offering key recommendations based on its findings.

The AG Audit that forms the basis of the Report evaluated the adequacy, reliability and quality of electricity services provided by the OEB. It noted constraints on the OEB’s ability to protect consumer interests and provided recommendations to enhance consumer protections. Click here for a previous Energy Insider article on the AG Audit.

The Standing Committee held public hearings on the AG Audit, during which it posed questions to the OEB and the Ministry on the AG’s findings. Subsequently published, the Report addresses four areas: Accountability and Transparency; Consumer Protection and Electricity Affordability; Long-Term Energy Planning, Economic Growth and Environmental Impact; and Emerging Technologies. Electricity affordability was a key topic discussed, including pathways to reduce electricity distribution charges and to make power more affordable for residential consumers and businesses. The Committee also discussed the integration of electric vehicles (EVs) and the establishment of Small Modular Reactors (SMRs).

The Report sets out the following recommendations to address several key areas of concern:

• Increasing accountability and transparency with regards to the resilience of the electricity system in the context of climate change was a central issue discussed. The OEB provided the Minister with recommendations to support resiliency, responsiveness and cost efficiency as they relate to electricity distribution. In consultation with London Economics International and other sources, the OEB compiled a list of high-level recommendations in a report, which it presented to the Minister in June 2023. Specifically, Standing Committee members focused on the resilience of transmission and distribution systems connected to critical infrastructure and the timeline for implementation of the resilience program. To address these areas, the Standing Committee recommends that the Ministry report back on the status of its efforts to secure resilience in the electricity system, and on the June 2023 recommendations made by the OEB to the Ministry.
  
• The AG Audit and the Standing Committee addressed electricity affordability and expanding energy sources. The Standing Committee dealt with the issue of regulating power-generating assets and how the Ministry can better regulate power costs for consumers. To increase electricity affordability, the Standing Committee has asked the Ministry to undertake a cost analysis of Unit Sub-Meter Providers and to report back on its findings within a year.
• The Standing Committee recommended a one-year timeline for the Ministry to provide an update on its efforts with the Electrification and Energy Transition Panel (EETP) to address pricing strategies and alternate forms of energy procurement. The Standing Committee’s inquiry into the long-term energy plan revealed that the OEB and the Ministry are working with the EETP on short, medium and long-term goals to expand energy and fuel sources. Our previous Energy Insider article discusses the EETP report, “ Ontario’s Clean Energy Opportunity,” which provided a review of paths forward for Ontario’s energy sector. The Standing Committee also focused on the technological and asset-level expansion of the power grid necessary to accommodate an increase in the demand for electricity brought on by EV adoption.

Following the tabling of the report in the Ontario legislature, the Standing Committee has requested a response from the OEB and the Ministry within 120 days. Stay tuned for their respective responses, as well as the Ministry’s followup on the OEB’s June 2023 report.