Ontario Ministry of Energy Proposes Regulatory Changes to Start Implementing 2017 LTEP

As we discussed in an earlier post, many of the new initiatives set out in Ontario’s 2017 Long-Term Energy Plan (2017 LTEP) will require changes to statutes and/or regulations. Late last month, the Ontario Ministry of Energy announced changes to a couple of regulations to begin implementing announced changes related to energy storage and unit sub-metering.

In the 2017 LTEP, the government promised to make changes to remove regulatory and market barriers that are inhibiting the growth and adoption of energy storage in Ontario. One step in this direction is set out in a new Regulatory Proposal that proposes changes to the Global Adjustment Regulation. Specifically, the Ministry of Energy proposes to define energy storage in the Regulation “to address the unique characteristics of these facilities, such as their ability to provide services to Ontario's electricity grid.” Presumably, this change is intended to take account of the fact that storage facilities can play and serve multiple roles (as recipients and providers of electricity and as providers of ancillary services), in contrast to generation facilities which are intended to serve as sources of supply. Additionally, the Regulation will be amended “so that certain Class B energy storage facilities with an average monthly peak demand under 1MW remit Global Adjustment (GA) only on net consumption.” The implication of this change is that GA should not be paid twice where storage facilities purchase electricity from the distribution/transmission system and then later supply electricity to customers. Instead, exemptions or arrangements would be included in the Regulation to ensure that GA is only paid once for that electricity supply. The details of the specific regulatory amendments that will enable these changes are not set out in the Regulatory Proposal, but they are expected to take effect on July 1, 2018.

The 2017 LTEP also indicated that the government plans to provide the Ontario Energy Board (OEB) with increased regulatory authority over unit sub-meter providers (USMPs). The stated goal is to increase consumer protection. A recent Regulatory Proposal confirms the Ministry of Energy’s plans to proceed with this initiative. In that document, the Ministry indicates that it plans to update the “Assessment of Expenses and Expenditures” Regulation made under the OEB Act in order to add USMPs as entities that are liable to pay OEB cost assessments. Currently, gas and electricity utilities, electricity retailers and gas marketers are assessed (and must pay towards) OEB costs, but USMPs are not. The move to have USMPs pay some of the OEB’s costs is a first step in what is said to be “a broader plan with respect to the regulation of USMPs.” As set out in this Regulatory Proposal, the government intends to provide the OEB with authority to regulate what USMPs may charge for unit sub-metering “by proclaiming into force certain new or amending provisions in section 78 of the OEB Act.” These provisions, which were enacted in 2010 but which have never been proclaimed into law, would permit the OEB to approve USMP charges “in accordance with rules prescribed by the regulations.” Presumably, enabling Regulations would have to be created before the OEB could commence approving USMP charges.

Comments on each of the Regulatory Proposals can be submitted to the Ministry of Energy by November 24.