Ontario’s Ministry of Energy (the Ministry) recently proposed amendments to regulations under the Electricity Act, 1998 (the Act). The proposed amendments would amend Ontario Regulation 429/04: Adjustments Under Section 25.33 of the Act (the Regulation) to enable qualifying commercial and industrial customers to offset their facility’s demand through power purchase agreements (PPAs) with renewable generation facilities. The Regulation otherwise provides for the allocation of Global Adjustment (GA) costs to electricity customers and the rules for the Industrial Conservation Initiative (ICI). The proposed amendments follow other recent provincial support for meeting increasing corporate demand for clean and non-emitting sources of energy (see our bulletin on Ontario’s clean energy credit registry here) and the government anticipates that it will create a new market for corporate PPAs, provide system benefits, enhance industrial competitiveness in Ontario, and support new clean generation.
This bulletin briefly summarizes key information regarding the proposed amendments.
The Ministry indicated that the proposed amendments are intended to support the growth of clean electricity generation by enabling qualifying ICI participants (Class A customers) to offset their facility’s demand in the top five peak hours of a base period through PPAs with renewable generation facilities that are not connected behind the facility’s meter. This would allow eligible ICI participants to reduce their demand during peak hours by the corresponding amount under the PPA, thereby reducing the GA charges under the ICI. The Ministry noted that contracted generation through PPAs would be treated as if it is supplied to the ICI participant behind-the-meter for the purpose of determining GA charges, similar to other “virtual” net metering arrangements.
The types of technologies eligible under the proposed amendments is expected to include wind, solar, small hydroelectric (i.e., less than 10 megawatts), biofuel, and battery storage.
The proposed effective date for the amendments is May 1, 2024. Interested stakeholders are encouraged to review the proposed amendments and submit comments online by December 17, 2023.