Resilient LLP (formerly DeMarco Allan LLP)
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Biden-⁠Harris Administration Launches Federal-State Initiative to Modernize Power Grid

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The Biden-Harris Administration (the Administration) yesterday launched the Federal-State Modern Grid Deployment Initiative (the Initiative), along with an accompanying fact sheet. The Initiative brings together states, federal entities, and U.S. power sector stakeholders to expand grid capacity and build modern grid capabilities on both new and existing transmission and distribution lines. Implementing these solutions is expected to increase integration of renewables and clean energy sources, with the U.S. set to build more new electric generation capacity than it has in 20 years (96% of it being clean energy). The Initiative is intended to complement last month’s announcement of a public-private mobilization to upgrade 100,000 miles of existing transmission lines over the next five years. This bulletin briefly summarizes the Initiative’s key state and federal commitments: Mutual federal-state commitments. The Initiative aims to address the challenges and opportunities posed by increased load growth, a rapidly evolving energy landscape, aging infrastructure, and new grid-enhancing technologies while ensuring reliable, clean, and affordable energy for consumers. The U.S. government and participating states jointly commit to: deploy advanced grid technologies to expand capacity and enhance both new and existing transmission and distribution lines; recognize that modern grid technologies are essential for a comprehensive energy strategy, complementing the need to build out new transmission and distribution lines; work to increase state and federal cooperation for both intraregional and interregional transmission planning efforts; work collaboratively with solution providers, industry, labour organizations, and trusted validators to build a diverse workforce and ensure grid owners and operators have access to training and equipmentneeded to support modern technology deployment; facilitate collaboration among stakeholders and communities to share how to improve siting, regulatory, and economic structures most effectively; and explore opportunities to establish innovative partnership models, pool resources, and jointly plan transmission and distribution infrastructure development. State commitments. 21 state governments,…

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Ontario Publishes New Draft Regulations on Corporate Power Purchase Agreements

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Ontario’s Ministry of Energy and Natural Resources (the Ministry) has announced new draft amendments (the Proposed Amendments) to O. Reg. 429/04, Adjustments Under Section 25.33 of the Act (the Regulations). The Regulations establish the global adjustment (GA) fees Ontario’s large commercial electricity consumers must pay to fund the cost of non-wholesale market electricity contracts pursuant to section 25.33 of the Electricity Act, 1998 (the Act). The Proposed Amendments are based on feedback received from stakeholders during the consultation held in late 2023. The anticipated effective date for the Proposed Amendments is May 1, 2025.   This bulletin briefly summarizes the Proposed Amendments and key information.   Background. The Independent Electricity System Operator (IESO) began procuring new clean electricity resources in 2023 as directed by the province’s Powering Ontario’s Growth plan. The IESO initiated electricity capacity resource procurement in 2023 and plans to start electricity energy resource procurement in 2024. Key objectives. The Proposed Amendments seek to support the growth in procurement of new clean generation in the province. This is done by allowing Industrial Conservation Initiative (ICI) Class A market participants to offset their facility’s demand in the top five peak hours of a base period for settlement purposes by entering into power purchase agreements (PPAs) with non-emitting generation facilities that are not connected behind the facility’s meter.   Eligible technologies. The types of eligible technologies under the Proposed Amendments are wind, solar, hydroelectric, and biofuel. In making the announcement, the Ministry stated that it recognizes the interest in pairing these technologies with energy storage and small modular reactors (SMRs), but deferred inclusion of these additional technologies due to implementation complexities. Energy storage resources are critical to a cost-effective, safe, clean, and reliable electricity grid, and the Ministry may wish to consider expediting the eligibility of energy storage (particularly battery electric storage) under the Proposed Amendments.   Stakeholder feedback. Interested stakeholders are encouraged to submit feedback on the Proposed Amendments by June…

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Government of Canada Releases Fall Economic Statement: Key Energy and Climate Highlights

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Deputy Prime Minister and Minister of Finance Chrystia Freeland has released the federal government’s Fall Economic Statement 2023 (the FES). The FES sets out two areas of focus: supporting the middle class through targeted affordability, mortgage support, and price stabilization measures; and measures to support housing construction and housing affordability generally.  This bulletin outlines key energy and climate highlights from the FES: Implementation of new clean economy investment tax credits for carbon capture, utilization and storage (CCUS), clean technology adoption, clean hydrogen, clean technology manufacturing, and clean electricity. Subject to consultations, FES commits to delivering all investment tax credits in 2024. The clean economy investment tax credits would be introduced through legislation this fall in the case of CCUS and Clean Technology, and by the end of 2024 in all other cases, with projected effective dates as follows: CCUS: January 1, 2022 Clean Technology: March 28, 2023 Clean Hydrogen: March 28, 2023 Clean Technology Manufacturing: January 1, 2024 Clean Electricity: Budget 2024 for projects that did not begin construction before March 28, 2023. Expansion of the 30-per-cent Clean Technology investment tax credit. FES proposes to expand eligibility to include systems that produce electricity, heat, or both electricity and heat from waste biomass. This expansion will apply to eligible property that is acquired and becomes available for use on or after the date of the FES. Expansion of the 15-per-cent Clean Electricity investment tax credit. FES proposes to expand eligibility to include systems that produce electricity or both electricity and heat from waste biomass. This expansion will apply to eligible projects as of the date of Budget 2024, provided that construction did not begin before March 28, 2023.   Canada Growth Fund. The Canada Growth Fund (CGF) announced its first investment on October 25, 2023, with a $90 million investment in Calgary’s Eavor…

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Ontario Proposes Enabling Renewable Energy Power Purchase Agreements

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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. Overview 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. Eligible Technology 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. Next steps The proposed effective date for the amendments is May 1, 2024. Interested stakeholders are encouraged to review…

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Canada Releases Draft Clean Electricity Regulations

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Canada’s Minister of Environment and Climate Change (the “Minister”), in collaboration with the Minister of Energy and Natural Resources, has announced the release of proposed Clean Electricity Regulations (the “Proposed Regulations”) (see our earlier bulletin on prior consultations here). The Proposed Regulations would establish significant and ambitious emission performance standards (“EPS”) to reduce greenhouse gas (“GHG”) emissions from fossil fuel-generated electricity generation facilities in all provinces and territories across Canada starting in 2035. Environment and Climate Change Canada (“ECCC”) estimates that the Proposed Regulations would result in a net reduction of 342 million metric tonnes (Mt) of CO2e emissions between 2024 and 2050 and a net benefit to society of $28.9B. The Proposed Regulations also impose significant registration, record keeping, and reporting obligations on covered electricity generation facilities. The Proposed Regulations represent a significant foray by the federal government into electricity policy, which has traditionally been an area of provincial jurisdiction. In their current form, the Proposed Regulations are expected to attract opposition from some provincial governments, and potential constitutional legal challenges. ECCC is seeking feedback on the Proposed Regulations. Interested stakeholders are encouraged to review the Proposed Regulations and submit detailed comments by no later than November 2, 2023.  We anticipate that policy developments are being targeted for announcement before or at the UNFCCC Conference of the Parties meetings (COP28 Paris Agreement negotiations) that start on November 30, 2023, in Dubai, UAE. This bulletin briefly summarizes key details of the Proposed Regulation: Application. The Proposed Regulations would apply to any “unit” (defined as an assembly comprised of any equipment that is physically connected and that operates together to generate electricity, and (a) must include at least a boiler or combustion engine and (b) may include duct burners and other combustion devices, heat recovery systems, steam turbines, generators, emission control devices and carbon capture and storage (“CCS”) systems) that meets the three following criteria:…

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