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Ontario Proposes Significant Amendments to Ontario Energy Board Act

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The Ontario Government recently introduced the Keeping Ontario Energy Costs Down Act, 2024 (the Act). If passed, the Act will provide the government with significant new authority to influence or direct fundamental questions in future leave to construct applications that come before the Ontario Energy Board (the OEB or Board). In addition, the Act would reverse aspects of a December 21, 2023, decision by the Ontario Energy Board  relating to Enbridge Gas Inc.’s (Enbridge) application for approval of its natural gas rates for the period starting January 1, 2024 (the Enbridge Decision). This bulletin provides key details of the Enbridge Decision and outlines the significant proposed amendments of the Act. The Enbridge Decision, which represents the focal point for much of the government’s statements concerning the Act, arises from a complex regulatory proceeding lasting more than one year, involving approximately one month of hearings and thousands of pages of evidence, and implicating the participation of large numbers of intervenors and expert witnesses. The aspect of the Enbridge Decision that has attracted the most public attention was the OEB’s decision to eliminate Enbridge’s ability to recover the cost of new customer connections to the existing gas network over a 40-year period (i.e., revenue or amortization horizon), meaning those costs would now be recovered upfront. These costs are estimated at approximately $4,412 (weighted average of new construction and existing homes in the “Enbridge Gas Distribution” rate zone). The majority decision’s rationale was based on the need to facilitate an informed choice concerning the full lifetime cost of available energy options and to completely mitigate the stranded asset cost risk. The existing 40-year recovery period attracted criticism from certain parties intervening in the proceedings on the basis that, among others, it does not adequately account for the risk that the ongoing energy transition may result in natural gas assets being replaced over a shorter period, which…

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Ontario’s Electrification and Energy Transition Panel Releases Final Report

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Ontario’s Electrification and Energy Transition Panel (the Panel) has released its final report entitled Ontario’s Clean Energy Opportunity: Report of the Electrification and Energy Transition Panel (the Report). The Panel was established by the Government of Ontario to advise on opportunities for Ontario’s energy sector and identify strategic opportunities and planning reforms to help Ontario’s economy prepare for electrification and the energy transition. The Report provides a comprehensive roadmap for Ontario’s transition to a clean energy economy, emphasizing strategic planning, collaboration, innovation, and the crucial role of Indigenous partnerships.  This bulletin briefly highlights the key findings of the report and outlines the Panel’s key recommendations. Planning for electrification and the energy transition. The Report underscores the urgent and transformative shift in the global energy landscape, emphasizing the need to address climate change and support technological advancements. For example, the Report notes that Ontario faces a significant challenge regarding the future of natural gas, including increasing uncertainty about the feasibility of decarbonizing the natural gas grid and growing doubt about replacing large quantities of natural gas in a cost-effective way with cleaner alternatives such as renewable natural gas (RNG) or hydrogen. Key recommendations include: Recommendation 1 suggests that the provincial government should develop and communicate a commitment and associated policy principles for achieving a clean energy economy for Ontario by 2050 in order to provide clear direction for Ontario’s energy and economic future. Recommendation 3 provides that the provincial government should continue to seek alignment and coordination of clean energy economy objectives, standards, and policies with other governments (within and outside Canada) whenever practical and consistent with the province’s economic and policy interests. Recommendation 6 provides that in order to provide clarity to utilities, investors, and customers, the Ministry of Energy (the Ministry) should provide policy direction on the role of natural gas in Ontario’s future energy system as…

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Ontario Introduces Changes to OEB Act and Electricity Act

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The provincial government last week introduced Bill 13, Supporting People and Businesses Act, 2021, which includes legislative amendments to the Ontario Energy Board Act (OEB Act) and the Electricity Act.    Changes to the OEB Act include: removing the upper limit on the number of commissioners and providing that the Labour Relations Act does not apply to commissioners; and providing for a single process for ministerial review of certain by-laws made by the board of directors of the OEB. Changes to the Electricity Act include: creating a two-year limitation period that applies to certain payments, adjustments, and amounts settled by the IESO; and replacing current administrative penalties in Part VIII of the Act (which provides for the Electrical Safety Authority (ESA)) and empowering the ESA to order a person to pay an administrative penalty if the person has contravened a prescribed provision of Part VIII or the regulations made under it; certain restrictions, limitations or conditions of a prescribed authorization; or a prescribed order of the ESA. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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