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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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Ontario Launches Clean Energy Credit Registry

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Ontario’s Ministry of Energy (the Ministry) today announced the launch of the clean energy credit (CEC) registry (see our earlier bulletin on the CEC registry here). Ontario’s Independent Electricity System Operator (IESO) will administer the CEC registry. It is intended to assist businesses to meet environmental and sustainability goals by demonstrating that their electricity has been sourced from clean resources, such as nuclear power, hydroelectric, wind, solar, and bioenergy.   The Ministry also announced that proceeds from the sale of CECs held by the IESO and Ontario Power Generation (OPG) will be directed to Ontario’s newly established Future Clean Electricity Fund (the Fund). The Ministry noted that the sale of CECs will be used to reduce costs for electricity ratepayers and fund the construction of clean electricity projects in Ontario through the Fund. OPG is expected to immediately begin offering its CECs for sale, whereas IESO is expected to begin selling its CECs this summer.   CECs are electronic certificates used to demonstrate that clean energy has been acquired to meet a voluntary target. Each credit represents 1 MWh of clean energy that has been generated and is intended to be exclusively purchased and claimed (or retired) by a load customer within Ontario.   The IESO indicated that eligible generators and loads participating in the sale and purchase of CECs must register for the Ontario Program with Midwest Renewable Energy Tracking System (M-RETS). The M-RETS registry platform enables the creation, transfer and retirement of CECs.   The IESO today launched a Request for Proposals to provide brokerage services for the sale of IESO-owned CECs and noted that it intends to make available 2.5 million CECs for sale throughout Ontario in each calendar year, starting in 2023.   For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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Ontario Proposes Changes to Emissions Performance Standards Program

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Ontario’s Ministry of the Environment, Conservation and Parks (the Ministry) has launched public consultations on proposed regulatory amendments for the Emissions Performance Standards (EPS) program. The proposed changes are meant to ensure that the EPS program meets the updated benchmark under the Greenhouse Gas Pollution Pricing Act (the Act) set by the federal government for 2023-2030 (see our earlier bulletin on the Ministry’s prior EPS consultation here) as the current EPS program only applies to 2022. This bulletin briefly summarizes key proposed changes and provides important information on stakeholder participation in the consultation. Carbon Price. The Ministry is proposing to align the EPS program and the price of excess emissions units (EEUs) with the minimum carbon price set out in the updated federal benchmark ($65 for the 2023 compliance period rising to $170 for the 2030 compliance period). Program Scope. The Ministry is proposing to add the following sectors represented by the North American Industrial Classification System (NAICS) to the list of covered industrial activities based on a preliminary assessment of carbon leakage and competitiveness: Fruit and vegetable preserving and specialty food manufacturing; Meat product manufacturing; Beverage manufacturing; Converted paper product manufacturing; Plastic product manufacturing; Rubber product manufacturing; Forging and stamping; Spring and wire product manufacturing; Machine shops, turned product, and screw, nut, and bolt manufacturing; Engine, turbine and power transmission equipment manufacturing; Other general-purpose machinery manufacturing; Aerospace product and parts manufacturing; Office furniture (including fixtures) manufacturing; Other miscellaneous manufacturing; and Dairy product manufacturing. Registration and Cessation of Coverage. The Ministry is proposing to allow EPS facilities that expect to emit at least 10,000 tCO2e/year within three years following a major retrofit or expansion to apply to register in the EPS program as soon as production has started to increase. The Ministry is also proposing to facilitate a pathway for…

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Premier Ford Announces New Ontario Cabinet

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Ontario Premier Doug Ford today announced members of his new Cabinet. The new Executive Council has increased by three to 30 members and includes seven women, down from nine, and seven people of colour. The new Executive Council largely resembles Premier Ford’s Cabinet prior to the recent election on June 2, with a few notable exceptions, including the now former Minister of Health, Christine Elliot, who did not seek re-election, and Lisa MacLeod, the now former Minister of Heritage, Sport, Tourism. The ministers responsible for environment and energy portfolios remain the same. The new Executive Council is as follows: Doug Ford, Premier of Ontario and Minister of Intergovernmental Affairs Sylvia Jones, Deputy Premier and new Minister of Health Peter Bethlenfalvy, Minister of Finance Paul Calandra, Minister of Long-Term Care, Minister of Legislative Affairs and Government House Leader Raymond Cho, Minister for Seniors and Accessibility Steve Clark, Minister of Municipal Affairs and Housing Doug Downey, Attorney General Jill Dunlop, Minister of Colleges and Universities Vic Fedeli, Minister of Economic Development, Job Creation and Trade, with an additional mandate for small business Michael Ford, Minister of Citizenship and Multiculturalism Merrilee Fullerton, Minister of Children, Community and Social Services Parm Gill, the new Minister of Red Tape Reduction Michael Kerzner, the new Solicitor General Stephen Lecce, Minister of Education Neil Lumsden, the new Minister of Tourism, Culture and Sport Monte McNaughton, Minister of Labour, Immigration, Training and Skills Development Caroline Mulroney, Minister of Transportation and Minister of Francophone Affairs David Piccini, Minister of the Environment, Conservation and Parks Graydon Smith, Minister of Natural Resources and Forestry George Pirie, Minister of Mines, with a mandate to develop the Ring of Fire Kaleed Rasheed, the new Minister of Public and Business Service Delivery Greg Rickford, Minister of Northern Development and Minister of Indigenous Affairs Prabmeet…

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Ontario Provides EPS Principles for Meeting Federal Benchmark and Releases New Emissions Reduction Modelling

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The Ontario Ministry of the Environment, Conservation and Parks (the Ministry) has posted a bulletin (the Bulletin) providing principles to guide policy development and future consultations for Ontario’s Emissions Performance Standards (EPS) program to meet the updated federal benchmark for 2023-2030 (read our earlier bulletins on the EPS here and here). The Ministry also released new modelling demonstrating how Ontario is forecasted to meet its GHG  emission reduction target of 30% below 2005 levels. This bulletin briefly summarizes key information in the Bulletin and the emissions scenario modelling. Proposed Principles. The Bulletin notes that the federal government, in its Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030, set out new and more stringent benchmark requirements ($65/tCO2e in 2023, rising $15/year to $170 in 2030) that all carbon pricing systems, including the EPS program, must meet under the Greenhouse Gas Pollution Pricing Act. To meet the more stringent benchmark, the Ministry is proposing to design the next phase of the EPS program using the following guiding principles: provide continuity and predictability for Ontario businesses; incent GHG emissions reductions, which will help Ontario to meet its target to reduce GHG emissions by 30% below 2005 levels by 2030; minimize the risk for carbon leakage (the risk of production leaving the province for other jurisdictions with less stringent climate policies), taking into account competitiveness impacts to Ontario industry; ensure the program continues to be fair, cost-effective, and flexible to the needs and circumstances of Ontario; and minimize regulatory burden. Emissions Reduction Modelling. New modelling released as part of the Bulletin provides updated forecasting of provincial emissions out to 2030. The modelling shows that Ontario’s emissions are forecasted to be 143.7 MT CO2e in 2030, slightly lower than Ontario’s 144 MT target for 2030. The Ministry notes, and as shown in the graph…

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