OEB Staff Bulletin Indicates that BTM Storage Assets that Improve Reliability May Be Considered &quo

Ontario Energy Board (Board) staff today issued a bulletin (the Bulletin) indicating that the ownership and operation of behind-the-meter (BTM) storage assets may be considered a "distribution activity" for the purposes of section 71(1) of the Ontario Energy Board Act (the OEB Act), if the main purpose of the assets is to remediate comparatively poor reliability of service. Section 71(1) of the OEB Act generally prohibits a distributor from carrying on a business activity other than the distribution of electricity, unless the business activity is carried out through one or more affiliates. The Bulletin expresses Board staff's non-binding view. Board Staff noted that utility programs directed at improving reliability for targeted customer groups, such as “worst performing feeder” programs, have tended to focus on grid-side improvements and that the costs of these programs are already funded through distribution rates. Board staff concluded that it is therefore reasonable to expand options considered for reliability improvement beyond traditional wires investments given the emergence of new technology options such as storage, which can also be effective at improving reliability for specific customers. Board staff's view is that an investment made for the purpose of addressing a distribution concern should be considered a distribution activity, even if there are other incidental benefits to the customer — but that an investment driven by another purpose, even if there are incidental benefits to the distribution system should not be. For example, Board staff stated that it would not consider the deployment of BTM storage to be a distribution activity if the reason for the storage were to provide a customer with the financial benefits that might be obtained through peak-shaving. For additional information, please contact Lisa DeMarco at lisa@demarcoallan.com.

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