Ontario Energy Ministry Announces 3 New Regulatory Proposals

The Ministry of Energy, Northern Development and Mines (MENDM) has announced three new regulatory proposals, each of which is open for stakeholder comment over the next five to six weeks. This bulletin briefly summarizes the following regulatory proposals:

  1. Global Adjustment deferral initiative (comments due November 30);

  2. Changes to net metering regulation (comments due November 22);

  3. Province-wide implementation of Green Button (comments due November 22).

Global Adjustment deferral initiative. MENDM has proposed amendments to the Global Adjustment (GA) regulation (O. Reg. 429/04) that would, if approved, provide for the recovery throughout 2021 of certain electricity generation costs that were not charged to non-Regulated Price Plan (RPP) electricity consumers between April and June 2020 as a result of the government’s GA deferral initiative to mitigate the impact of the COVID-19 pandemic on commercial and industrial consumers in Ontario.

MENDM set an upper limit on the GA rate for non- RPP Class B (i.e., commercial) consumers of $115/MWh for the months of April, May and June 2020. Class A (i.e., industrial) consumers, who pay a fixed GA charge monthly that is independent of consumption, received a reduction in GA proportional to the reduction that Class B consumers received.

The actual non-RPP Class B GA rate for each of these months exceeded $115/MWh, leading to a shortfall in the amount collected from consumers, with the actual deferred amount totalling approximately $333m. Non-RPP Class B received approximately 62% ($206m) of the total deferred amount and Class A received approximately 38% ($127m).

The proposed regulatory amendments include:

  • Recovery of GA costs throughout 2021 from the same customer classes that benefitted from the deferral;

  • Independent Electricity System Operator (IESO) will add approximately $10.6m to Class A recovery each month (rate impact based on peak demand factor (PDF)) and $17.2m to non-RPP Class B recovery each month (rate impact based on consumption);

  • Consumer classes will be paid their respective shares at the end of 2021.

Comments on the regulatory proposal are due by November 30, 2020.

Changes to net metering regulation to support community-based energy systems. MENDM is also seeking input on a proposal for amendments to Ontario’s net metering regulation to facilitate community net metering demonstration projects (including those employing distributed energy resources (DERs)). The proposed community net metering model would include the following requirements:

  • Electricity utilities enter into net metering arrangement with customer leading community net metering demonstration project;

  • Behind the meter renewable electricity generation, and potentially energy storage, are part of community electrical system;

  • Billing of sub-metered customers within community is in accordance with Energy Consumer Protection Act, 2010, Unit Sub-Metering Code, and other applicable codes and rules;

  • Limited participation in demonstration (e.g., total number of projects, capacity limits for individual projects and/or all projects);

  • Reporting requirements to measure performance;

  • Net metering agreements that set roles, responsibilities, and obligations as between utility and lead customer; and

  • Compliance with all applicable electricity codes and rules.

Comments may be submitted to Cassandra Rosen, Senior Policy Advisor, Renewables Policy Unit via the Environmental Registry until November 22, 2020.

Province-wide implementation of Green Button. Finally, MENDM has proposed a regulatory amendment that would require electricity and natural gas utilities to implement the Green Button Download My Data (DMD) and Connect My Data (CMD) testing programs (collectively referred to as Green Button).

Utilities would be required to develop a Green Button software program (or procure same from a third party) and obtain Green Button DMD and CMD certification. Green Button is a data standard that can empower households and business with access to their utility data (i.e., DMD) and allow them to authorize the automatic, secure transfer of their own data from their utility to applications or third parties. The Green Button standard is available from the North American Energy Standards Board (NAESB).

MENDM expects province-wide implementation of Green Button to:

  • Support increased conservation and energy efficiency (through behavioural changes and retrofit improvements);

  • Create economic development opportunities by fostering development of innovative and interactive energy management software tools and apps;

  • Increase process efficiencies and reduce costs for consumers and third-party service providers to access energy data from electricity and natural gas utilities;

  • Reduce utility customer care effort and increase conservation program efficiencies and innovations for electricity and natural gas utilities; and

  • Support energy reporting and benchmarking by removing barriers and reducing effort/cost for consumers who need access to their data to comply with broader public sector and large building owner reporting obligations.

The proposed regulation is expected to be implemented under existing legislative authority in the Electricity Act, 1998. Comments may be submitted to Matthew Edwards, Senior Policy Advisor, Energy Conservation Policy via the Environmental Registry until November 22, 2020.

For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@demarcoallan.com.

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