Proposed Amendment to O. Reg. 161/99 under the Ontario Energy Board Act, 1998- "Definitions and Exemptions"
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Decision:
On March 6, 2015, the Ministry of Energy posted a proposal to make amendments to Ontario Regulation 161/99 (Definitions and Exemptions) made under the Ontario Energy Board Act, 1998 and Ontario Regulation 160/99 (Definitions and Exemptions) made under the Electricity Act, 1998.
The Ministry of Energy moved forward with its proposal and filed amendments to Ontario Regulation 161/99 and Ontario Regulation 160/99 on June 2, 2015. The amendments came into effect July 1, 2015.
The purpose of the amendments is to clarify that on-bill financing for electricity conservation and demand management measures is an activity that electricity utilities can undertake.
Links to the official regulations are provided in the "Additional Information" section of this notice.
July 3, 2013
Summary of Proposal:
Section 71 of the Ontario Energy Board Act, 1998 (OEBA) currently restricts licensed electricity distributors (LDCs) from directly undertaking most business activities, including activities related to street lighting and sentinel lighting, a legacy of the 1998 electricity sector restructuring that encouraged competition.
Section 71 of the OEBA originally intended that competitive work, such as street lighting, be done by an LDC affiliate or independent third party. As such, LDCs are restricted to undertaking distribution activities such as repairing lines and poles. This original policy intent is reflected in Section 71(1) of the OEBA which prohibits an electricity distributor from carrying on any business activity other than distributing electricity, except through one or more affiliates.
However, over the past decade, the policy landscape has evolved. Electricity distributors have been allowed to expand their business into competitive conservation and renewable generation activities.
For instance, as part of OEBA amendments in 2004, Section 71(2) was added which allowed electricity distributors to provide services related to the promotion of electricity conservation and the efficient use of electricity. This included energy efficiency improvements to street lighting. In practical terms, this amendment meant that electricity distributors could provide street lighting and sentinel lighting services, maintenance or repairs themselves (rather than through affiliates) to improve energy efficiency (e.g. install new efficient bulb), but not for other purposes (e.g. replace existing bulb).
The current approach to providing street lighting and sentinel lighting services, repairs and maintenance lacks regulatory consistency and is overly restrictive. It permits LDCs to replace incandescent bulbs with more energy efficient bulbs. However, LDCs are not allowed to replace a broken bulb with another identical bulb because that would not be considered "distributing" electricity or promoting electricity conservation or efficient electricity use.
The current approach also limits choices for owners of street lighting and sentinel lighting assets, particularly those in some smaller towns and rural communities in Northern Ontario where there is a lack of competitive alternatives to the local LDC.
In order to allow the full-servicing of street lighting and sentinel lighting, the Ministry of Energy is proposing to amend Ontario Regulation 161/99. This regulation prescribes exemptions from various sections of the OEBA. The proposed amendment would exempt licensed electricity distributors from section 71(1) of the OEBA, with respect to providing street lighting and sentinel lighting services, maintenance or repairs in their licensed distribution territory.
Both LDC affiliates and independent third party contractors would still be able to bid for and undertake this work. It would also not affect the flexibility and choice of municipalities to directly undertake this work.
This proposed amendment would expand the scope of business activities that LDCs could undertake. This is consistent with recent amendments giving LDCs the authority to provide services that promote energy conservation and efficiency without using an affiliate.
July 1, 2015