Regulation - LGIC
Enabling the enforceability of the Building Broadband Faster Act Guideline
Regulation Number(s):
410/22
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Decision:
"Enabling the enforceability of the Building Broadband Faster Act Guideline" (21-ENDM036) was posted on Ontario's Regulatory Registry from December 1, 2020, to January 17, 2021.
The input received from stakeholders through this posting and other consultations informed the provisions in O. Reg. 410/22: Electricity Infrastructure - Designated Broadband Projects, which was made and filed on April 21, 2022.
O. Reg. 410/22: Electricity Infrastructure - Designated Broadband Projects is intended to ensure responsible and predictable behaviour by Ontario's local distribution companies (LDCs) as well as to promote efficiency and help achieve the government's commitment to have 100 percent connectivity by the end of 2025.
Provisions of the regulation include:
• Performance timeline standards and processes related to pole attachments and work required to make a pole ready for attachments: "make ready work."
• Identifying situations when performance standards may be temporarily suspended.
• Allowing ISPs to employ contractors to complete make-ready work when an LDC is unable to do so, while indemnifying LDCs from any damages that may occur from that work.
• Supporting the effective operation of the Broadband One Window platform by requiring LDCs to use the platform with a proponent of a designated broadband project elects to do so.
• Establishing a timely dispute resolution process that supports the Minister of Infrastructure's notice powers under the Building Broadband Faster Act, 2021,
• Enabling LDCs and proponents of a designated broadband projects to come to agreements that may deviate from some provisions of this regulation; and,
• Allowing for LDCs to track their costs and seek recovery of prudent investments on behalf of ratepayers.
The input received from stakeholders through this posting and other consultations informed the provisions in O. Reg. 410/22: Electricity Infrastructure - Designated Broadband Projects, which was made and filed on April 21, 2022.
O. Reg. 410/22: Electricity Infrastructure - Designated Broadband Projects is intended to ensure responsible and predictable behaviour by Ontario's local distribution companies (LDCs) as well as to promote efficiency and help achieve the government's commitment to have 100 percent connectivity by the end of 2025.
Provisions of the regulation include:
• Performance timeline standards and processes related to pole attachments and work required to make a pole ready for attachments: "make ready work."
• Identifying situations when performance standards may be temporarily suspended.
• Allowing ISPs to employ contractors to complete make-ready work when an LDC is unable to do so, while indemnifying LDCs from any damages that may occur from that work.
• Supporting the effective operation of the Broadband One Window platform by requiring LDCs to use the platform with a proponent of a designated broadband project elects to do so.
• Establishing a timely dispute resolution process that supports the Minister of Infrastructure's notice powers under the Building Broadband Faster Act, 2021,
• Enabling LDCs and proponents of a designated broadband projects to come to agreements that may deviate from some provisions of this regulation; and,
• Allowing for LDCs to track their costs and seek recovery of prudent investments on behalf of ratepayers.
Analysis of Regulatory Impact:
The Ministry's regulatory impact assessment did not identify any additional compliance costs for regulated entities. The costs of compliance with this regulation are anticipated to be paid for through two sources: ISPs in receipt of tax-based funding and electricity rates where investments directly benefit ratepayers.
To ensure the equitable division of costs, the regulation stipulates that the LDC charge an amount to the ISP for the apportionment of capital costs and other related costs related relation to a designated broadband project. In the absence of a contract, the regulation adopts an approach based in part on the OEB's Distribution System Code. In this case, ratepayers will only be responsible for the depreciated cost of capital assets that need replacing and those operational and administrative costs associated with that work that cannot be attributed to ISPs. ISPs will be responsible for the remainder, including the undepreciated cost of the new pole plus advancement costs. ISPs will also pay the wireline pole attachment charge every year to finance the ongoing cost of the asset.
The regulation provides for a regulatory deferral account to be established to record capital and non-capital costs, as well as other project related costs, incurred by LDCs. The OEB will review these costs for accuracy and prudency, and where the ISP and the LDC enter into a cost allocation agreement, that the costs and revenues reflect a reasonable allocation of costs between the proponent and distributor, before approving them for recovery through electricity rates.
A significant number of electricity poles will need to be replaced to support broadband attachments. These new poles will serve LDCs and their ratepayers for decades. Generally, newer poles are more reliable than older poles, which mean some customers may benefit from more reliable service than they otherwise would have received.
By accelerating the timeline to achieve 100 per cent access to high-speed internet by the end of 2025, all communities will be closer to participating in the digital economy, making them stronger, more competitive, and sustainable. The Government's investment in broadband is expected to pay dividends in every social determinant of health.
To ensure the equitable division of costs, the regulation stipulates that the LDC charge an amount to the ISP for the apportionment of capital costs and other related costs related relation to a designated broadband project. In the absence of a contract, the regulation adopts an approach based in part on the OEB's Distribution System Code. In this case, ratepayers will only be responsible for the depreciated cost of capital assets that need replacing and those operational and administrative costs associated with that work that cannot be attributed to ISPs. ISPs will be responsible for the remainder, including the undepreciated cost of the new pole plus advancement costs. ISPs will also pay the wireline pole attachment charge every year to finance the ongoing cost of the asset.
The regulation provides for a regulatory deferral account to be established to record capital and non-capital costs, as well as other project related costs, incurred by LDCs. The OEB will review these costs for accuracy and prudency, and where the ISP and the LDC enter into a cost allocation agreement, that the costs and revenues reflect a reasonable allocation of costs between the proponent and distributor, before approving them for recovery through electricity rates.
A significant number of electricity poles will need to be replaced to support broadband attachments. These new poles will serve LDCs and their ratepayers for decades. Generally, newer poles are more reliable than older poles, which mean some customers may benefit from more reliable service than they otherwise would have received.
By accelerating the timeline to achieve 100 per cent access to high-speed internet by the end of 2025, all communities will be closer to participating in the digital economy, making them stronger, more competitive, and sustainable. The Government's investment in broadband is expected to pay dividends in every social determinant of health.
Further Information:
Part VI.1 of the Ontario Energy Board Act, 1998
Building Broadband Faster Act, 2021
O. Reg. 410/22: Electricity Infrastructure - Designated Broadband Projects under the OEB Act, 1998
Proposal Number:
21-ENDM036
Posting Date:
December 1, 2021
Summary of Proposal:
In April 2021, the Legislative Assembly passed the Supporting Broadband and Infrastructure Expansion Act, 2021. This legislation contained amendments to the Ontario Energy Board Act, 1998. When proclaimed the amendments will allow the Ministry of Energy to develop regulations that can impose obligations on regulated entities for the use of, access to, or development of electricity infrastructure for reasons other than the generation, transmission, distribution, consumption, sale or demand management of electricity.
In line with the statement of intent published on November 30, 2021, the Ministry of Energy intends to propose a new regulation or regulations to support provisions of the Building Broadband Faster Act Guideline. The Guideline has also been released concurrently and is available to support project stakeholders with the timely and efficient delivery of provincial high-speed internet projects. The Guideline is intended to further reduce barriers, speed up broadband deployment and support the successful implementation of the Building Broadband Faster Act. The regulations proposed here would:
- Establish performance timeline standards for LDCs consistent with the Guideline.
- Articulate when and for what reasons timelines may be temporarily suspended by Local Distribution Companies (LDCs), and outline processes in order to expediently resolve the cause of that suspension, including mediation and, if required, orders for LDCs to resume work.
- In support of meeting these timelines, require that LDCs make good faith efforts to authorize ISP-identified competent persons and allow those competent persons access to distribution system assets where:
o the LDC is unable to conduct, or opts out of conducting, work within the established performance timelines; or
o the LDC does not provide an acceptable list of contractors that an Internet Service Provider (ISP) can use to conduct this work.
- Allow an LDC to refuse third party contractors where the ISP does not provide an indemnity of at least 120 days and/or refuses to pay reasonable costs for an LDC to inspect these assets within the same period.
- Require that LDCs provide and accept information/data to and from the Ontario Infrastructure and Lands Corporation (Infrastructure Ontario) on behalf of the Ministry of Infrastructure for the purposes of facilitating the Broadband One Window platform, including but not limited to:
o providing geospatial information
o accepting applications for work
o providing updates on those applications, including approvals, when an ISP has elected to use the platform.
- Allow LDCs and ISPs to adopt processes that may differ from these regulations under certain conditions that maintain the objectives of broadband expansion.
- If required, articulate the role of the Ontario Energy Board (OEB) in resolving disputes in a timely fashion, which may include orders to LDCs to complete work.
- If required, set out the process governing payment to LDCs related to make-ready costs, if such a process is not established through commercial arrangements or addressed by the Broadband Coordinator.
The Government expects that broadband stakeholders, those involved in designated broadband projects, will engage in good faith in a manner consistent with the spirit of partnership and collaboration. This framework proposes to set out the expectations to guide those relationships and identify opportunities for dispute resolution only when required.
In line with the statement of intent published on November 30, 2021, the Ministry of Energy intends to propose a new regulation or regulations to support provisions of the Building Broadband Faster Act Guideline. The Guideline has also been released concurrently and is available to support project stakeholders with the timely and efficient delivery of provincial high-speed internet projects. The Guideline is intended to further reduce barriers, speed up broadband deployment and support the successful implementation of the Building Broadband Faster Act. The regulations proposed here would:
- Establish performance timeline standards for LDCs consistent with the Guideline.
- Articulate when and for what reasons timelines may be temporarily suspended by Local Distribution Companies (LDCs), and outline processes in order to expediently resolve the cause of that suspension, including mediation and, if required, orders for LDCs to resume work.
- In support of meeting these timelines, require that LDCs make good faith efforts to authorize ISP-identified competent persons and allow those competent persons access to distribution system assets where:
o the LDC is unable to conduct, or opts out of conducting, work within the established performance timelines; or
o the LDC does not provide an acceptable list of contractors that an Internet Service Provider (ISP) can use to conduct this work.
- Allow an LDC to refuse third party contractors where the ISP does not provide an indemnity of at least 120 days and/or refuses to pay reasonable costs for an LDC to inspect these assets within the same period.
- Require that LDCs provide and accept information/data to and from the Ontario Infrastructure and Lands Corporation (Infrastructure Ontario) on behalf of the Ministry of Infrastructure for the purposes of facilitating the Broadband One Window platform, including but not limited to:
o providing geospatial information
o accepting applications for work
o providing updates on those applications, including approvals, when an ISP has elected to use the platform.
- Allow LDCs and ISPs to adopt processes that may differ from these regulations under certain conditions that maintain the objectives of broadband expansion.
- If required, articulate the role of the Ontario Energy Board (OEB) in resolving disputes in a timely fashion, which may include orders to LDCs to complete work.
- If required, set out the process governing payment to LDCs related to make-ready costs, if such a process is not established through commercial arrangements or addressed by the Broadband Coordinator.
The Government expects that broadband stakeholders, those involved in designated broadband projects, will engage in good faith in a manner consistent with the spirit of partnership and collaboration. This framework proposes to set out the expectations to guide those relationships and identify opportunities for dispute resolution only when required.
Contact Address:
Ministry of Energy
77 Grenville Street, 6th Floor
Toronto ON M7A 2C1
77 Grenville Street, 6th Floor
Toronto ON M7A 2C1
Effective Date:
April 17, 2022
Decision:
Approved