Regulation - LGIC
Comprehensive Electricity Plan (CEP) Biomass
Regulation Number(s):
735/20
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998
Summary of Decision:
Amendments (i.e. Ontario Regulation 29/22) to Ontario Regulation 735/20 made under the Electricity Act, 1998 came into effect as of January 27, 2022. These recent amendments enable the government to provide funding for certain amounts payable to an entity under a procurement contract respecting one or more generation facilities that generate any electricity using biomass, where the Independent Electricity System Operator (IESO) was required to enter into the contract by ministerial directive or direction under the Electricity Act, 1998.
These amendments will allow the government to provide funding for certain costs associated with the procurement contracts pertaining to five biomass facilities located in northern Ontario. The existing procurement contracts pertaining to these five biomass facilities are scheduled to expire over the next three years and may be re-contracted if the government directs IESO to enter into such procurement contracts.
Under these recent regulatory amendments, it is the government's intention that a portion of the Global Adjustment (GA) costs associated with the biomass facilities, if IESO is directed to enter into a procurement contract pertaining to these facilities pursuant to government direction, would be funded by government through the Comprehensive Electricity Plan (CEP) once their current contract term ends.
An associated proposal was not posted for public comment on the Regulatory Registry before the regulatory amendments were made, as the government announced its intention to fund certain costs associated with the contracts for five existing northern Ontario biomass electricity generators as part of the 2021 Fall Economic Outlook and Fiscal Review.
These amendments will allow the government to provide funding for certain costs associated with the procurement contracts pertaining to five biomass facilities located in northern Ontario. The existing procurement contracts pertaining to these five biomass facilities are scheduled to expire over the next three years and may be re-contracted if the government directs IESO to enter into such procurement contracts.
Under these recent regulatory amendments, it is the government's intention that a portion of the Global Adjustment (GA) costs associated with the biomass facilities, if IESO is directed to enter into a procurement contract pertaining to these facilities pursuant to government direction, would be funded by government through the Comprehensive Electricity Plan (CEP) once their current contract term ends.
An associated proposal was not posted for public comment on the Regulatory Registry before the regulatory amendments were made, as the government announced its intention to fund certain costs associated with the contracts for five existing northern Ontario biomass electricity generators as part of the 2021 Fall Economic Outlook and Fiscal Review.
Analysis of Regulatory Impact:
Impacts on End Users
Government funding of certain costs associated with biomass facilities through the CEP is not expected to impact electricity consumers over time, since any significant cost pressures could be funded by the government, provided that sufficient amounts are appropriated by the Legislature. The funding of biomass contracts has been enabled and designed to avoid any cost pressure on consumers.
Impacts on Regulated Entities
On an annual basis, IESO would be required to report to the Ministry of Energy with an updated forecast of renewable energy contract costs and the variance between forecasts and actual costs in respect of the previous period, including costs associated with biomass facilities.
The Ministry of Energy will work closely with IESO, Ontario Energy Boared (OEB) and Local Distribution Companies (LDCs) as required to address future issues as they materialize.
Government funding of certain costs associated with biomass facilities through the CEP is not expected to impact electricity consumers over time, since any significant cost pressures could be funded by the government, provided that sufficient amounts are appropriated by the Legislature. The funding of biomass contracts has been enabled and designed to avoid any cost pressure on consumers.
Impacts on Regulated Entities
On an annual basis, IESO would be required to report to the Ministry of Energy with an updated forecast of renewable energy contract costs and the variance between forecasts and actual costs in respect of the previous period, including costs associated with biomass facilities.
The Ministry of Energy will work closely with IESO, Ontario Energy Boared (OEB) and Local Distribution Companies (LDCs) as required to address future issues as they materialize.
Further Information:
Amending regulation
Proposal Number:
22-ENDM011
Posting Date:
Summary of Proposal:
Contact Address:
77 Grenville St, Toronto, ON, M7A 2C1
Effective Date:
January 27, 2022
Decision:
Approved