Regulation - LGIC

Advancing Innovation in Ontario's Energy Sector

Regulation Number(s):
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Proposal:
The Ministry of Energy (ENERGY) is proposing amendments to the Ontario Energy Board Act, 1998 (OEBA) that, if approved, would allow the Ontario Energy Board (OEB) to exempt proponents that wish to undertake innovative projects from various license requirements on a time-limited basis. These changes would facilitate proponents in running innovative pilots or demonstration projects. These projects can have the potential to benefit customers, the energy sector, and the broader economy and to support the province's energy transition to a more sustainable and renewable energy future.

Under the OEBA, one of the OEB's guiding objectives is "to facilitate innovation in the electricity sector." Through various forums, stakeholders have identified specific barriers to testing innovative pilot or demonstration projects that show clear potential to support cost reduction or decarbonization objectives. Under the existing legislative framework, a license from the OEB is generally required to engage in activities such as electricity distribution, energy retailing and unit sub-metering. ENERGY is proposing legislative amendments that would enable the OEB to make orders granting exemptions from the requirement to hold one or more of the following:

• An electricity distribution licence
• A unit-sub metering licence
• An energy retailer licence
• A gas marketing licence, and
• An electricity wholesaler licence.

These changes would enable proponents, if granted an exemption, to move forward in running innovative pilots or demonstration projects.

If these amendments are approved, ENERGY intends to propose further amendments to regulations under various legislation, including the OEBA and the Energy Consumer Protection Act, 2010, which, if approved, would exempt those who have received a license exemption from other statutory requirements.

These amendments would assist the OEB to facilitate innovation in the energy sector. These amendments would help to ensure that Ontario's energy sector transforms into a digitalized, decentralized and decarbonized system which would align with the global energy sector transformation taking place.
Analysis of Regulatory Impact:
The Ministry's regulatory impact assessment of the proposed OEBA amendments did not identify compliance costs for regulated entities. No additional costs are expected to arise from these amendments.

The proposed changes, if approved, would make it less burdensome for proponents to pilot innovative projects as they would not need to apply for a OEB licence or abide by the conditions set out in them. For a five-year term, one of the benefits a small business could see is a saving of $4,200 in licensing fees.

These amendments may encourage local projects that could provide non-traditional means of meeting energy demand while promoting entrepreneurship and employment. Such projects could also improve power quality and reliability in more remote/rural parts of the province. There is also the potential of projects from Indigenous communities, either wholly owned or in partnership with innovators/utilities, further promoting employment and economic development.

Responses to this posting that describe the qualitative or quantitative impact of this proposal will inform a final regulatory impact analysis.
Further Information:
Proposal Number:
Posting Date:
April 3, 2023
Comments Due Date:
May 18, 2023
Contact Address:
Ministry of Energy
77 Grenville Street, 6th Floor, Toronto ON M7A 2C1