Regulation - LGIC

2-year Limitation Period for Certain Statutory and Regulatory Entitlements (aligns with Independent Electricity System Operator (IESO) Replacement of Settlement System (RSS) project).

Regulation Number(s):
O. Reg. 197/17
O. Reg. 363/16
O. Reg. 330/09
O. Reg. 30/22
O. Reg. 429/04
O. Reg. 442/01
O. Reg. 14/18
O. Reg. 198/17
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998; Ontario Energy Board Act, 1998; Limitations Act, 2002; and Ontario Fair Hydro Plan Act, 2017
Summary of Proposal:
The proposed regulatory amendments are designed to align with IESO's Replacement of Settlement System (RSS) project. The IESO is making changes to its settlement system through the RSS project in support of the ongoing Market Renewal initiative. As part of the settlement system changes, IESO has recommended including a two-year limitation on its settlement adjustments.

To support these changes, the Ministry of Energy is proposing regulatory amendments to the above-noted regulations, and the bringing forward of a new Regulation under the Electricity Act, 1998, which, if approved, would create a statutory-based limitation period of 2 years beyond which IESO, market participants, consumers and other persons could no longer pursue entitlements (payments, adjustments, amounts, etc.) arising from electricity rate mitigation programs or other amounts established by legislation and regulations.

Establishing a limitation period would address a gap between the open-ended time period for settlement adjustments to market participants and consumers and the limitations faced by local distribution companies (LDCs) in settling such adjustments with electricity consumers. Implementing a two-year limit on these statutory entitlements would increase predictability and provide greater cost certainty to consumers, market participants, local distribution companies (LDCs), IESO and the government. This proposed change is also expected to reduce administrative time/cost for market participants, LDCs, large consumers, and IESO.

To support these changes, under the Fall 2021 Red Tape legislation, the Supporting People and Businesses Act, 2021 (Schedule 9), which received Royal Assent on December 2nd, 2021, amended the Electricity Act, 1998 (EA) and made consequential amendments to the Ontario Energy Board Act, 1998 (OEBA), the Limitations Act, 2002 and the Ontario Fair Hydro Plan Act, 2017 (OFHPA). These legislative changes were previously consulted through a regulatory posting which can be found here.

Further implementation of the initiative requires the making of a new Regulation, if approved, under the new provisions of the Electricity Act, 1998 that provides for the two-year limitation period, namely section 36.1.1, as well as amendments to associated regulations as listed to implement the two-year limitation period for specific charges that arise under regulation. Programs affected by these regulations include the First Nations Delivery Credit (FNDC), Ontario Rebate for Electricity Consumers (ORECA), Distribution Rate Protection (DRP), Global Adjustment (GA), Rural and Remote Electricity Rate Protection (RRRP), Ontario Electricity Support Program (OESP), and the Ontario Fair Hydro Plan (OFHPA), as it then was.

IESO is responsible for making changes to its market rules for market-related charges and intends to make these changes in time for the planned RSS launch in September 2023. However, to give IESO regulatory clarity and to ensure that IESO, distributors and all market participants impacted by the proposed legislative changes have ample notice, the proposed amendments, if approved, would come into force on July 1, 2023.
Analysis of Regulatory Impact:
This proposal is designed to align with revisions to the Independent Electricity System Operators market rules (part of its Replacement of Settlement System (RSS) project), which are to include the provision of a similar two-year limitation period for amounts arising under the market rules.

ENERGY's proposal supports fairness, regulatory certainty and consistent treatment for consumers across the province while reducing the administrative burden for LDCs, IESO and the government.. In the absence of these regulatory amendments, these claims could continue indefinitely.

While eligible consumers have already had a number of years to identify their eligibility and therefore ample time to identify and claim their entitlement ENERGY's proposal would prevent consumers that were eligible for these entitlements but have yet to receive it from coming forward with a claim for retroactive rate relief beyond the stipulated two-year limitation period. If the regulation is approved. ENERGY expects this to be a small subset of consumers.

These proposed amendments do not relate to payments arising under IESO contracts which contain different dispute-related limitation periods. They would also not affect payments that arise under court/arbitration orders, or the Ontario Energy Board's (OEB) or IESO compliance processes.
Further Information:
Proposal Number:
Posting Date:
April 19, 2023
Comments Due Date:
June 5, 2023
Contact Address:
7th Floor, 77 Grenville St