Regulation - LGIC

Further Reducing Barriers to Innovation

Regulation Number(s):
O.Reg. 161/99 (Definitions and Exemptions), amended by O. Reg. 376/23
O.Reg. 160/99 (Definitions and Exemptions), amended by O. Reg. 375/23
O.Reg. 389/10 (General), amended by O. Reg. 377/23
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario Energy Board Act, 1998 (OEBA) Electricity Act, 1998 (EA) Energy Consumer Protection Act, 2010 (ECPA)
Summary of Decision:
Following the passage of the Less Red Tape, Stronger Economy Act, 2023, the Ministry of Energy (ENERGY) proposed additional time-limited relief from legislative requirements for proponents to support the licence exemption powers of the OEB. These amendments, along with the OEB's new licence exemption powers, now enable proponents to run innovative pilots or demonstration projects that could benefit customers, the energy sector, and the broader economy and will support the province's energy transition to a more sustainable and clean energy future.

The OEB is now accepting applications for exemptions. A link to their Innovation Sandbox website and exemption forms are included on this page.
Analysis of Regulatory Impact:
The Ministry's final regulatory impact assessment did not identify compliance costs for regulated entities. No additional costs are expected to arise from these amendments. Along with the OEB's authority to grant licence exemptions that is already in place, these changes will reduce potential obstacles and regulatory burden to the deployment of innovative pilots or demonstration projects.

The innovative projects facilitated by these amendments in support of the licence exemption could reveal value for residential customers by allowing them to participate in the energy sector. They 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 for projects from Indigenous communities, either wholly owned or in partnership with innovators/utilities, further promoting employment and economic development.

Further Information:
Proposal Number:
Posting Date:
September 27, 2023
Summary of Proposal:
The Government of Ontario is committed to a safe, reliable, and affordable energy supply across the province. This includes fostering innovation to create opportunities to generate, store, deliver, and use electricity more efficiently.

As a result of amendments to the Ontario Energy Board Act, 1998 (OEBA), which received Royal Assent as part of the Less Red Tape, Stronger Economy Act, 2023, the Ontario Energy Board (OEB) now has the power to make orders that temporarily waive certain licensing requirements for innovative pilots or demonstration projects to facilitate innovation in the energy sector.

The Ontario Energy Board (OEB) has an objective to "facilitate innovation in the electricity sector" under s. 1 of the Ontario Energy Board Act, 1998 (OEBA). To support that mandate, the Government introduced legislative amendments to the OEBA that took effect in Spring 2023, which authorize the OEB to make orders exempting proponents from certain licence requirements for the purpose of carrying out innovative time-limited pilots or demonstration projects. As part of their ongoing commitment to support innovation, ENERGY and the OEB identified several legislative requirements from which an exemption would also be appropriate for those who are granted licence exemptions by the OEB. These exemptions will support the OEB's authority to grant certain licence exemptions by eliminating obligations that may not be relevant to a pilot or demonstration project and could have been a disincentive to the deployment of innovative projects in the energy sector.

These regulatory amendments exempt those who are granted a time-limited licence exemption by the OEB from certain provisions in the OEBA, the Electricity Act, 1998 (EA), and the Energy Consumer Protection Act, 2010 (ECPA), including:

1. Sections 71 (restriction on business activity), 72 (separate accounts), 78 (rates), 80 (prohibition, generation by transmitters or distributors) and 86 (change in ownership or control of systems) of the OEBA;
2. Sections 26 (non-discriminatory access), 28 (distributor's obligation to connect), 53.16 (obligations re: installing metering), and 53.18 (discretionary metering activities) of the EA.

The exemptions will apply for the limited duration and purpose of carrying out the pilot or demonstration project contemplated in a licensing exemption order granted by the OEB. Taken together, these provisions ensure that distributors operate in the interest of their customers and the electricity sector. These provisions apply to all distributors; however, distributors that are exempt from licensing by regulation are currently also exempt from a number of these provisions.

The Government also approved exemptions to provisions under Part II of the ECPA. Part II of the ECPA seeks to protect consumers from unfair practices by electricity retailers and gas marketers. The OEB will ensure that customers involved in an innovative project remain protected from unfair practices.

These changes will facilitate the implementation of innovative projects, which could help to ensure Ontario's electricity system continues to be one of the cleanest in the world, while also providing the reliable and affordable electricity necessary to attract new investments and continue strong economic growth in the province.

The OEB is now accepting applications for exemptions. A link to their Innovation Sandbox website and exemption forms are included on this page.
Contact Address:
Distribution Performance and Modernization, Ministry of Energy
77 Grenville Street, 6th Floor, Toronto ON M7A 2C1
Effective Date:
January 1, 2024