Act
Proposed Change to Support Building Homes and Transit Faster and Support Electrification by amending the Ontario Energy Board Act, 1998 Requirement for a Leave to Construct
Regulation Number(s):
O.Reg. 328/03
Instrument Type:
Act
Bill or Act:
Ontario Energy Board Act, 1998
Summary of Proposal:
In 2022, the government modernized the Leave-to-Construct (LTC) process for electricity transmission projects. Following this modernization, additional amendments are proposed to the Ontario Energy Board Act, 1998 (OEBA) to allow government to prescribe conditions in regulation to fast-track energy infrastructure project (hydrocarbon and electricity lines) through the Ontario Energy Board's (OEB) LTC process. If passed, government may propose regulations to exempt energy projects costing between $2 million and $10 million from LTC, if duty-to-consult (DTC) is met. Energy projects of this size often support transit projects or connecting residential properties. This approach would support Ontario's commitments to reduce regulatory burden, provide a reliable and cost-effective energy supply and preserve existing opportunities for Indigenous communities to be consulted and OEB consideration of the Crown's DTC.
Currently, the OEBA allows the OEB to exempt any electricity transmission and distribution lines or hydrocarbon pipelines, from the requirements in the OEBA to obtain LTC.
This posting seeks to receive feedback on a proposed approach to amend the OEBA to allow the government to prescribe certain additional conditions in regulation for exemption from LTC requirements for energy projects. Such exemptions would seek to support the government-wide efforts to address timelines related to transit project construction and the need for additional housing stock across the province. The proposed amendments to the OEBA would also allow the government to address transition issues, if any, for those LTC applications that are in progress that may be impacted by any conditions for exemption to be set out in regulation.
While the proposed amendment would likely improve timelines for new homes and transit being built through a fast-tracked LTC process, it would have no impacts on the environment. Any exemption from LTC would still require all project proponents to obtain all relevant permits and approvals, and participate in all other related processes to ensure environmental, technical and safety requirements from Ontario ministries, authorities and municipalities are met before proceeding with construction.
If the proposed amendment to the OEBA is passed, the government may consider proposing regulations that would set out requirements exempting energy projects, that are projected to cost between $2 million and $10 million, from LTC. Under this proposal, such exemption would entail an exemption application to the OEB and be subject to an OEB decision as to whether the exemption would be granted.
Indigenous communities have identified through previous consultation concerns with increasing the LTC cost threshold as it could remove existing opportunities for Indigenous consultation. Therefore, the scope of the OEB's determination of the exemption application would be limited to consideration of whether the Crown's DTC with Indigenous communities on the energy project, if triggered, has been discharged. Any such proposal for future changes to regulations would be subject to further stakeholder engagement and consultation with Indigenous communities. Such a proposal would not impact projects projected to cost more than $10 million.
Previous proposals to streamline the OEB's LTC process for electricity infrastructure were posted to the Environmental Registry in July 2021 and November 2022 and proposals to streamline the OEB's LTC process for hydrocarbon pipelines were posted to the Environmental Registry in January and July 2021. These proposals explored exempting electricity infrastructure projects exclusively funded by commercial and industrial load and generator customers and that are not expected to have a significant impact on other electricity ratepayers, and increasing the existing cost threshold for the requirement to obtain LTC for hydrocarbon pipelines, as prescribed in Ontario Regulation 328/03, from $2 million to $10 million. Several stakeholders noted that the $2 million threshold, which has not been updated in 20 years and is outdated based on current costs for small pipeline projects, especially in congested urban areas, creates undue regulatory burden, higher costs and longer timelines.
In 2023, the government moved forward with some of the consulted upon exemptions to the OEBA.
Currently, the OEBA allows the OEB to exempt any electricity transmission and distribution lines or hydrocarbon pipelines, from the requirements in the OEBA to obtain LTC.
This posting seeks to receive feedback on a proposed approach to amend the OEBA to allow the government to prescribe certain additional conditions in regulation for exemption from LTC requirements for energy projects. Such exemptions would seek to support the government-wide efforts to address timelines related to transit project construction and the need for additional housing stock across the province. The proposed amendments to the OEBA would also allow the government to address transition issues, if any, for those LTC applications that are in progress that may be impacted by any conditions for exemption to be set out in regulation.
While the proposed amendment would likely improve timelines for new homes and transit being built through a fast-tracked LTC process, it would have no impacts on the environment. Any exemption from LTC would still require all project proponents to obtain all relevant permits and approvals, and participate in all other related processes to ensure environmental, technical and safety requirements from Ontario ministries, authorities and municipalities are met before proceeding with construction.
If the proposed amendment to the OEBA is passed, the government may consider proposing regulations that would set out requirements exempting energy projects, that are projected to cost between $2 million and $10 million, from LTC. Under this proposal, such exemption would entail an exemption application to the OEB and be subject to an OEB decision as to whether the exemption would be granted.
Indigenous communities have identified through previous consultation concerns with increasing the LTC cost threshold as it could remove existing opportunities for Indigenous consultation. Therefore, the scope of the OEB's determination of the exemption application would be limited to consideration of whether the Crown's DTC with Indigenous communities on the energy project, if triggered, has been discharged. Any such proposal for future changes to regulations would be subject to further stakeholder engagement and consultation with Indigenous communities. Such a proposal would not impact projects projected to cost more than $10 million.
Previous proposals to streamline the OEB's LTC process for electricity infrastructure were posted to the Environmental Registry in July 2021 and November 2022 and proposals to streamline the OEB's LTC process for hydrocarbon pipelines were posted to the Environmental Registry in January and July 2021. These proposals explored exempting electricity infrastructure projects exclusively funded by commercial and industrial load and generator customers and that are not expected to have a significant impact on other electricity ratepayers, and increasing the existing cost threshold for the requirement to obtain LTC for hydrocarbon pipelines, as prescribed in Ontario Regulation 328/03, from $2 million to $10 million. Several stakeholders noted that the $2 million threshold, which has not been updated in 20 years and is outdated based on current costs for small pipeline projects, especially in congested urban areas, creates undue regulatory burden, higher costs and longer timelines.
In 2023, the government moved forward with some of the consulted upon exemptions to the OEBA.
Analysis of Regulatory Impact:
No new administrative costs for business.
Further Information:
Link to Environmental Registry
Proposal Number:
23-ENDM038
Posting Date:
December 20, 2023
Comments Due Date:
February 3, 2024