Regulation - LGIC

Extending Exemptions for Legacy Clean Energy Credit Contracts

Regulation Number(s):
O.Reg. 160/99
Instrument Type:
Regulation - LGIC
Bill or Act:
Electricity Act, 1998
Summary of Decision:
Ontario Regulation 160/99 has been amended to revive and extend a lapsed regulatory exemption for legacy Clean Energy Credit (CEC) legacy contracts (that pre-date the launch of Ontario CEC registry). The amendment, effective March 1, 2024, exempts holders of legacy CEC contracts from the requirement to complete all CEC transactions through the Ontario registry and to match CEC sales against Ontario electricity load. This amendment was implemented so these contracts are not negatively impacted by legislative restrictions that could not have reasonably been foreseen when the contracts were signed. Currently, less than 1% of the generation produced in 2023 is covered by a legacy CEC contract. The exemption is in effect until December 31, 2026, to align with Ontario Power Generation Inc.'s (OPG's) legacy CEC sales commitments.
Analysis of Regulatory Impact:
No new administrative costs are expected for business under the proposal.
Further Information:
Proposal Number:
Posting Date:
December 20, 2023
Summary of Proposal:
In March 2023 Ontario launched a Clean Energy Credit (CEC) registry to leverage its world-class clean electricity grid to boost competitiveness and attract jobs by helping businesses meet their environmental and sustainability goals.

A CEC registry provides businesses with a tool to meet these goals by demonstrating that their electricity has been sourced from clean resources, such as nuclear power, hydroelectric, wind, solar, and bioenergy.

Proceeds from the sale of CECs will be directed to the government's Future Clean Electricity Fund. This new fund will help keep costs down for electricity ratepayers by supporting the development of new clean electricity projects as the province strengthens our grid to meet the demands of a growing population and economy, as well as the electrification of transportation and industry. The Future Clean Electricity Fund will help to preserve and grow the province's clean energy advantage and help attract new investments in electric vehicle and battery manufacturing, clean steel and other sectors.

The CEC registry was enabled through an amendment to the Electricity Act, 1998 (the Act). Under the current statutory framework, to facilitate a valid transfer and retirement of CECs, buyers must register on the CEC registry and sellers are required to submit information about environmental attributes.

Ontario Regulation 160/99 under the Act exempts CEC contracts entered before January 1, 2023, from certain legislative requirements governing CECs. The exemptions remove the need to register on Ontario's CEC registry as a seller (transferor) or buyer (transferee), use the Ontario registry for transfers, or for the buyer to be a registered load customer in Ontario. These exemptions are due to expire at the end of 2023 and apply to a small subset of contracts.

These exemptions were put in place to prevent legacy CEC contracts that were entered into before January 1, 2023 from being negatively impacted by new legislative restrictions that could not have been reasonably foreseen at the time the contract was entered into.
The Ministry of Energy is proposing to extend the exemptions for these legacy contracts until they expire in 2027. The ministry also intends to rely on and maintain the existing reporting provisions in the Act, to continue to provide transparent data about all transactions in Ontario.

Recognizing that transactions from these legacy contracts would be processed transparently, though separately, from the Ontario registry, the proposed exemption would, if approved, avoid the potential risk of non-compliant activity on the Ontario registry since contracts pre-dating the Ontario registry are based on different eligibility requirements.
Currently, less than 1% of the generation produced in 2022, is covered by a legacy CEC contract.

The proposal is designed to maintain transparency and accountability for contracts that pre-date the launch of the registry.
Contact Address:
77 Grenville St, 5th floor
Toronto, Ontario M7A 2C1
Effective Date:
March 1, 2024