Offshore
Continued From Page 13
in these arrangements.
Canada’s parliamentarians
seem intent on giving legal
effect to a policy, notwithstanding that the moratoria have
demonstrated remarkable
resiliency for almost 40 years.
The moratoria, in fact, are clear
examples of how politicians can
govern by doing nothing of
actual legal effect.
any obligations to undertake
work under those licenses, since
the government would not be
prepared to approve such activ-
ities in any case.”
Based on the panel’s analysis,
it seems clear that the federal
ban on oil and gas tanker traffic
cannot be found in any statute
or other binding legal instru-
ment. Moreover, there is no fed-
eral instrument that establishes
a ban on offshore exploration
and development. The provin-
cial government has periodically
complained but has acquiesced
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Paul Cassidy practises
environmental and energy law
at Blake, Cassels & Graydon
LLP in Vancouver.
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with energy initiatives
Two key energy policies were
recently initiated by the Ontario
government. The first concerns
changes to the Integrated Power
System Plan (IPSP), now the
Long Term Energy Plan (LTEP).
The second relates to a proposed
change to the global adjustment
cost recovery mechanism contemplated by provincial electricity regulation.
The Ontario Power Authority
(OPA) first introduced the IPSP
in June 2006. Given a 20-year
planning horizon, the purpose of
the IPSP was to identify the conservation, generation and transmission investments that are
required in Ontario over the next
three to five years, undertake the
preparatory work for the subsequent five years, and chart the
broad directions for the development of the power system in the
balance of the planning period.
In developing the IPSP, the
OPA is required by regulation to
consult with consumers, distributors, generators, transmitters and
other stakeholders that have an
interest in the electricity system
to ensure their priorities and concerns are identified in the plan.
The Electricity Act, 1998 and
regulations set out the requirements of the IPSP.
The OPA must develop and
submit a plan to the Ontario
Energy Board (OEB). The Minster of Energy has the authority to
issue directives to the OPA for the
goals to be achieved during the
period of the plan. The legislation
requires the OEB to review and
approve the IPSP in terms of its
cost effectiveness, economic prudence and compliance with directives from the Minister of Energy.
To date, the OPA has not submitted a revised IPSP to the OEB.
In September 2008, the former minister issued a directive to
the OPA to amend the IPSP to
establish new targets for the
amount and diversity of renewable energy in the supply mix.
With the introduction of the
Green Energy and Green Economy Act, 2009 and the award of
contracts under its Feed-In-Tariff
(FIT) program, a significant
amount of new renewable generation is expected to be built.
The Ontario government also
entered into agreements with a
consortium led by Samsung in
2009 to allocate specific transmission capacity to it in response
to the consortium’s commitments
to make investments in Ontario.
These developments have caused
many electricity sector participants to seek clarity in the OPA’s
planning process and status of
the IPSP.
&SABA
ZADEH
STEPHEN
ANDREWS
“
The province will
proceed with five
priority transmission
projects needed to
meet immediate
system concerns,
at a cost of two
billion dollars, to be
completed over the
next seven years.
The minister released the
government’s revised IPSP on
Nov. 23, 2010 (now the LTEP
and Supply Mix Directive). The
government has indicated that
it will issue directives to the
OPA and the OEB to move forward immediately with the
LTEP. It is expected that more
than 15,000 megawatts will
need to be renewed, added or
replaced by 2030.
Nuclear power will continue
to play a leading role in meeting
the province’s base electricity
demand with generating units at
Darlington and Bruce B to be
refurbished, and two new units to
be constructed at Darlington.
Ontario’s mid-term target for
renewable energy is set at 10,700
megawatts by 2018, and a new
price schedule is expected under
the FIT program in 2011. Over
the next 20 years, estimated capital investments for both private
and public sectors total $87 billion dollars.
The province will proceed
with five priority transmission
projects needed to meet immediate system concerns, at a cost of
two billion dollars, to be completed over the next seven years.
Transmission connections are
also to be extended into remote
First Nations communities to
replace the use of diesel fuels
and for the potential use of
renewable energy.
Once the initial comment and
review period is completed in
January, the OPA will then
develop a detailed LTEP with further consultations with affected
stakeholders. The final LTEP will
then be submitted to the OEB for
review sometime in mid-2011,
and completed by 2012.
In addition to the LTEP, the
government recently enacted a
regulation to amend the method
of global adjustment allocation
under the Electricity Act, 1998.
The global adjustment was initiated in 2005 to ensure revenue
for generators by allowing
recovery of certain electricity
and system costs from all
Ontario electricity consumers,
not otherwise recoverable from
wholesale market revenues. The
global adjustment is currently
charged or credited, on a flat
rate basis, to all electricity consumers regardless of when the
electricity was consumed.
The objective of the new regulation is to promote conservation
and demand management among
large consumers. The proposed
change includes establishing two
separate classes of electricity consumers: Class A and Class B.
Class A consumers must have an
average monthly peak demand in
excess of five megawatts over
specified periods, and must be
registered market participants
with the Independent Electricity
System Operator (IESO) or a
customer of a distributor in
Ontario. All other consumers fall
under Class B, and will continue
to be billed on a volumetric basis.
The new regulation requires
the IESO to identify five peak
hours for a given reporting period. Peak hours are defined as the
hours in which the greatest
amount of electricity was withdrawn by all market participants
from the IESO-controlled grid,
and must occur on separate days.
A peak demand factor for
each Class A consumer will be
determined based on the individual consumer’s contribution
to total system demand during
the identified peak hours. This
peak demand factor will then
be used to determine the percentage of total global adjustment to be allocated to each
Class A consumer.
The regulation came into
effect on Jan. 1.
Stephen Andrews is a government relations advisor in the
Toronto office of Borden Ladner
Gervais LLP (BLG). Saba Zadeh
is an associate in the Toronto
office of BLG and a member of the
firm’s Electricity Markets Group.
