Ontario’s Ministry of Energy will soon begin the process of drafting a new and revised Long Term Energy Plan (LTEP). This energy planning process will be significantly affected by two recent developments at Queen’s Park: (i) the recent passage of the Energy Statute Law Amendment Act, 2016 ( Bill 135 ) and (ii) Ontario’s recently introduced Climate Change Action Plan (CCAP).
The New LTEP Reel:
Bill 135, The Energy Statute Law Amendment Act, 2016, was enacted by the Ontario Legislature on June 2nd, 2016. This legislation codifies the process to be followed by the government of Ontario as it proceeds to establish its long-term energy plans. Among the provisions of Bill 135 are requirements that there be public and stakeholder consultations and that there be made available at the beginning of these public consultations ‘ technical data ‘ which make plain the current state of generating and transmission resources available to the province as it confronts its energy future. Bill 135 changes significantly the long-term energy planning process as established under previous legislation – the Electricity Act – which gave much more of the actual planning responsibility to the Ontario Power Authority and the Ontario Energy Board. Under the recently-passed Bill 135, these agencies play a more supportive role largely focused on implementing the next long-term energy plan.
As a result, the IESO will adopt a more ancillary role in preparing future long-term energy plans. The IESO will supplement the contents of the LTEP by producing technical reports for the Minister of Energy on specific adequacy and reliability issues. The IESO, along with the OEB, will also be responsible for submitting implementation plans to support the Minister’s energy requirements.
In addition, Bill 135 does require the Minister of Energy to consult the appropriate groups and persons in order to prepare the Long-Term Energy Plans—and to adequately consider stakeholder feedback.
In that regard, the Ministry of Energy published a news release indicating that it plans to begin public engagement later this year. We anticipate that LTEP consultation will begin in earnest after Canada’s Labour Day holiday and that the 2016 LTEP will emerge from this consultation process in Q2 2017. The document which will lead off LTEP discussions is the next quarterly edition of the IESO’s “Ontario Planning Outlook” (OPO)—likely to be released during the summer months.
By taking responsibility for long-term energy planning directly into the Ministry of Energy, Ontario is bringing the process closer to the political realm. This, arguably, makes some sense as there is clearly a need for high level, whole-picture energy + economy planning to take place in order to position Canada’s industrial heartland for the advent of widespread DG adoption and the coming post-carbon economy -not to mention the continued consolidation of local distribution companies into viable scale commercial entities and the gradual retirement of non-renewable generating assets.
With the CCAP Motif:
The next LTEP will clearly have to reflect the provincial government’s CCAP and, given the wide-ranging impact of the CCAP, one can assume that the next round of consultations regarding the LTEP will certainly be quite focussed on central components of that Action Plan. As readers will know, Ontario’s CCAP was released on June 8, 2016, after much anticipation.
The CCAP lays out Ontario’s climate strategy for the next five years and lists a series of policies and actions areas—each with a price tag attached. It includes grants and rebates to retrofit buildings and help industrial businesses cut emissions, electric vehicle incentives, clean technologies research, and funding for the GO regional transportation network.
Natural gas has become an important point of contention arising from this Plan. In Ontario, 70 per cent of homes are heated by natural gas and, overall, natural gas accounts for 25 to 30 per cent of the province’s energy supply mix.
The exact details of the Plan are still largely to be determined –however, what is clear is that carbon-based generating solutions are under threat and there will be increased emphasis on at-point-of-demand generation through the support of small-scale renewables. Coal is out. Gas is under fire.
The general direction of the provincial government away from carbon-based energy solutions will also drive the LTEP—although how much the latter will be influenced by the former will depend on the outcome of consultations with the Energy, Economic Development and Environment and Climate Change Ministers as well as with the broader public.
Because the electricity sector impacts virtually every industry in the province, stakeholders will want to engage early in the review of the LTEP process. The addition of the province’s climate change mitigation strategies on top of what was already a complex and fraught process—if you use energy, the CCAP effects you—will bring new stakeholders to the table and result in impacts far beyond the traditional electricity sector players.