On February 23, 2009, Bill 150 – Green Energy and Green Economy Act, 2009 (Bill 150) was introduced in the Ontario legislature. This proposed legislation contains a number of objectives related to the development of renewable energy projects and energy conservation measures, which will be implemented through a new Green Energy Act and substantial amendments to a number of other acts. The development of renewable energy projects is streamlined through the introduction of a new permitting process in the Environmental Protection Act (the EPA), along with authority under the Electricity Act, 1998 for the Minister of Energy and Infrastructure to direct the Ontario Power Authority (the OPA) to develop a feed-in tariff program for the procurement of renewable generation. The conservation measures include new obligations on public agencies to develop conservation and demand management programs, the elimination of the Conservation Bureau as a separate entity within the OPA, and a number of other measures related to energy efficiency of buildings and appliances.

Streamlined Permitting Process

The most significant amendment is a new regime within the EPA relating to renewable energy approvals. Under this new approach, renewable energy projects are exempt from certificate of approval requirements under the EPA, as well as certain permits under the Ontario Water Resources Act, which would otherwise have been required for the development or operation of such facilities. All of these permits and approvals that would otherwise be required for a renewable generation project have been replaced by the “Renewable Energy Approval” under the EPA.

As a result of Bill 150’s proposed amendments to the Planning Act, land use bylaws and official plans would also cease to apply to renewable energy generation projects. Instead, these will be dealt with at the Renewable Energy Approval stage, and under new provisions in the EPA that allow the Province to establish uniform regulations across Ontario, relating to planning, design, siting, buffer zones, and other matters previously dealt with on a municipality-by-municipality basis. While the transition process to the new regime may be uncertain for projects that are in the midst of municipal permitting processes, this should provide greater consistency and certainty for developers going forward.

The policies that are to be considered in deciding whether to issue a Renewable Energy Approval remain to be prescribed by regulation; however, in order to appeal a Renewable Energy Approval, the onus is on the appellant to demonstrate that the renewable energy project “will cause serious and irreversible harm to plant life, animal life, human health or safety or the natural environment”. This limited appeal right is combined with a requirement for the appeal to be completed within a time period to be prescribed, the result of which is to protect projects from “death by delay”.

It is particularly noteworthy that Bill 150 does not directly implement any changes to the Environmental Assessment Act, yet in the proposed Renewable Energy part of the EPA (Part V.0.1), the word “environment” has been given the broader meaning that it takes on in the Environmental Assessment Act, which includes social and economic factors. Furthermore, under the appeal rights section of the EPA of Bill 150, “environment” is narrowed to the “natural environment”. This may be a signal that the Province is intending to further consolidate approvals under the Environmental Assessment Act and appeal rights under the Environmental Bill of Rights, 1993 for renewable energy projects into this new Renewable Energy Approval process under the EPA. It is not yet clear how such a consolidation would work with upcoming federal initiatives to avoid duplication between federal and provincial environmental assessments. In any case, while Bill 150 does not directly impact any federal permitting requirements, it establishes a Renewable Energy Facilitation Office to, among other things, work with proponents of renewable energy projects to alert them to potential requirements imposed by the federal government.

Development of a Feed-in Tariff Program

In accordance with the amendments to the Electricity Act, 1998, the Minister of Energy and Infrastructure may direct the OPA to develop a feed-in tariff program to provide for long-term rates for energy produced by renewable resources, and to establish goals in that program relating to participation by aboriginal peoples and involvement by local community members. As well, the Minister has the ability to direct the OPA to establish goals related to domestic content under the feed-in tariff.

A renewable energy generation facility under any feed-in tariff program may benefit from the new approach to connecting to the transmission and distribution networks, which provides priority access for renewable generation and an obligation on transmitters and distributors to connect such facilities, subject only to technical and economic requirements, or other requirements as may be prescribed by regulation, market rules or codes or orders issued by the Ontario Energy Board. These requirements will play an important role in Ontario as connection capacity is already constrained in certain areas.

Conservation and Demand Management

In addition to the programs related to the development of renewable energy resources, Bill 150 makes a number of changes to the framework for conservation and demand management initiatives in the Province. The Conservation Bureau has been eliminated as a separate entity within the OPA, to be replaced in part by expanded objectives for the Ministry of Energy and Infrastructure and the Ontario Energy Board, whose new responsibilities include developing a “smart grid”, as well as new reporting obligations for the Environmental Commissioner under the Environmental Bill of Rights, 1993. In connection with the Ministry’s expanded objectives, there are new powers for it to recover costs incurred in this regard from the electricity rate-base through the Ontario Energy Board.

A Major Change in Ontario’s Regulatory Approach

While a significant number of details relating to the implementation of Bill 150 remain to be set out in regulations, and further legislative amendments are possible, it is clear that this proposed legislation represents a major change in Ontario’s regulatory approach to the development of green energy projects and their connection to the province’s distribution and transmission systems.