On October 30, 2008, the Ontario Energy Board (OEB) issued a Notice of Proposal recommending amendments to the Transmission System Code (TSC).
The proposed amendments would recognize a new category of transmission facilities - "enabler facilities" - that are necessary to meet government policy aimed at facilitating increased renewable resource development. Similar to views expressed by regulators in California and Texas, the OEB acknowledged that the TSC's current customer-pays treatment for "connection facilities" would inhibit development of new renewable resources, many of which are small in size, will operate intermittently and are located significant distances from the transmission grid.
In its supporting Background Paper, the OEB considered three alternative cost approaches to the status quo. The OEB ultimately settled on the "hybrid option" whereby initial enabler facility costs would be pooled temporarily and included as part of a transmitter's rate base, with generators subsequently making pro-rata capital contributions as and when they became connected (any unsubscribed portion of the enabler facilities would remain in the transmitter's rate base.) Notably, the OEB recommended that the hybrid option should apply not only to enabler facilities included in an OEB-approved integrated power system plan (IPSP), but also to those enabler facilities associated with renewable resources being developed pursuant to government directive. As well, the OEB indicated that it would be necessary to devise a "transmitter designation process" whereby the OEB, on application by a transmitter or on its own motion, would conduct a proceeding to designate a transmitter, including hearing and selecting among alternative or competing proposals for developing and constructing enabler facilities.
The OEB has given interested parties until December 1, 2008 to make written submissions on the proposed amendments