On February 9, 2011, the Ontario Power Authority (the “OPA”) announced two rule changes to the feed-in tariff program (the “FIT Program”) and micro-feed-in tariff program (the “micro-FIT Program”). The rule changes will affect all applications made under the micro-FIT Program and capacity allocation exempt (“CAE”) applications made under the FIT Program. CAE facilities include capacity allocation exempt small embedded generation facilities and micro-embedded generation facilities.
The rule changes come in response to an overwhelming number of applications received under the FIT Program and micro-FIT Program. For example, on the micro-FIT side to date, 3700 micro-FIT projects have been connected, with an additional 2,500 having met the OPA eligibility requirements. In some areas, micro-FIT and CAE FIT applications are outpacing needed upgrades required to connect projects to the distribution system. The rule changes aim to improve the application processes and better align projects with available connection capacity by ensuring that any potential connection issues are identified as early as possible in the application and contracting processes. Where connection issues are identified, this will allow the government to focus on these areas by making the necessary upgrades to the distribution system to enable further connections where feasible.
micro-FIT Rule Change
Version 1.6 of the micro-FIT Rules now requires all microFIT applicants to obtain an Offer to Connect from their local distribution company (“LDC”) before the OPA will issue a conditional micro-FIT offer. Previously, applicants obtained an Offer to Connect after receiving a conditional offer from the OPA.
FIT Rule Change
Under Version 1.4 of the FIT Rules, CAE applicants are now required to satisfy an additional eligibility criterion. A CAE applicant will only be granted a FIT contract after the OPA has determined that the applicant’s CAE facility is capable of being connected at the proposed connection point without negatively affecting the distribution system. Within the materials provided by the OPA in connection with the changes to the FIT Rules, there is no clarity as to what will be determined by the OPA as having a negative impact on the distribution system.
Once the OPA has determined that a CAE facility is capable of connecting at the proposed connection point and has entered into a FIT contract with the applicant, the OPA will require the applicant to obtain a Connection Impact Assessment from their LDC.
In addition, the OPA will offer to amend the contracts of all FIT and micro-FIT proponents who received contracts during the FIT and micro-FIT launch periods so that applicants can elect to extend their Commercial Operation Date (COD) by up to one year.
Both rule changes are effective immediately and apply to all micro-FIT and CAE FIT applications submitted on or after December 8, 2010.
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