Energy and Green Economy Act, 2009 (the “Act”). While many of the key components will be fleshed out in greater detail once regulations are promulgated, it appears that the Act will help foster the growth of renewable energy projects in Ontario.
The Act amends the mandate of the Ontario Energy Board (“OEB”). Under its previous mandate, the OEB was to:
- protect the interests of consumers with respect to price and the adequacy, reliability and quality of electricity service; and
- promote economic efficiency and cost effectiveness in the electricity industry.
Miller Thomson Analysis
Under the new mandate, the OEB will also seek to promote electricity conservation, facilitate the implementation of a “smart grid” and promote the use and generation of electricity from renewable energy sources. The change in the mandate of the OEB signals a transition from its traditional mandate of ensuring cheap, abundant electricity for consumers to a more complex and nuanced regime. There is the possibility that different aspects of the new mandate will come into conflict. For example, protecting the interest of consumers with respect to price may clash with the goal of promoting the use of renewable energy which will likely be more expensive to generate than traditional sources at least initially.
The Act also seeks to streamline the approval process for renewable energy projects. Under the new regime, renewable energy projects are exempted from various municipal and provincial approval processes. Once an approval is granted to a renewable energy project, the only appeal avenue available to an opponent of the project is through the Environmental Review Tribunal. There, the opponent of the renewable energy project must show that approval of the project will cause serious harm to human health or serious and irreversible harm to plant life, animal life or the natural environment.
The Act also seeks to foster the development of renewable energy projects by implementing a feed-in tariff program. Feed-in tariffs are incentive structures designed to encourage the use of renewable energy by obligating utilities to purchase renewable energy at above market rates. Under the Act, an approved renewable energy project will be granted a right to connect and priority access to existing transmission/distribution systems.
The Act also helps pave the way for the establishment of a “smart grid” in the province. A “smart grid” is essentially a modernization of the existing electrical grid using technologies to track how and when consumers are using electricity and ultimately to allow for variable electricity rates depending on the time of use.
Finally, the Act attempts to encourage energy conservation by granting broad authorization to designate certain goods, services and technologies as promoting energy conservation and placing restrictions on the sale and lease of products which do not meet prescribed energy efficiency standards. The Act also requires sellers of real property to provide energy audit results to potential purchasers, unless the purchaser waives that requirement.