Ontario’s new Minister of Energy, Northern Development and Mines Greg Rickford announced today that Ontario’s new Conservative government would cancel and wind down 758 renewable energy contracts. The Minister stated that this decision would result in Ontario ratepayers benefitting from $790 million in savings “even after all costs are accounted for” but did not provide information as to how this amount was determined. The government does specify that it intends to introduce a legislative amendment that, if passed, will “protect hydro consumers from any costs incurred from the cancellation.”

A Minister’s Directive dated July 5, 2018 and posted to the IESO website today (the “Directive”) directs the IESO to immediately take all steps necessary to: (i) wind down all FIT 2, 3, 4 and 5 contracts where the IESO has not issued a Notice to Proceed; and (ii) wind down all LRP I contracts where the IESO has not notified the LRP I proponent that all Key Development Milestones have been met. The Directive amends or revokes previous ministerial directions to the extent that these earlier directives are inconsistent with the Directive.

In support of the direction to wind down the renewable energy contracts, the Directive states that the IESO’s recent system planning work “indicates that Ontario’s current contracted and rate regulated electricity resources are sufficient to satisfy or exceed forecasted provincial needs for the near term and that there are other means of meeting future energy supply and capacity needs at materially lower costs than long-term contracts that lock in the prices paid for these resources.” The Directive further states that the IESO’s market renewal process is expected to provide market signals for future investments required in Ontario’s electricity system, “including opportunities to leverage renewable energy resources in a way that ensures value” to Ontario ratepayers and the electricity system.