As Ontario moves toward meeting its Climate Change Action Plan objectives, the conversion of fuel sources in the transportation sector is a key initiative. Within this sector, Ontario has just promised the creation of a province-wide network of electric vehicle (EV) charging stations. In a proactive move, the Ontario Energy Board (OEB) has issued a staff bulletin opinionating that EV charging is not currently subject to its jurisdiction as it is neither electricity distribution nor electricity retailing, as legislatively defined.
While Staff’s views are expressly not binding on the decision makers at the Board in any proceeding before them, they are formulated and released in consultation with Board members and generally can be assumed to reflect the “institutional” views of the regulator (and thus the views of the Board members, subject to an evidentiary record demanding an alternative approach). That is, while they are not guarantees, these Bulletins are strongly indicative of how the Board would approach an adjudication on the topic. (These are akin to interpretation bulletins put out by taxing authorities or securities regulators.)
In the bulletin just released OEB Staff has concluded that:
- Ownership and operation of EV charging stations, and the selling of EV charging services, are not licensable activities under Ontario electricity regulatory legislation, and thus are not subject to any OEB administered compliance obligations (which compliance obligations would include prescribed pricing mechanisms).
- EV charging facilities are not “distribution facilities”, as they don’t provide electricity distribution for load types other than EVs. (As distinct from conventional electricity distribution activities which provide electricity services that can be used by the consumer for a variety of end uses.)
- Providers of EV charging services do not sell electricity as a commodity. Rather they provide a complete “vehicle refueling” service. (Staff further notes that many different entities can, and do, offer this service, under a wide variety of possible business models, thus providing consumers with adequate choice for EV charging services. Where there is competition, there is a less compelling case for regulation.)
The Bulletin also opines that licensed electricity distributors can own and operate EV charging facilities through their regulated distribution entities in Ontario, provided that the services offered by the distributor support “the management of load in keeping with the Government’s goals for electricity conservation”. This proviso applies a specific exemption in Ontario law to a general restriction on permitted business activities for electricity distributors . In general, electricity distributors are restricted to owning and operating distribution facilities; however, services offered for the purposes of load management, they are permitted.
We now have one of the major energy regulators in the country providing a clear (institutional, though not jurisprudential) view on ownership and operation of EV facilities. The reasoning underpinning the Staff opinion, as summarized above, seems sound and will be instructive to other energy regulators in Canada considering these issues. (though careful consideration is warranted of how EV charging services might be impacted by the particular legislative structure for electricity regulation in each jurisdiction).
In Ontario, it will be important to monitor the impact on the EV charging services market of the potential expansion into that market of electricity distributors. pursuant to the “load management” proviso.