The Ontario government is once again thinking about its long term plans for electricity supply in the province. Continuing a strategy that began with the suspension of the 2007 Integrated Power System Plan hearing, the government appears to be taking a more "hands on" approach to supply mix planning, perhaps at the expense of independent oversight by the Ontario Energy Board ("OEB").
In a press release date September 20, the government calls upon Ontarians to provide their input into a new Long-Term Energy Plan. First introduced in 2006, the Long-Term Energy Plan "will help guide the province as it continues to build a reliable, clean and cost-effective electricity system for Ontario families now and for our children and grandchildren into the future." The Ministry of Energy and Infrastructure ("MEI") is currently administering an online slideshow and survey to solicit public feedback for the plan.
As explained in a separate press release, the government will use the public feedback to update the Long-Term Energy Plan, which it will ultimately transform into a Supply Mix Directive to the Ontario Power Authority ("OPA"). The OPA will then submit an Integrated Power System Plan ("IPSP") that implements the Supply Mix Directive to the OEB for approval. The approved IPSP will form the basis for the OPA's generation procurement and conservation and demand management activities going forward.
In fact, the OPA was due to submit an IPSP to the OEB for approval this year. IPSPs were previously updated on a 3-year cycle. The last IPSP was submitted in 2007, but was never approved because then Minister of Energy George Smitherman suspended the IPSP hearing to introduce the Green Energy Act. The OPA has therefore been functioning for 3 years without an IPSP, instead focusing primarily on implementing the Green Energy Act's Feed-in Tariff, phasing out coal, and running RFPs for gas-fired generating stations in GTA West and York region.
The OPA will likely continue to function without an IPSP for at least another year or two, as the public consultations, IPSP drafting and OEB hearing processes contemplated above will require significant time and effort.
Recognizing that it will not be filing an IPSP this year, the OPA has asked for an amendment to its license from the OEB to remove the requirement to file IPSPs every 3 years. Instead, the OPA proposes to file IPSPs "as frequently as required by regulation", which effectively means as frequently as they are told to do so by the government.
The OPA is also asking to amend the part of its license dealing with procurement. Instead of carrying out procurement in accordance with its approved IPSP, the OPA wishes to "undertake appropriate procurement processes for managing electricity supply, capacity and demand as directed by the Minister in accordance with the Electricity Act, or in accordance with an approved integrated power system plan and approved procurement processes." It also wants to strike the requirement to seek the OEB's approval of its procurement process or amendments thereto. Again, these changes would permit the government to steer the OPA's procurement processes with little to no oversight by the OEB. A mark-up of the changes requested by the OEB may be found in Exhibit A-1-8 of its License Renewal Application.
The government's announcements and the OPA's requests for amendments to its license suggest that the MEI will continue the "hands on" approach to Ontario's supply mix that George Smitherman began with the suspension of the last IPSP hearing and introduction of the Green Energy Act. In contrast, the OEB will be left, at least temporarily, with less power to oversee the planning of the electricity sector.