Ontario Energy Trends: 2018 in Review

This post offers a succinct review of some of the most trending developments in energy sector for the year 2018. The most trending development of 2018 in Ontario and Canada was the cancellation of the "cap and trade" program by the new Ontario government. Other important energy trends in Ontario pertained to the cancellation of a number of existing and key energy policies by the newly elected Ontario government, as well as a few noteworthy decisions by the Ontario Energy Board. A more detailed account of these 2018 Ontario energy trends follows immediately below.

Top Trending Energy Policies in Ontario for 2018

(A) Cancellation of Existing Provincial Energy Policies

  • Cap-and-Trade Carbon Tax 

The Cap and Trade Cancellation Act, 2018 (Bill 4)("CTCA") was introduced by Doug Ford shortly after being elected as Ontario's new premier. The CTCA went further than merely cancelling the previous government's key climate change policy. The CTCA also included provisions that: (1) required the government to "establish targets for the reduction greenhouse gas emissions in Ontario; (2) required the Minister of Environment, Conservation and Parks to prepare a climate change plan (consultations on the "Made-in-Ontario Climate Change Plan" began in October). Furthermore, the province of Ontario (along with other Canadian provinces) is bringing a constitutional challenge (to be heard by the Ontario Court of Appeal in April of 2019) to the federal government's carbon pricing plan which, starting in 2019, would impose a federal carbon pricing backstop on provinces (Ontario, New Brunswick, Manitoba and Saskatchewan) without a carbon pricing strategy. 

  • White Pines Wind Project

In addition to cancelling the previously-approved White Pines Project, a 9-turbine wind facility under construction in Prince Edward County, the newly elected Ontario government implemented the White Pines Wind Project Termination Act, 2018, estopping any person from bringing a claim arising from the cancellation of contractual and other rights related to the White Pines Project. 

  • FIT and LRP Renewable Energy Projects

Renewable energy projects under the FIT and LRP programs were also cancelled by the newly elected government of Ontario. The government issued a statement to the effect that cancellation of these pre-approved programs will save Ontario ratepayers $790 million, and that relevant legislation will protect hydro consumers from any costs incurred from the cancellation of these projects.

  • Green Energy Act (2019) and Accompanying Regulations

In addition to repealing the Green Energy Act, 2019, a legislation enacted ten years ago to expand renewable energy production, encourage energy conservation and create jobs in the renewable energy sector, the Green Energy Repeal Act, 2018 (Bill 34) also amended the Planning Act and Environmental Protection Act that enhance the power of the province and municipalities to reject renewable energy projects. 

(B) Ontario Energy Board Developments

  • OEB Denies Acquisition of Orillia Power Distribution by Hydro One

The Ontario Energy Board ("OEB") rejected Hydro One's proposed acquisition of Orillia Power Distribution. A motion to review and vary its decision was denied by the OEB. The OEB's reasoned that neither Hydro One or Orillia Power Distribution could establish that no harm would result to existing Orillia Power ratepayers based on Hydro One's proposed cost structures.

  • First OEB Update to Retail Service Charges (RSCs) in 15 Years

The OEB approved increased retail service charges (RSCs) from electricity distributors to energy retailers and customers so as to ensure that all distribution costs are covered. The underlying concern was to avoid a scenario in which retailers' activities would be subsidized by ratepayers. While RSCs remained untouched in the natural gas sector, a charge was added by the OEB. RSCs had not been reviewed in 15 years. 

  • Global Energy Storage

Rising electricity costs and peak demand, aging global energy infrastructures, the need for cleaner energy solutions, and advances in battery technology are prompting authoritative industry experts to affirm that energy storage combined with renewables at the grid level and behind-the-meter are the way forward. Recognizing the increasing value and necessity of energy storage, a report by GTM listed energy storage within its list of top 10 utility regulation trends for 2018.