Energy Regulatory Update (Q1, 2023)

Welcome to the Q1 2023 edition of the Shepherd Rubenstein Energy Regulatory Update, a quarterly round-up of the important developments in the Ontario energy sector between January and March (and the first days of April). As always, we scoured the regulatory landscape so that you can stay informed and ahead of the curve in this rapidly changing environment.

Ontario Energy Board

In January, the OEB released its long-awaited report arising from its Framework for Energy Innovation (FEI) consultation on integrating DERs into the distribution planning and operations, as well as the use of third-party owned DERs as non-wire alternatives. The FEI: Setting a Path Forward for DER Integration Report set out some initial OEB guidance, and laid out a multi-year implementation plan. The first part of the implementation plan involved the release of new Filing Requirements for electricity distributors who bring forward incentive mechanism applications for use of third-party DERs as NWAs.

On the innovation front, the OEB announced a call for submissions to its Innovation Sandbox Challenge, and released its Innovation Handbook, a compendium of existing OEB policies and materials related to innovative projects and proposals.

In a notable decision, the OEB approved a municipal franchise agreement between Enbridge and the County of Essex, finding that the previous 1957 agreement had expired as a result of the application of the rule against perpetuities.

In response to the Minister of Energy‘s Letter of Direction, the OEB instituted a consultation Distribution Sector Resilience, Responsiveness & Cost Efficiency, and held a first stakeholder meeting to discuss the contents of a draft report it had commissioned on the topic. 

As part of its modernization work, the OEB issued:

• A Standard Issues List for electricity distribution rate applications.
• Revised Filing Requirements for electricity transmission leave to construct applications.
• Amendments to the Rules of Practice and Procedure, and aspects of the Practice Direction on Cost Awards, related to adoption of new intervenor forms.
• Updated performance standards for natural gas Quarterly Rate Adjustment Mechanism (QRAM) applications.
• The 8^th edition of its Environmental Guidelines for the Location, Construction and Operation of Hydrocarbon Pipelines and Facilities in Ontario.

The OEB accepted 5 more Assurances of Voluntary Compliance (AVC) from electricity distributors (Alectra, North Bay Hydro, Enova, Newmarket-Tay, and Kingston Hydro), related to billing errors that resulted in the overcharging of customers through the fixed monthly service charge. AVCs were also accepted with an electricity retailer (XOOM Energy) regarding price disclosure issues, and two electricity wholesalers (Weyerhaeuser, Dyno Noel Nitrogen)  who had been operating without a license.