3 The short title of this Act is the Fair Hydro Act, 2017 — Bill 132 (41st Parliament, 2nd Session)

Bill 132, 41-2

Ontario — Bills

2ND SESSION, 41ST LEGISLATURE, ONTARIO 66 ELIZABETH II, 2017 Bill 132 (Chapter 16 of the Statutes of Ontario, 2017)

An Act to enact the Ontario Fair Hydro Plan Act, 2017 and to make amendments to the Electricity Act, 1998 and the Ontario Energy Board Act, 1998 The Hon. G. Thibeault Minister of Energy 1st Reading May 11, 2017 2nd Reading May 18, 2017 3rd Reading May 31, 2017 Royal Assent J une 1, 2017

EXPLANATORY NOTE This Explanatory Note was written as a reader’s aid to Bill 132 and does not form part of the law. Bill 132 has been enacted as

Chapter 16 of the Statutes of Ontario, 2017. The Bill enacts a new Act and makes amendments to the Electricity Act, 1998 and the Ontario Energy Board Act, 1998.

SCHEDULE 1 ONTARIO FAIR HYDRO PLAN ACT, 2017 The

Schedule enacts the Ontario Fair Hydro Plan Act, 2017 . The Act establishes a framework under which the costs and benefits associated with the “clean energy initiative” are to be allocated among present and future consumers of electricity. The “clean energy initiative” is defined in

Part I as consisting of the policies of the Government of Ontario related to such matters as eliminating coal generation and fostering the growth of and investment in clean, modern and reliable energy sources and technologies. Under

Part II, the Ontario Energy Board is required to d etermine reduced electricity rates and to determine other adjustments to be made for certain classes of consumers in respect of specified periods of time.

For example, for the class of consumers referred to as “regulated rate consumers”, the electricity r ates payable for the period beginning on July 1, 2017 and ending on April 30, 2018 are the rates, as determined by the Board, that would result in a hypothetical member of the class being invoiced a total invoice amount that is 25 per cent less than a diff erent total invoice amount that the consumer would have been invoiced under comparison rates. Details regarding the determinations are prescribed by regulations.

Part III requires certain electricity consumers to pay an amount in respect of the “clean energy adjustment”. The clean energy adjustment is determined by the Financial Services Manager in accordance with rules set out in the Act and the regulations. (Section 18 of the Act appoints Ontario Power Generation Inc. as the Financial Services Manager except if specified circumstances arise.)

Part III also specifies the roles and responsibilities of electricity vendors and the Independent Electricity System Operator (“IESO”) with respect to the collection and remittance of amounts in respect of the clean energy adjustment.

Part IV requires the Minister of Energy to calculate a “fair allocation amount” by taking specified steps. It also requires the Financial Services Manager to prepare a written plan entitled the “Financing Plan”, which is to be used t o evaluate whether potential funding obligations should be incurred. Principles and limitations regarding the preparation and implementation of the plan are provided.

Part V requires the IESO to determine the “IESO deferral” in accordance with the regulat ions and to establish and maintain a variance account in which it records the IESO deferral each month. A “regulatory asset” is created under

section 25; the IESO has the right to recover the balance recorded in the variance account from certain consumers . The IESO is authorized to transfer a specified portion of the regulatory asset to a financing entity; this transfer results in the creation of the investment asset and the acquisition by the transferee of a corresponding “investment interest”. Various rules respecting the validity and priority of a transfer of an investment interest are set out. In

Part VI, rules in respect of the “investment asset” are provided.

Section 29 provides that the investment asset constitut es a current and irrevocable proper ty right and interest, consisting collectively of various specified rights and interests of investment interest owners. Rules respecting the validity and priority of such a transfer and the granting of a security int erest by an investment interest owner are included.

Part VII deals with various miscellaneous matters, including regulation -making authority of the Lieutenant Governor in Council. The Electricity Act, 1998 and the Ontario Energy Board Act, 1998 are amended to address various matters relating to the enactment of the new Act. For example, the objects of the IESO and Ontario Power Generation Inc. are expanded to address powers and duties under the new Act.

SCHEDULE 2 AMENDMENTS TO THE ONTARIO ENERGY BOARD ACT, 1998 The Ontario Energy Board Act, 1998 is amended. Among the amendments:

Section 79 of the Act is amended so that compensation for the rate protection provided to certain classes of rural or remote consumers may be funded out of money appropriated by the Legislature, rather than by consumers.

Section 79.2 of the Act, which governs the Ontario Electricity Support Prog ram, is repealed and replaced. The program is continued, but will be funded out of money appropriated by the Legislature after the variance account maintained by the Independ ent Electricity System Operator, formerly establishe d under the Plan, is exhausted, rather than by consumers. There are provisions relating to the sharing, use and disclosure of information relating to the administration of the Ontario Electricity Support Program.

ii 3. Programs are established to aid certain distribution rate-protected residential consumers and on-reserve consumers. 4. Various amendments of a technical and administrative nature are made to support the implementation and oversight of these programs including provisions related to auditing, record- keeping, inspections and inquiries, offences and penalties.

Bill 132 2017

An Act to enact the Ontario Fair Hydro Plan Act, 2017 and to make amendments to the Electricity Act, 1998 and the Ontario Energy Board Act, 1998 Her Majesty, by and with the advice and consent of the Legislative Assembly of the Provin ce of Ontario, enacts as follows: Contents of this Act 1 This Act consists of this section, sections 2 and 3 and the Schedules to this Act. Commencement 2

(1) Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

(2) The Schedules to this Act come into force as provided in each Schedule.

(3) If a

Schedule to this Act provides that any of its provisions are to come into force on a day to be named by proclamation of the Lieutenant Governor, a proclamation m ay apply to one or more of those provisions, and proclamations may be issued at different times with respect to any of those provisions.

Short title 3 The

short title of this Act is the Fair Hydro Act, 2017.

SCHEDULE 1 ONTARIO FAIR HYDRO PLAN ACT, 2017 CONTENTS

Preamble

PART I GENERAL 1.

Interpretation 2. Effect of invalidity 3. Purposes 4. Crown bound 5. Protection and assurances

PART II FAIR ADJUSTMENT 6.

Definitions 7. Regulated rate consumers, first adjustments 8. Other specified consumers, first adjustments 9. Determinations by Board 10. Implementation by electricity vendors 11. Subsequent adjustments 12. Sub-metering

PART III CLEAN ENERGY ADJUSTMENT 13. Specified consumers to pay 14. Irrevocability of amount 15. Determination of clean energy adjustment 16. IESO to receive amounts 17. Electricity vendor to invoice specified consumers

PART IV IMPLEMENTATION FINANCIAL SERVICES MANAGER 18. Appointment 19. Duties and powers FAIR ALLOCATION AMOUNT 20. Minister to calculate fair allocation amount FINANCING PLAN 21. Financial Services Manager to prepare Financing Plan 22. Incurrence of funding obligations

PART V THE REGULATORY ASSET 23. IESO deferral 24. Variance account to be established, maintained 25. Regulatory asset established 26. Transfer of regulatory asset 27. Validity of transfer

PART VI THE INVESTMENT ASSET 28. Investment asset established 29. Investment asset, irrevocable rights and interests 30. Transfer of investment interest 31. Validity of transfer 32. Investment interest owner may grant security interest

PART VII MISCELLANEOUS 33. Appointment of agent, invoicing or collection 34. Board’s authority 35. Sequestration 36. Choice of law 37. Conflict 38. No further approvals, etc. 39. Liability 40. References in marketing materials and offering documents 41. Compliance and restraining orders 42. Regulations

PART VIII AMENDMENTS TO OTHER ACTS 43. Electricity Act, 1998 44. Ontario Energy Board Act, 1998

PART IX COMMENCEMENT AND

SHORT TITLE 45. Commencement 46.

Short title

Preamble The Government of Ontario is committed to fostering the development of a clean, modern and reliable electricity sys tem with a diverse supply mix. The Government is also committed to removing barriers to and promoting opportunities fo r renewable and clean energy projects. These commitments can only be achieved if costs are shared fairly among consumers, today and in the future. Electricity rates h ave risen for two key reasons.

First, decades of under -investment in the electricity syste m resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable. Second, the decision to eliminate Ontario’s use of coal and produce clean, renewable power has created ad ditional costs. The actions taken to achieve a clean, modern and reliable electricity system have resulted in significant costs to residential consumers. The burden of financing these system improvements and funding key programs has unfairly fallen almost entirely on the shoulders of those consumers.

The Government of Ontario is committed to ensuring that the costs of financing these investments and the associated charges to consumers are allocated fairly among present and future generations. Recognizing that the electricity infrastructure that has been built and the policy decisions that have been made will create benefits for years to come, costs should be allocated fairly over time, so that residential consumers in the future pay their fair share for the benefits that they receive from the investments already made.

PART I GENERAL

Interpretation

Definitions 1

(1) In this Act, “Board” means the Ontario Energy Board; (“Commission”) “clean energy adjustment” means the amount determined under

section 15 and payable by specified consumers; (“ajustement pour l’énergie propre”) “clean energy benefits” means the value of the benefits determined to be derived by or accruing to specified consumers as a result of the clean energy initiative, including as a result of clean energy costs; (“avantages de l’énergie propre”) “clean energy costs” means the value of the costs allocated to specified consumers as a result of the clean energy initiative, including as a result of past, present and expected costs incurred in respect of, (

a) the amounts to be paid or reflected by the IESO in adjustments made under

section 25.33 of the Electricity Act, 1998 or any provision that is the successor to that provision, which relate to contracts or amounts for, (

i) renewable energy generation or capacity, (ii) conservation and demand management, (iii) energy storage, (iv) energy efficiency, (

v) natural gas generation and capacity, excluding contracts relating to amounts payable by the I ESO under

section 78.2 of the Ontario Energy Board Act, 1998 and excluding such other contracts as may be prescribed, (

b) payments made or expected to be made under

section 78.5 of the Ontario Energy Board Act, 1998, and (

c) such other costs or estimated costs as may be prescribed; (“coûts de l’énergie propre”) “clean energy initiative” means the policies of the Government of Ontario related to, (

a) eliminating coal generation and fostering the growth of and investment in clean, modern and reliable energy sources and technologies,

4 (

b) removing barriers to and promoting opportunities for clean and renewable energy sources and technologies, (

c) promoting conserva

Document details

Collection	Ontario — Bills
Citation	Bill 132, 41-2
Type	bill
Volume / chapter	p41 s2 bill 132 bill text 41 2 en b132ra e.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	bae5781316efdf62d9c57cb49567b2cdddc66bc2

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