Rapid Policy Update
2017 Long-Term Energy PlanOctober 26, 2017
On October 26th, the Ontario Government released its 2017 Long-Term Energy Plan, Delivering Fairness and Choice. The plan comes after a year-long consultation, which saw engagement from across the province. Below is a high-level synopsis of the plan, including the OCC’s analysis and comparison to the OCC’s Long-Term Energy Submission, Leading the Charge.
Key Initiatives identified in Delivering Fairness and Choice for Business:
The LTEP projects that the residential price for electricity will remain below the outlooks published in the 2010 and 2013 Long-Term Energy Plans.
The LTEP highlights how The Fair Hydro Plan will reduce electricity bills by 25 per cent (on average) for residents, small businesses and farms.
The government will continue to support the expansion of natural gas, providing customers with more choice and aiding economic development in their communities.
In Leading the Charge, we advocated that government’s long-term energy plan must respect the principles of affordability and competitiveness. We are pleased to see the 2017 LTEP has placed an emphasis on ensuring affordability as one of its fundamental pillars. Reducing electricity costs for industry and small business is a top priority of the OCC.
Under the Affordable and Accessible Energy section, the LTEP points to the government’s measures to help business and industry with energy costs. The plan points out the Save on Energy for Business programs, including the provincial government’s partnership with the Ontario Chamber of Commerce to raise awareness about these energy efficiency programs through Know Your Power. Learn more.
The LTEP further emphasis the Market Renewal Process currently being undertaken by the Independent Electricity System Operator (IESO), allowing the province to adjust to changes and cost-efficiency and acquire electricity resources needed to meet future demand.
The 2017 LTEP re-affirms that Ontario needs a flexible energy system that can meet possible future outlooks. Flexibility ensures that Ontario has the ability to respond to changing market conditions, allowing the province to balance electricity demand and supply. Market Renewal could transform Ontario’s wholesale electricity market and ultimately result in a more competitive and flexible energy procurement system.The LTEP promises to invest in cost-effective energy storage by updating regulations, including addressing how the Global Adjustment is charged for storage projects.
The Government plans to work with the Ontario Energy Board (OEB) to provide customers greater choice in their electricity plans.
The LTEP proposes to expand the options for net metering to give building owners more opportunities to access renewable energy generation and energy storage technologies.
Leading the Charge called on the government to continue to pursue and maintain a balanced supply mix, while seeking to invest in transformation and cost-saving technologies such as energy storage. The OCC has long recognized that new technologies such as energy storage will be complementary to peaking resources such as wind and solar while supporting the baseload operation of nuclear power. The OCC was pleased to see a commitment to nuclear refurbishment projects such as Darlington, the life extension project at the Bruce Power facility, and the continued operations of Pickering mentioned explicitly.The government plans to enhance the energy sector becomes as a more consumer-focused, and commits to working with the OEB to improve the performance and efficiency of LCDs, and to redesign electricity bills to make it easier for consumers to understand and manage their energy costs.
The government will direct the IESO to develop a competitive selection or procurement process for transmission, and to identify possible pilot projects.
Electricity bills need to be clearer and more understandable. While the 2017 LTEP makes a positive step in this direction, the OCC will continue to advocate for greater transparency and predictability in the energy system, including the need for the government to create a separate line item on natural gas bills for cap and trade-related costs.The LTEP places a further emphasis on the importance of a Demand Response capacity auction.
The government provided insight into its Green Ontario Fund, which will provide energy consumers with a co-ordinated one-window approach to encourage conservation across multiple energy services and programs.
The 2017 LTEP commits to conservation as a means for sustaining Ontario’s energy system and a tool for consumers to manage their energy costs, while emphasizing the importance of Demand Response mechanisms such as a capacity auction. Since 2015, the OCC has called for a capacity auction, as a means to create greater opportunities for Demand Response to grow further and compete with other resources. The Government remains committed to an electricity system that includes renewable energy generation and supports the goals of Ontario’s Climate Change Action Plan (CCAP).
The LTEP plans to strengthen the ability of the energy industry to anticipate the effects of climate change and integrates its impacts into its operational and infrastructure planning.
The OCC’s submission to the LTEP, Leading the Charge, called on the government to ensure energy planning is aligned with Ontario’s CCAP goals. The 2017 LTEP reaffirms this ask and supports the alignment.
Also, in the OCC’s submission to the Long-Term Infrastructure Plan, Building Better: Setting up the Next Ontario Long-Term Infrastructure Plan for Success, we call on the government to ensure that the province’s infrastructure planning is also aligned with the Climate Change Action Plan.The government commits to working with local communities to develop plans for meeting their diverse energy requirements. The government has indicated with the first cycle of regional and municipal energy planning complete, the IESO will begin making recommendations that address the challenges and opportunities that have emerged in individual communities.
The OCC is encouraged to see the expansion of natural gas, particularly for northern communities, giving consumers greater choice and aiding in economic development. Natural gas assets enabled the transition off coal-fired generation and provided a source of on-demand power to backstop wind and solar resources. As a flexible and responsive resource, natural gas adaptability will be instrumental for regional planning as a mechanism to keep costs down.
The OCC has long been active in advocating for a principled and pragmatic approach to energy planning. We were encouraged to see that Ontario’s Long-Term Energy Plan 2017: Delivering Fairness and Choice delivers broad alignment with the OCC’s previous policy stance. The 2017 LTEP, echoes the OCC’s call for the need to ensure competitive and affordable rates through new procurement models.
The OCC was pleased to see the strong commitment made to Ontario’s nuclear sector, including the refurbishment projects at Ontario Power Generation’s (OPG) Darlington site and Bruce Power’s facility in Tiverton, as well as a renewed commitment to pursue continued operations at OPG’s Pickering site. We also applaud government on the initial integration of Ontario’s CCAP into our energy planning system.
While today’s plan places an emphasis on ensuring affordability and flexibility, the OCC will continue to advocate that further rate mitigation strategies must be developed and aimed specifically at the business sector.
The release of the LTEP today provides us with an encouraging glimpse into Ontario’s energy future. The OCC will continue to advocate for the reduction of input costs for businesses and looks forward to working with the government to deliver on its energy priorities.