Ontario Energy Law: Electricity

by Clark, Ron W., Stoll, Scott A., and Cass, Fred D.
Markham: LexisNexis Canada, 2012

This book comprises a “soup to nuts” survey of the Ontario electricity sector, presented in nine chapters over 600 pages. Although the book describes the evolution of the industry in Ontario over the last century, its principal focus is on developments in the decade following the enactment of the Energy Competition Act, 1998 which restructured government-owned Ontario Hydro as part of a larger plan to move to a market-based, competitive electricity market. The three co-authors – Ron Clark, Scott Stoll and Fred Cass – are lawyers who have practiced almost exclusively in the energy area for their entire careers.

One third of the book – 200 pages – is devoted to electricity generation. This section includes a high level description of the technologies that underpin Ontario’s supply mix (nuclear, fossil, renewable); narratives about the Ontario Energy Board’s (OEB) generation licensing regime and the Independent Electricity System Operator’s Market Rule requirements; and discussions about the roles of Ontario Power Generation and the Ontario Power Authority (“OPA”). In light of Mr. Clark’s work for the OPA, it is not surprising that over 150 pages are devoted to the OPA’s various energy procurement initiatives, starting with the competitive procurement of 2,500 MW of clean generation and demand side projects in 2004.

This section includes useful summaries of the key provisions of the power purchase contracts for each such initiative, including the Renewable Energy Supply or “RES” Contracts, the Renewable Energy Standard Offer Contracts and the various iterations of the Feed-in-Tariff (“FIT”) Contracts.

The balance of the book comprises five chapters that deal with: electricity markets and system operation; distribution; transmission; conservation and demand management; and compliance and enforcement, respectively. None of these areas are covered in any detail. Rather, these chapters provide high level overviews of underpinning legal and policy frameworks and regulatory requirements.

Two emerging areas – the storage of electricity and the opportunities and pitfalls associated with the wide-spread deployment of smart meters – are only touched on in the book. Both topics warrant more discussion. Electricity storage is increasingly seen as a valuable tool to address fluctuating power supply and demand levels. A discussion of how the procurement of electricity storage technologies would fit into

the current regulatory framework would have been useful. Smart meters collect a wide range of data about customer consumption and, thus, customer behaviour. At the level of the individual consumer, this has the potential of triggering privacy concerns about the misuse of information; however, on an aggregated basis, the sale of such data could generate additional revenue and potentially offset rising distribution rates. A discussion of these issues would have been useful and topical.

This book is more a 10-year survey of the Ontario electricity sector than a detailed and current reference guide. Indeed, portions of it are already out-of-date; for example, the book does not deal with the 2012 change to the federal environmental assessment process, the fundamental changes to the FIT program that occurred in early 2013 or the recent OEB decision on Ontario’s first competitive process to select a proponent to develop a large-scale transmission project. For these reasons, while this book would be useful to readers unfamiliar with the Ontario electricity sector who wish to come “up to speed” quickly and relatively painlessly, such as newly qualified lawyers, it would have less utility for experienced lawyers and consultants who are familiar with Ontario energy markets.

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* Helen leads Dentons Ontario Energy Law Group. She is recognized as a leading energy practitioner with particular expertise in energy project development and utility regulation. She has over 25 years of experience as an energy lawyer in both the public and private sectors, including four years as counsel to the National Energy Board.

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