By Kristyn Annis, McCarthy Tétrault LLP
The Ontario government’s recent tabling of the Green Energy and Green Economy Act, 2009 (the “Act”) is a first for North America. While the stated objective of the Act is twofold (to incentivize cleaner forms of electricity generation and to create a culture of conservation) there is a third objective which, although not written into the Act, has been touted by government as one of the main drivers: to create jobs in Ontario. As Ontario undergoes a significant shift in its traditional manufacturing base, no one can deny that the creation of “green collar” jobs is a central component to the Act. Along with the creation of green collar jobs, there are many sound environmental reasons to pursue distributed and/or renewable generation, however there is a cost to this development.
The government is aware that the cost of this new renewable generation will be substantial, and is, wisely so, aggressively pursuing conservation in order to keep costs to the consumer at a minimum. In order to encourage and modernize Ontario’s manufacturing and industrial sector, the government must continue to provide incentives outside of the ratebase – such as low corporate taxes or lower royalty payments in the case of the mining industry – to these players. Ultimately, if the government achieves its objectives, the greening of the energy sector could contribute significantly to the province’s GDP.
The Act presents challenges and opportunities. An example of an area that presents opportunities exists in the set of provisions relating to aboriginal activity in the energy sector. In particular, section 5(2) of Schedule B of the Act states that the Minister may direct the OPA to establish measures to facilitate aboriginal participation in the energy sector. This represents an opportunity for the government to partner with aboriginal communities, proponents, universities and colleges and its agencies to develop skills training programs for aboriginal peoples in the energy sector. The aboriginal population in Ontario is very young, comparatively speaking. First Nations and Métis could fill the ever increasing need for skilled labour and professionals within the sector. Such training would increase capacity for aboriginal communities to participate meaningfully within the sector, thereby increasing opportunities for the development of renewable generation and new transmission.
One of the key challenges for the Act will be co-ordination between the ministries involved in implementing the Act, such as the Ministry of Natural Resources and the Ministry of Environment, which are both working to develop the “Renewable Energy Approval”, and the agencies (IESO, OPA and the OEB). The agencies need to be coordinated in their efforts in implementing the Act. Recently, the agencies have demonstrated unprecedented collaboration in working to produce the rules for the feed-in-tariff (FIT) program.
The OEB in particular has a role to play, as the majority of the objectives of the Act pertaining to generation, transmission, distribution and conservation can be accomplished via rule changes to the Distribution System Code and the Transmission System Code. The OEB’s proactive initiatives such as improving the regulatory framework for the approval for investment in infrastructure (announced April 3rd) and the Transmission Connection Cost Review in 2008 provide a good forum for promoting open, educated discussion on the issues facing the sector and should be encouraged.