Toronto: The long-awaited Clean Energy Standard Offer Program (CESOP) was updated in late September, and its final release has been postponed. The updated program plans were seen as a small improvement by some industry members, but overshadowing that was a significant amount of concern that the specific rules and contract have not yet been released. CESOP is expected to offer standard pricing and contract terms for small high-efficiency power projects, usually fired by natural gas.
The Ontario Power Authority issued an announcement on September 25, saying it had “posted its final ‘Updated Report on the Ontario Power Authority’s Revisions to the Clean Energy Standard Offer Program,’ outlining revisions to the program being made in response to industry and stakeholder feedback to the May 27, 2008 ‘Report on the Ontario Power Authority’s Revisions to the Clean Energy Standard Offer Program.’” The OPA said, “This Updated Report is intended to provide stakeholders with information on the improvements made by the OPA to the program as previously described in the May 2008 Report. The OPA is developing draft Program Rules based on the content of this Updated Report and will release these draft Rules in the next couple of weeks. At that time, the OPA will provide more information how stakeholders can provide comments on the draft Rules. Future updates on this process will be provided as details become available.” To the dismay of many, this date was not met.
The program was initiated by a letter from the Minister of Energy on August 18, 2005, more than 3 years ago. The OPA proposed in a report to the Minister an approach to small project clean energy procurement and a directive followed in June 2007. However in the opinion of many, the proposed approach did not adequately manage natural gas price risk. The OPA revised its approach to better align with the deemed dispatch model used for the Combined Heat and Power RFPs and updated its recommendations in May 2008.
On May 13 of this year, at the same time the RESOP review was announced, program manager Jim MacDougall indicated that “rules will be available for comment” around the end of September. The RESOP re-launch and CESOP launch appear to be held up as a result of the OPA and the Ministry of Energy discussing the most appropriate path forward for procurement of small-scale distribution connected generation. The OPA has indicated that it wants to impose project development milestones in both SOPs to reduce the amount of speculative development and connection queue problems seen from developer response to the RESOP.
As of the time of this writing, the full set of rules and contract are not yet available for comment, much less finalized. “This program seems to have more delays than any other OPA procurement process,” said APPrO Executive Director Jake Brooks. APPrO has provided input to the OPA on the design of CESOP since inception, and its recent comments have stressed the importance of timely release.
The latest update to the OPA report on CESOP is available on the OPA website at http://powerauthority.on.ca/Page.asp?PageID=861&SiteNodeID=312.
See related story “Industry groups recommend adjustments to CESOP,” in IPPSO FACTO, August 2008.