Toronto: The Ontario Energy Board announced on May 17 that it was inviting public and stakeholder comment on amendments to two codes designed to establish and structure a new system for co-ordination of regional planning initiatives for the electricity sector in Ontario. The code amendments are the outcome of a process that began in 2011, largely intended to co-ordinate planning and development activities that affect the electrical infrastructure in a given region, as distinct from province-wide power system planning, or planning that is limited to one electrical distributor or transmitter. Much of the proceeding took place under the umbrella of the OEB’s broader Renewed Regulatory Framework for Electricity (RRFE) initiative. Two of the ongoing objectives in both the regional planning and the framework proceedings were to clarify the pace of new investments, and to improve efficiencies through co-ordination, thus reducing the cost of future investments in electricity network infrastructure, and helping to control consumer costs.
Hydro One, which is expected to be deeply involved in regional planning across the province, has noted the following key objectives for the new regional planning process:
• A more structured and transparent approach to regional infrastructure planning
• Timely implementation of required regional infrastructure
• Coordination with the OPA’s Integrated Regional Resource Planning process to account for integrated (i.e., non-wires) solutions
• Ensuring that rate applications and leave to construct applications are informed by and supported by regional planning considerations.
The OEB published a number of policy conclusions related to the regional planning proceeding in the context of its report on the Renewed Regulatory Framework for Electricity in October 2012. Among the conclusions outlined in that report were that the lead responsibility for regional infrastructure planning should rest with the transmitter in a given region. Following that report, the Board established a Working Group in 2012 that developed a number of recommendations on how to organize the regional infrastructure planning process. The report of that Working Group was important in preparing the Board’s latest proposed amendments to the Transmission System Code and the Distribution System Code. For example, a primary aspect of the proposed amendments is to attach timelines to the key obligations of transmitters and distributors in their regional planning activities as contemplated in the Working Group Report.
A key provision of the amendments is to establish a screening phase periodically in regional infrastructure planning in which the agencies determine whether regional needs can be met with transmission and distribution investments (a “wires-only solution”) or whether conservation and demand management (CDM) and generation options need to be considered in regional planning as well (an “integrated regional planning solution”).
In this respect, the Board says, “where a needs assessment indicates that further regional planning activities are required for a region, the transmitter will need to notify the OPA. The OPA would then determine the appropriate regional planning approach; specifically, whether a regional infrastructure planning process should be implemented immediately to determine the appropriate investment in transmission and/or distribution facilities to address a need or whether an integrated regional resource planning process should be implemented first for the purpose of also taking the potential CDM and generation solutions into consideration in the assessment. … [W]here [an integrated regional resource plan is required] … the Board is proposing to add section 3C.2.2(f), which would require the transmitter to participate in the integrated regional resource planning process, as required, and provide the OPA with such information as the OPA requires for that purpose, within 30 days of a request by the OPA.”
The Board also clarifies the process that will be used to determine when regional planning is needed and which agencies will need to be involved. It is “proposing to add section 3C.2.2(c), which would place an obligation on the transmitter to carry out a needs assessment to determine if regional planning is necessary, for each region. In addition to determining the regions that require regional planning, the needs assessment would also determine the licensed distributors, within each region, that need to be involved in the process where regional planning is determined to be necessary. It is proposed that the transmitter will identify and document (i.e., list) the distributors in a region that are both required and not required to participate in a regional planning process in order to demonstrate that regional requirements have been considered for all licensed distributors.”
The Board further explains that although it does not intend to approve Regional Infrastructure Plans, it “will approve proposed transmission and/or distribution facility investments included in the Plan that it determines are appropriate, through the application process. … The Board is therefore proposing to add section 3C.3.3, which would obligate the lead transmitter to submit an annual report to the Board reflecting the status of regional planning for each region within its transmission system, on November 1st of each year. To promote transparency and ease of access, the Board further proposes that the transmitter be required to post the annual report on its website.” The status report creates context and structure for the regular review of the Plan.
The Board notes that “Once a Regional Infrastructure Plan has been completed, it will be important for implementation of the Plan to be monitored for two purposes. First, for purpose of assessing the status of investments relative to the schedule set out in the Plan. Second, for the purpose of determining if the Plan needs to be updated in advance of the next scheduled needs assessment for the region.”
Additional changes proposed by the Board include the redefinition of certain transmission line connection assets as network assets “to better reflect the function that each transmission asset performs.” Other changes are related to existing rules in the TSC related to the “otherwise planned” and “refund” provisions. Some of these changes have potential implications for generators and customers who may host generation facilities.
The Board says that it believes the code amendments “will achieve the following beneficial outcomes:
• Ensure regional plans are being developed throughout the Province where it is determined to be necessary;
• Increase utility accountability in the regional planning process;
• Incorporate strict timelines into various aspects of the process such as the provision of the necessary information, completion of deliverables (e.g., Regional Infrastructure Plan), etc.;
• Increase transparency in the process through the posting of an annual report by the transmitter identifying the status of the regional planning process for all regions; and
• Underpin and facilitate the implementation of the regional planning process in a manner that is consistent with the process set out in the Working Group Report, which in turn allows for stakeholder consultation in the regional planning process.”
The Working Group identified 21 regions of the province that would be suited to regional planning initiatives under the new framework. The new rules contemplate having regional planning initiatives in place across the province within 4 years of the amendments coming into force.
Comments on the proposed code amendments were due by June 17. Following that, minor changes to the proposed amendments are possible, and final code changes are expected to come into force later in the year.
See also the following related stories on the development of the province’s regional infrastructure planning: “Remodeling the regulatory system for electricity,” IPPSO FACTO, December 2012, “Regional grid planning could be a sleeper issue,” IPPSO FACTO, August 2011, and “RRF process gears up for major deliberations,” December 2011.