The IESO addressed the “Anticipated impact of federal carbon backstop” in its Technical Planning presentation of September 13. It said the following:
“Subject to the outcome of a challenge before the court, the federal carbon pricing backstop may be in place in Ontario on January 1, 2019. Unlike Cap and Trade, the backstop will mean:
• Electricity generators have a direct compliance obligation, if above the emission threshold*
• The electricity sector will be considered EITE. As such, an industry benchmark will be applied for the sector. The industry benchmark operates similar to providing free credits for gas-fired generators up to an emission rate equivalent to a typical combined cycle gas turbine.
• If benchmark emission rate is exceeded, a carbon price will apply only above the benchmark.
• If emissions are below the benchmark rate, generators will receive credits worth the carbon price.”