In response to recently announced policy changes from the Ontario government, the Independent Electricity System Operator announced October 3 that it “will not be proceeding with Virtual Net Metering pilots as the updated regulations do not enable Virtual Net Metering as had previously been contemplated.”
Virtual net metering would allow customers in one location to receive credit on their monthly energy bills for energy produced by a related entity at another point on the grid. Under the previous provincial government VNM was seen as a new model for development of community based and renewable energy, replacing the FIT program.
The IESO thanked all stakeholders and communities that have participated in the early development of Virtual Net Metering pilots under the IESO’s Renewable Distributed Generation Integration Fund (RDGIF). It noted that any future information regarding the status of the RDGIF will be communicated through the same email distribution list and on the engagement webpage.
The Ottawa Renewable Energy Coop (OREC) published the following comment on the cancellation:
"We view this as an unnecessary delay in the progress of distributed renewable energy generation in Ontario. The revocation of the amendments in question strips consumers of the choice of who and where they get their energy from. In this regard, the Ontario government is standing in the way of allowing market forces to shape the evolution of the province's energy landscape. Furthermore, the delaying of third-party net metering creates obstacles for individuals, businesses, and institutions of all sizes to reduce their electricity costs, despite the viable business case that net metered solar provides through community-financing groups like the Ottawa Renewable Energy Co-operative."
OREC lists 16 active projects in its portfolio, ground mount and rooftop, for a total capacity of 2055 kW, and another 1650 kW under development.
John Vellone, writing on Borden Ladner Gervais’ blog site, explains the regulatory changes as follows:
O. Reg. 541/05 (the Net Metering Regulation) requires electricity distributors to offer net metering to their customers upon request. Net metering is a billing method that, in accordance with the regulation, allows customers to generate renewable energy onsite for their own use, and to receive bill credits for any surplus electricity sent to the distribution grid.
Under the Net Metering Regulation, a customer seeking a net metering arrangement was required to own or operate a renewable energy generation (REG) facility for the purpose of generating electricity primarily for their own use.
In this context, O.Reg. 273/18 was to amend the Net Metering Regulation to enabled third-party ownership of net-metered facilities, whereby customers could enter into power purchase agreements with third parties to own and operate REG facilities for the purposes of generating electricity to be used by the customer (who would enjoy the net metering benefits). The electricity conveyed by the generator to the customer would be primarily for the customer’s own use, but any surplus electricity generated would be conveyed into the distributor’s distribution system on the customer’s behalf. Aside from a net metering agreement described above, neither the customer nor the generator was permitted to be a party to any other contract or agreement, which provides for the sale of the electricity that the generator conveys into the distributor’s distribution system.
O.Reg. 273/18 was also to amend the Net Metering Regulation to introduce provisions to define parameters within which distributors, generators, and customers can develop and take part in virtual net metering demonstration projects. Virtual net metering refers to an arrangement where a customer is billed on a net-metered basis for eligible electricity generated from a REG facility that is not located behind the customer’s meter (i.e., not connected directly to the customer’s load). The purpose of the new provisions was to, inter alia, provide clarity regarding how net metering agreements for virtual net metering demonstration projects should be structured, and how billing and settlement should be conducted.
O.Reg. 273/18 was scheduled to come into effect October 1, 2018. The new O.Reg. 422/18 revoked the O.Reg. 273/18 amendments to the Net Metering Regulation with effect September 25, 2018.
John Vellone’s October 2 blog post reprinted with permission.
http://blg.com/en/News-And-Publications/Publication_5422