On November 12, the Hon. Greg Rickford, Ontario’s Minister of Energy, Mines and Northern Development, addressed a range of questions high in the minds of many people in the energy industry, clarifying the central directions and key priorities of the new provincial government’s energy policy. Speaking to approximately 300 guests at the Canadian Power Banquet, the Minister laid out the essential principles that are expected to guide government electricity and energy decisions for the next four years or more.
Without doubt, the top energy priority of the Ontario government is controlling the cost of electricity. A range of initiatives is underway in that area, and further announcements can be anticipated. In addition, Minister Rickford highlighted the government’s focus on reducing barriers for business, its desire to strengthen “transparency and trust in the Ontario Energy Board,” and its interest in relying on competitive processes for procuring future electricity supplies. He also stressed the government’s intentions to improve the way electricity resources are procured in the province and to listen to stakeholders’ ideas.
Summarizing one of the government’s most important high level objectives, the Minister said, “We are committed to restoring the public’s faith in this sector. We are resolved in driving efficiencies and focusing on that customer.” Stressing the difficulty many Ontarians are facing because of rising electricity bills, he pointed to problems that have accumulated as a result of past energy policies: “We had a legislative structure that was stifling. It rendered our province uncompetitive in business and it was too expensive for families to run their homes.” He spoke about the importance of regaining “Ontario’s energy advantage.”
Throughout his remarks Minister Rickford emphasized that the government will focus on finding pragmatic solutions. “We are looking, in a typical Tory pragmatic fashion,” he said, “for solutions that work for families and solutions that work for business.” At the same time the government plans to carefully assess alternative courses of action to make sure future initiatives are properly conceived and designed: “We are evaluating and reassessing the structure of energy in the province, the system from regulation to procurement and all points in between, in an effort to drive hydro costs down families and down for customers including businesses.”
Minister Rickford acknowledged that wide-ranging impacts will likely be felt as a result of technology-driven changes, and that there’s a pressing need to ensure the province is prepared with appropriate responses. “We recognize that change and innovation are realities we simply cannot ignore. It is critical that we continue to build partnerships to drive innovation and focus on promoting and supporting domestic industry. … Innovation and disruption mean that Ontario’s energy system requires much greater flexibility to be able to adjust to the changing supply and demand dynamics.” He noted that the IESO’s Market Renewal Project is expected to help identify new and improved mechanisms for refining Ontario’s electricity market.
In a comment that will interest many in the energy business, Minister Rickford committed to reliance on competitive procurement: “When Ontario needs more supply in the future, ladies and gentlemen, we will secure it at a better price by having suppliers compete to Ontario’s energy market.” He observed that circumstances vary, and that for example natural gas energy solutions and micro-grids will have certain advantages in terms of cost and flexibility in specific cases.
The Minister reviewed some of the government’s early actions in the energy sector, observing that the Ford administration had taken initial steps by changing the leadership at Hydro One and cancelling a number of early stage renewable energy contracts. He said this was “done to remove significant cost burdens, and more importantly, barriers for Ontario businesses, allowing them to grow, create jobs and be competitive.” Contrary to some comments in the media, here has been no attempt to put renewables out of business.
He said that the energy direction of this government will be built on three things: “Affordability for families, growth for businesses, and jobs that serve the needs for both.”
Speaking specifically on Market Renewal, the Minister said, “I’m hopeful that future capacity needs will be met through incremental capacity auctions. These auctions should create a competitive market both for suppliers and ensure lower costs for families and for businesses. We believe that because other jurisdictions have used capacity auctions with much success. Market renewal should benefit both customers and the electricity sector by increasing our system’s ability to adjust to changing supply and demand and attracting low cost non-traditional capacity resources, resources that are less likely to be identified in the absence of competitive markets.”
He stressed that the government will not be rushing to procure new capacity in response to recent discussions about the potential capacity gap emerging in 2023. He said he “I believe the most prudent approach to protect lenders and customers is to wait until we have greater certainty.”
Of great interest to many in the energy sector, Minister Rickford reiterated that the provincial government is “looking at ways to strengthen transparency and trust in the Ontario Energy Board.” With respect to modernizing the Ontario Energy Board, the Minister said, “We need the OEB to be a top tier regulator that responds nimbly in this environment. I know that a lot of people in this room participated in the recent review of the OEB and I appreciate your inputs. My commitment to you is that we will listen to your ideas and input to help create a provincial energy regulator that is focused on its core task of rate protection for families and for businesses. Since coming into this role almost five months ago I’ve learned a great deal from the people in this room.”
Minister Rickford thanked APPrO for the speaking opportunity, saying that the APPrO conference is one of the energy sector’s most important conferences, and considered to be an excellent venue for discussing the issues of the day.
In his conclusion, Minister Rickford said that “Ontario stands at a crossroads. I believe it is far more about its opportunities than its issues. … I welcome your continued input and ideas as we move forward in our commitment to push energy costs down, to drive efficiencies, and to restore the public’s faith in the energy sector and its regulator. This is the future of energy in Ontario. It’s one that I like to describe as building Ontario’s energy advantage. I believe it’s foundational to the prospect of any economic success that this province believes it can have.”