As part of its broad-ranging efforts to respond to innovation and try new approaches to regulation, the Ontario Energy Board announced the launch of “The OEB Innovation Sandbox” on January 16.
The OEB explains that the Sandbox is a “streamlined, accessible way for the OEB to support innovators to test new ideas, products, services, and business models in the electricity and natural gas sectors.” The Sandbox is designed to assist utilities and other companies with innovative energy-related projects. It notes that the projects must “show clear potential for benefit to consumers – whether in the form of long-term economic efficiencies, cost performance improvement, service enhancements or other ways.” Proposals can come from regulated utilities or unregulated businesses. Applicants can use the Sandbox to engage with OEB staff, access regulatory guidance and, where appropriate and within the OEB’s authority, receive temporary regulatory relief.
A regulatory sandbox is a generic concept pioneered in the financial services sector in recent years, and one that’s being replicated in the energy regulatory domain, the Board notes. “Regulatory sandboxes support innovators by providing customized guidance and the opportunity for the provision of temporary relief from regulatory requirements that may prevent rollout of a new product or service.”
Anticipated benefits of the Sandbox include:
• Allowing nnovators to pursue the opportunity to test innovative projects on a trial basis with the benefit of two potential types of support: Temporary relief from a regulatory requirement, such as an exemption from a code or rule; and/or Customized guidance from OEB staff.
• Reducing regulatory uncertainty and risk in ways that encourage innovation that benefits consumers.
• Allowing the OEB to gain enhanced insight into emerging electricity and natural gas sector challenges and solutions to inform its longer-term work supporting innovation that delivers value to consumers.
There are no pre-set deadlines – innovators can come forward to the OEB at any time. Applicants can ask questions without the requirement to file a written proposal, although a written proposal will be required to formalize an application. Following OEB staff’s review, the OEB will determine what support it may offer, including potential temporary relief from a regulatory requirement and/or customized guidance from OEB staff. At this stage, dedicated funding is not available to support initiatives that come through the Sandbox. To be eligible for the Sandbox, projects must involve testing of a new product, service or business model not widely in use in Ontario and for which there is no funding available at this stage.
For further information, see the OEB website at this location: www.oeb.ca/innovation
See also the related story, "OEB innovation initiative faces tough questions".