In an oral decision made on May 5,
2011 the Ontario Energy Board granted an application by
Ontario Waterpower Association (OWA) for an exemption from
sections 188.8.131.52(e) and 6.2.18 of the Distribution System Code
(DSC) for hydroelectric projects with a nameplate capacity of
between 1 and 10 MW that are located on provincial Crown
or federally-regulated lands.
Section 184.108.40.206(e) of the DSC requires a distributor (in this
case Hydro One) to remove an applicant's
connection capacity allocation if the applicant has not
signed a connection cost agreement (CCA) within 6 months of
receiving the allocation. The provision was
introduced in the fall of 2009 to ensure that connection
capacity was not tied up by projects that were not being pursued
diligently. The Board found there was no evidence that the
28 hydroelectric projects at issue in the application
were "laggards" and noted that such
projects face unique challenges because of their site-specific
nature and the extensive approval processes
involved. Accordingly, the Board granted these waterpower
projects an indefinite exemption to this requirement.
Section 6.2.18 of the DSC requires an applicant to pay a
connection cost deposit equal to 100% of the total estimated
allocated cost of connection when the CCA is signed. Again
the purpose of the provision is to ensure that connection capacity
is not tied up by projects that are not being pursued
diligently. The evidence before the Board established that it
was difficult for waterpower proponents to obtain sufficient
financing to meet this requirement at the CCA stage given the
extensive regulatory processes that still need to be
completed. In place of section 6.2.18, the Board
accepted a schedule under which an applicant will pay an
initial deposit of $20,000 per MW of nameplate capacity
with increased amounts due as various steps in the development
process are achieved.
In making the decision, the Board emphasized that
exemption was "strictly limited" and does not extend to
the proponents of other renewable energy projects. In that
regard, the decision is a notable contrast to the Board's December 2010
decision in which 12 power projects were granted a much
more limited exemption to section 220.127.116.11(e) and a request for
an exemption from section 6.2.18 was refused.
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