In an interesting case that has been winding its way
through the Ontario Energy Board (OEB), Grand Renewable Wind LP
(GRWLP) ― which was formed for the purpose of owning and
operating a 153 MW wind facility in Haldimand County ―
was exempted from the obligation to obtain a transmitter's
licence for transmission connection facilities it intends to
develop and operate to convey its wind generation
and solar energy generated by a related
company, Grand Renewable Solar LP (GRSLP).
In earlier section 81 and leave-to-construct proceedings (
which we wrote about last December), Board Staff and other
parties questioned GRWLP's position that it was exempt from the
obligation to obtain a transmission licence under Ontario
Regulation 161/99 (O. Reg. 161/99), but the Board ruled that these
were not the appropriate forums to decide the matter. However,
in early May, the Board, on its own motion under sections 19(4) and
57 of the OEB Act, initiated proceedings to determine
whether GRWLP was exempt.
GRWLP argued that it was exempt under O. Reg. 161/99
as a generator/transmitter which proposed to "transmit
electricity for a price ... no greater than that required to
recover all reasonable costs". GRWLP also took issue, as
an entity whose principle business was generation, from being
subject to the full complement of transmission licencing
requirements that apply to transmitters like Hydro One (i.e.,
compliance with Affiliate Relationship Code, subject to rate
regulation by OEB, have to establish standalone transmission
company, etc.).
In response, Board Staff queried whether O. Reg. 161/99 was intended to
only exempt generators/transmitters that transmitted their
own generation, in which case GRWLP
would not be exempt since it also proposed to convey the generation
of GRSLP. Board Staff argued that the language of O. Reg.
161/99 was not as plain as suggested by GRWLP and urged a
contextual and purposive interpretation. In particular, Board
Staff noted that the fundamental obligation on all transmitters to
provide non-discriminatory access to their transmission systems
could be undermined if GRWLP was not required to be
licenced. Board Staff questioned whether it would be in the
public interest to exempt generators/transmitters like GRWLP from
open access requirements "especially when such transmission
facilities are built on public road allowances [as] there are only
a limited number of easily accessible rights of way available in
many parts of Ontario". Board Staff argued "this
does not represent an optimal use of a sometimes scarce asset, and
is generally not in the public interest". Indeed in the
earlier leave-to-construct proceedings Haldimand County Hydro
Incorporated (HCHI) sought to preserve access to GRWLP's
transmission facilities so that HCHI could connect a new
transformer station for its distribution system. With regards
to GRWLP's concerns about being burdened by transmission
licencing requirements, Board Staff observed that the Board's
licencing powers permitted it to approve an "abbreviated"
transmission licence for GRWLP to reduce the regulatory
burden.
In brief reasons released on July 5, 2012, the
Board ruled that GRWLP was exempt based on the Board's
interpretation that the language of O. Reg. 161/99 exempted
generators/transmitters from conveying their own generation
and energy generated by third parties
provided that it was transmitted for a price no greater than that
required to recover all reasonable costs. The Board's
decision will provide helpful clarification for the increasing
number of renewable generators that have to construct transmission
connection facilities and may have been concerned about any new
transmitter-related obligations. That said, the Board did not
address ― and its decision does not resolve ―
the transmission access and system planning concerns raised by
Board Staff (and HCHI) and these issues may well resurface in
future proceedings and other contexts.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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