On July 11th, 2012 the Minister of Energy directed the Ontario
Power Authority to continue with and to make modifications to the
Feed-in-Tariff ("FIT") Program.
Why is this directive so important for Renewable Energy
Co-Operatives ("RE Co-Ops")?
RE Co-Ops are one of the primary beneficiaries of the directive.
The Minister directed that renewable energy projects that have a
fifty percent (50%) ownership interest by a RE Co-Op where 50 or
more members of the RE Co-Op are local property owners are first in
line (with aboriginal groups) when allocating grid capacity. With
respect to remaining projects, a renewable energy project where
fifteen (15) to fifty percent (50%) of the project is owned by a RE
Co-Op and where 50 or more members of the RE Co-Op live in the
municipality where the project is located get 3 priority points for
grid access. This is the most priority points for any category.
Amended FIT Rules incorporating the foregoing are expected to be
issued any day. The 50 members referred to above becomes 35 for a
Small FIT Project.
Why is Priority for Access to the Grid so important?
Because it appears there is not enough capacity on the grid to
connect all projects seeking connections.
What will be the result of this development?
It can be expected that many other project developers who are
not RE Co-Ops will be seeking to join forces with RE Co-Ops to
secure grid access.
How will these developers be "joining forces" with RE
They won't be forming a new corporation. The RE Co-Op has to
have a direct ownership interest in the project with the developer.
It can be expected that the RE Co-Op and developer will be entering
into an agreement regarding how they will own and operate the
Sounds great! Are there any issues?
There are several uncertainties that will have to be addressed,
including: any issues arising out of the final FIT Rules and
completing the projects within the time prescribed to validate FIT
What's this about timing?
The FIT Rules provide that project proponents have a certain
amount of time to build their projects to validate their contracts.
There are also key milestones that must be met at various points
during project development. In order for the project to proceed,
the parties will have to:
enter into an agreement governing the terms and conditions of
have the required equity and financing in place, and
have the prescribed 50 land owners from the local municipality
as members of the RE Co-Op
This will take time. The Financial Services Commission of
Ontario ("FSCO") governs co-operatives. These new FIT
Rules will be new to FSCO as well. It can be expected there will be
a learning curve for them.
Where do we go from here?
Hopefully the new FIT Rules will provide further guidance. The
next several months will be both challenging and promising for the
renewable energy sector. Stay tuned for further developments.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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