On July 2, 2013 the Ministry of Energy posted a proposal to the
Environmental Registry to amend Ontario Regulation 161/99 to allow
distributors to provide street lighting and sentinel lighting
services, maintenance and repairs (EBR Registry Number:
The proposal has been posted for a 45 day public review and
comment period starting July 02, 2013. Interested parties can
submit comments until August 16, 2013 by either providing online
comments to the Environmental Registry or directly to Sunita
Chander, Manager, Ministry of Energy, Regulatory Affairs and
The Ministry of Energy describes the purpose of the proposal as
"Section 71 of the Ontario Energy Board Act, 1998 (OEBA)
currently restricts licensed electricity distributors (LDCs) from
directly undertaking most business activities, including activities
related to street lighting and sentinel lighting, a legacy of the
1998 electricity sector restructuring that encouraged
Section 71 of the OEBA originally intended that competitive
work, such as street lighting, be done by an LDC affiliate or
independent third party. As such, LDCs are restricted to
undertaking distribution activities such as repairing lines and
poles. This original policy intent is reflected in Section 71(1) of
the OEBA which prohibits an electricity distributor from carrying
on any business activity other than distributing electricity,
except through one or more affiliates.
However, over the past decade, the policy landscape has evolved.
Electricity distributors have been allowed to expand their business
into competitive conservation and renewable generation
For instance, as part of OEBA amendments in 2004, Section 71(2)
was added which allowed electricity distributors to provide
services related to the promotion of electricity conservation and
the efficient use of electricity. This included energy efficiency
improvements to street lighting.
The current approach to providing street lighting and sentinel
lighting services, repairs and maintenance lacks regulatory
consistency and is overly restrictive. It permits LDCs to replace
incandescent bulbs with more energy efficient bulbs. However, LDCs
are not allowed to replace a broken bulb with another identical
bulb because that would not be considered "distributing"
electricity or promoting electricity conservation or efficient
The current approach also limits choices for owners of street
lighting and sentinel lighting assets, particularly those in some
smaller towns and rural communities in Northern Ontario where there
is a lack of competitive alternatives to the local LDC.
In order to allow the full-servicing of street lighting and
sentinel lighting, the Ministry of Energy is proposing to amend
Ontario Regulation 161/99. This regulation prescribes exemptions
from various sections of the OEBA. The proposed amendment would
exempt licensed electricity distributors from section 71(1) of the
OEBA, with respect to providing street lighting and sentinel
lighting services, maintenance or repairs in their licensed
Both LDC affiliates and independent third party contractors
would still be able to bid for and undertake this work. It would
also not affect the flexibility and choice of municipalities to
directly undertake this work.
This proposed amendment would expand the scope of business
activities that LDCs could undertake. This is consistent with
recent amendments giving LDCs the authority to provide services
that promote energy conservation and efficiency without using an
However, LDCs would be restricted to providing these services in
their own service territory (defined in their OEB licence), and at
the fully allocated cost, to ensure a fair competitive tendering
process and protect ratepayers from any potential
cross-subsidization of municipal shareholders or
We continue to monitor these developments closely and will be
submitting comments to the Ministry of Energy on the proposed
amendments. Please feel free to contact the individuals listed
below to discuss these developments, your concerns and comments,
and the implications on your business.
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.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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