On March 9, 2015 the Hon. Bob Chiarelli, Minister of
Energy, delivered a keynote address to the Electricity Distributors
Association ("EDA") where he made important remarks about
key policy issues impacting the Ontario electricity distribution
The Minister indicated that the 2015 provincial budget (the
release date is likely to be in late April or early May) would
contain decisions about removing various barriers to the
consolidation of the distribution sector. As he stated, "we
need to take long, hard look at the departure tax and the transfer
tax" that stand in the way of meaningful consolidation and
reduce or eliminate these barriers.
The Minister also indicated that the Premier's Council on
Government Assets ("Clark Panel") has challenged the
government to re-evaluate its ownership structure of Hydro One. In
media reports after his presentation, the Minister indicated that
the government is considering an initial public offering of between
10-15% of shares of Hydro One and possibly larger share offerings
in the future. At this point, however, no decisions have been made
by the government.
The Minister posed the following questions related to the
structure and ownership of electricity distribution utilities:
Does the province need to be in the distribution business?
How can ownership changes drive meaningful transformation and
renewal of the distribution sector?
Do municipal governments need to be in the distribution
The Minister made his view clear that the current structure has
enshrined many inefficiencies that have disadvantaged electricity
ratepayers and the time to change is now. He also indicated that
the 2015 budget will contain decisions related to the ownership
structure of Hydro One and various policy decisions to drive
sectoral transformation. He believes establishing a more efficient
distribution sector will deliver various benefits to electricity
customers, chiefly lower rates. The Minister reiterated the
government's position that it will not legislate forced
consolidation of electricity distributors; however, his speech was
very clear, that the province wants the sector to forge ahead with
CONSERVATION AND DEMAND MANAGEMENT
The Minister also indicated that Conservation and Demand
Management programs ("CDM") for Ontario's
distribution utilities will continue to be an integral part of the
strategy of delivering value and energy savings to customers. He
mentioned several municipal utilities and their innovative CDM
programs and how the sector needs to expand these programs to reach
every electricity customer.
The Minister announced the launch of the "Conservation
First Implementation Committee" ("Committee")
co-chaired by Chris Tyrell of Toronto Hydro and Terry Young of the
Independent Electricity System Operator ("IESO"). This
committee will provide support and advice to other local utilities
in designing CDM programs that can meet their regulatory
ONTARIO CLEAN ENERGY BENEFIT AND NEW LOW INCOME PROGRAMS
The Ontario Clean Energy Benefit program which provided rate
relief to Ontario's electricity consumers will be ending
January 1, 2016. To replace this program, the government, working
with the Ontario Energy Board ("OEB"), is developing a
new initiative called the Ontario Electricity Support Program
("OESP") that will provide support directly to the bills
of eligible low-income electricity consumers after December 31,
2015. The details will be announced in the provincial budget.
In addition, the Minister stated that the Debt Retirement Charge
will be removed from residential consumers' bills two years
ahead of schedule.
The Minister's speech suggest that the Ontario Government is
very serious about promoting consolidation in the electricity
distribution sector and is actively considering its options with
respect to future ownership of Hydro One.
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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