Currently, O. Reg. 442/01 (Rural or Remote Electricity
Rate Protection) under the Ontario Energy Board Act, 1998
provides a subsidy to eligible consumers in rural and remote
communities to cover part of the high cost of service in these
areas. This subsidy is collected from all Ontario ratepayers and is
provided to the distributors who serve eligible consumers in rural
and remote areas. The intent of the rural and remote rate
protection (RRRP) has been to allow electricity rates for consumers
in rural and remote areas to be similar to those elsewhere the
Proposed changes to O. Reg. 442/01 would expand the way that RRRP
funds are used. The changes, which are described in a posting on the Environmental Registry, would
permit funds collected for the RRRP to be used for costs associated
with the construction and operation of lines to connect remote
First Nations communities to the electricity grid. These
communities are currently served by local diesel generators. The
RRRP funds would be used to partially fund new transmission lines,
as well as the upgrade of existing transmission infrastructure
between Dryden and Red Lake which would support connection to the
new communities. The RRRP funding will be limited to the 12
communities currently served by Hydro One Remote Communities that
are considered "economical to connect." The Environmental
Registry posting describing the proposed changes
indicates that there may be further amendments to O. Reg 442/01 to
support funding for additional remote communities in the future.
Parties are invited to submit comments on the proposed changes to O.
Reg. 442/01 by March 26, 2016.
It is interesting that at the same time as the Government has
proposed using the RRRP subsidy to support the connection of
electricity transmission to remote northern Ontario communities,
there is also an ongoing OEB proceeding considering issues related
to the connection of natural gas to unserved communities (discussed
in an earlier
post). Whether there should be additional funding from all
customers for natural gas expansion to unserved communities is a
live issue in that proceeding. Currently, at least in the early
years of a new community connection, existing natural gas customers
do "fund" natural gas expansion under the existing
feasibility parameters. The primary "funding" issues in
the natural gas community expansion proceeding are, first, whether
the parameters for "funding" expansion should be changed
(i.e., relaxed to allow expansion that currently is not economic)
and, second, whether the rates paid by customers of a gas
distributor can be set in a manner that includes costs of
"funding" expansion by another entity.
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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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