The LRP was a competitive process for procuring renewable
electricity projects; it was instituted in 2014 as a replacement to
the large renewable portion of Ontario's previous feed-in
tariff program. The first phase of the LRP was concluded in April
2016 with Ontario awarding contracts for the development of 16
renewable generation projects. Prior to the September 27, 2016
announcement, it was expected that Ontario would be awarding
several other contracts for additional renewable facilities during
a planned phase two of the LRP.
REASONS FOR LRP SUSPENSION
The cost of electricity for Ontario consumers has increased
substantially over the last decade. The public perception is that
much of the increase has been caused by climate change initiatives
to reduce greenhouse gas emissions, such as Ontario's efforts
to increase its level of renewable electricity generation.
Renewable energy now comprises 40 per cent of Ontario's
installed capacity and generates approximately one-third of the
electricity produced in the province. When combined with nuclear
resources, which account for one-third of Ontario's installed
capacity and produce nearly 60 per cent of its electricity, these
non-fossil sources now generate approximately 90 per cent of the
electricity in Ontario.
In its September 15, 2016 Throne Speech, the Ontario government
announced measures to implement this portion of the Climate Change
Action Plan, including providing homeowners and other eligible
consumers with a rebate of the eight per cent provincial sales tax
on the cost of electricity, and a plan to expand the number of
businesses eligible to benefit from the Industrial Conservation
Initiative (discussed in our September, 2016
Blakes Bulletin: New Opportunities for Ontario Businesses to
Benefit from Electricity Rate Relief Program).
The suspension of the LRP builds on the Wynne government's
response to concerns regarding increasing electricity costs.
Ontario announced that it suspended the LRP because further
procurement of electricity capacity is not needed at this time as
Ontario is forecast to have a robust supply of electricity for the
next decade, and the suspension of the LRP is expected avoid
additional spending of C$3.8-billion in electricity system costs
relative to Ontario's 2013 Long-Term Energy Plan forecast
(reflecting approximately C$2.45 per month for a typical
residential electricity consumer, relative to previous
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