Canada: Ontario Energy Board Grants Leave In Milestone Decision

On September 15, 2008, the Ontario Energy Board (the Board) granted Hydro One Networks Inc. (Hydro One) leave to construct a 180 km double-circuit 500 kV transmission line from the Bruce Nuclear Generating Station in Kincardine to the GTA (Milton). The Bruce to Milton reinforcement project is the first major transmission project Hydro One has undertaken since the early 1980s and will widen an existing transmission corridor to transfer over 3,000 megawatts of power from the Bruce area to Southern Ontario. It is estimated to cost $635 million. The transmission line is expected to be in service by 2011. This OEB approval is a significant step towards the largest expansion to Ontario's transmission system in 20 years.

Hydro One's application was based on an identification of need by the Ontario Power Authority, comprised of three areas:

  • Expected continued Bruce nuclear generation at present levels;
  • "Committed wind" projects in the Bruce area; and
  • "Planned wind" project potential, including the ongoing Renewable Energy Standard Offer Program (RESOP).

Intervenors challenged both the content of this need identification and the choice of a 500 kV transmission line to meet the need. It was instead suggested that there was insufficient certainty behind continued levels of Bruce generation and the establishment of large wind projects, and that upgrading the existing 500 kV line with "series capacitors" presented a more economical alternative. In addition, potentially affected aboriginal groups submitted that both the Province of Ontario and the Board were remiss in meeting their constitutional duty to consult.

The Board determined that the need forecast was reasonable (despite identifying uncertainty about Bruce nuclear generation levels), a 500 kV transmission line was the best alternative to meet that need, and that aboriginal consultation to date was sufficient. The aboriginal consultation conclusion was grounded in the fact that the environmental assessment (EA) process is ongoing, and has a broader mandate that touches more directly on potential aboriginal impacts than does the Board's mandate of the price, reliability and quality of electricity service. The Board's economic leave to construct decision is conditional upon Hydro One receiving EA approval.


The decision is a milestone for three reasons: the parallel EA process, landowner participation, and the Board's aboriginal consultation conclusions.

First, the decision demonstrates that facility approvals can proceed down parallel regulatory paths in which EA is able to retain priority. This is unique because it is the first project of this magnitude to receive an approval prior to EA. This is unlikely to be repeated outside of Ontario because similarly-sized projects would likely cross provincial boundaries, triggering the Canadian Environmental Assessment Act. However, the flexibility demonstrated by the decision is nonetheless important for Ontario project developers.

Second, facility approvals involving landowners have not typically come before the Ontario Energy Board, as they are Ontario Municipal Board processes. The decision demonstrates that the Board can, and is prepared to, deal with intervenor interests in a commendable manner. A number of self-represented landowners participated throughout the proceeding, and the Board ensured that they were able to participate fairly, without compromising the efficiency of the regulatory process. This is in stark contrast to the Mackenzie Gas Pipeline and the Alberta 500 kV transmission line processes.

Finally, Crown consultation was unique in that the Board, a statutory delegate, included the adequacy of aboriginal consultation on the part of its principal as one of the issues to be considered. The core issue raised by intervenors was whether the Board was able to make a determination before consultation had been completed concerning all elements of the Project. The Board took a pragmatic approach, whereby it considered the evidence before it and made findings, but left open the question of consultation on the part of other Crown actors (i.e., the EA process). By doing so, the Board made clear that the adequacy of Crown consultation can be considered in a stepwise manner.

Gord Nettleton is a partner with Osler, Hoskin & Harcourt LLP practising in the Calgary office's Litigation Department. Matthew Keen is an associate in the firm's Calgary office. His practice includes environmental and regulatory law dealing with the application and approval processes of energy projects.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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