Canada: Ontario Energy Board Seeks Comments On Proposed Transmission System Code Amendments To Address "Enabler Facilities"

Last Updated: November 28 2008
Article by James C. Sidlofsky and Domenic Damiani

Most Read Contributor in Canada, September 2016


In an October 29, 2008 Notice of Proposal to amend the Transmission System Code (the "TSC"), the Ontario Energy Board (the "OEB") has circulated a series of proposed amendments to the TSC that would provide for the establishment and funding of "enabler" lines or facilities – described in the Ontario Power Authority's Integrated Power System Plan (the "IPSP") as dedicated radial transmission lines designed to connect clusters of renewable generation facilities. The IPSP is currently before the OEB, although the IPSP proceeding has been adjourned pending revisions arising out of a September, 2008 directive from the Minister of Energy and Infrastructure. The OEB notes that ten renewable resource clusters are identified in the IPSP, and that for three of these, the IPSP also describes the associated enabler lines.

As discussed below, the OEB is proposing a "Hybrid option", under which enabler facilities would be developed, built, operated and owned by a licensed transmitter. The costs associated with the enabler facilities would be pooled temporarily, and each generator would make a pro-rata capital contribution towards the cost of an enabler facility as and when it became ready to connect. Outstanding costs for any "unsubscribed" portions of an enabler facility would be included in the transmitter's rate base and be recovered from transmission ratepayers.

The OEB's consideration of enabler lines arose as part of the OEB's Transmission Connection Cost Responsibility Review. That process will address both load- and generation-related issues, but OEB staff, in a July 8, 2008 discussion paper, suggested that it would be appropriate to focus attention on enabler facilities. OEB staff suggested that re-examination and modification of the Board's connection cost responsibility policies appears to be warranted only in relation to the connection of clusters of renewable resources that are (a) identified in an approved IPSP and (b) expected to be exploited by multiple proponents.

The connection provisions of the TSC are based in part on the principle that generators should be responsible for the costs of their connections to the transmission system. The issue being addressed by the OEB is one of co-ordination. In its Notice, the OEB discusses the staff findings that:

"...coordination among proponents within a renewable resource cluster will be difficult to achieve if left to the proponents themselves. To paraphrase and extend the Discussion Paper analysis: coordinated action would be required in advance of having secured the necessary agreements with the OPA for supply of the commodity if the transmission facilities are to be developed and built on a timely basis. This is because the lead times for transmission design, development, and construction are considerably longer than they are for generation investments. Multiple proponents who are otherwise unrelated would have to jointly carry out these activities as well as pursue all of the required regulatory approvals well in advance of having secured OPA supply contracts. This would present significant commercial uncertainties for the proponents as any of them that failed to gain an OPA supply contract would find their past investments in transmission development stranded.

On the other hand, if proponents obtained supply contracts before commencing transmission development, they would face significant transmission cost risk as their output price would be determined long before their transmission costs are known. While this risk might be mitigated by means of the OPA building greater flexibility into its supply contracts (for example by having a variable transmission cost component), the Board does not believe that this solution would be optimal as it would result in the transfer (and perhaps magnification) of the risk to the electricity customer."

Put simply, without some means of co-ordination among the proponents in a cluster, transmission connections may not be built in a timely manner because the commercial risk of constructing transmission infrastructure without contracts for the purchase of the generators' output would be too high; if the infrastructure were built in advance but a proponent failed to receive a contract, its investment would be lost; or if the proponents waited until contracts were in place, those contracts may not adequately account for the cost of building the infrastructure.

The Options before the OEB:

The OEB considered four options presented by staff for dealing with the co-ordination issues:

  • The "status quo" option: Generators would remain responsible for the construction and cost of their own connections to the transmission system, including enabler facilities. The OEB noted that while this approach would involve the fewest regulatory steps, there were risks involved including the potential for a consolidated proponent to exercise market power by undersizing the enabler facility.
  • The "pooling" option: Enabler facilities would be developed, built, operated and owned by a licensed transmitter, and all costs associated with the enabler facilities would be included in the transmitter's rate base and be recovered from transmission ratepayers. Generators would pay for their individual connections to an enabler facility. The OEB noted that having the transmitter construct the facilities would address the coordination problem, and allowing the facilities to be placed into the transmitter's rate base would create strong incentives for the transmitter to proceed with the development of enabler facilities. However, the OEB observed that there was a risk of creating an uneven playing field between single generation proponents (who would still be responsible for 100% of their connection costs and would build those into procurement bids to the OPA) and clusters of proponents, who would not be responsible for those costs, and who could price their bids accordingly. The OEB also anticipated additional regulatory proceedings including leave to construct applications and rate applications that would have to take the enabler facilities into account when determining the transmitter's rate base.
  • The "hybrid" option: "Under this option, enabler facilities would be developed, built, operated and owned by a licensed transmitter. The costs associated with the enabler facilities would be pooled temporarily. Each generator would make a pro-rata capital contribution towards the cost of an enabler facility as and when it became ready to connect, calculated as a share of the cost of the enabler facility equal to a generator's capacity (defined as the generator's nameplate capacity) as a share of the capacity of the enabler facility. Outstanding costs for any "unsubscribed" portions of an enabler facility would be included in the transmitter's rate base and be recovered from transmission ratepayers." The OEB observed that this option would allow for a level playing field between single and multiple developers, as each would pay only its share of the connection costs. The OEB contemplated more regulatory steps than under the pooling option, as each developer would be subject to calculations of its proportionate share of the connection costs.
  • The "shared" option: "Under this option, enabler facilities would be developed, built, operated and owned by a licensed transmitter. However, unlike the "hybrid" option, generators that initially connect to the enabler facility would pay capital contributions representing the full cost of the enabler facility. Additional generators that subsequently connect to the enabler facility would also make a capital contribution, which would then be paid as a refund to the generators that connected earlier." The OEB observed that this option would not create the same rate base incentive for transmitters to build the enabler facilities (presumably because the full cost of the facilities would be paid back to the transmitter sooner). The OEB also contemplated additional complexities due to potential windfalls to the generators receiving refunds, where those generators incorporated the full connection costs into their contracts with the OPA. Recovering the windfall could require the renegotiation of OPA contracts.

The OEB recommends the Hybrid Option:

After reviewing the four options, the OEB confirmed its selection of the Hybrid option as the basis for its proposed amendments to the TSC. While transmitters will have the initial responsibility for constructing the enabler facilities, transmission customers will not ultimately bear their costs. When a generator connects its project to the enabler facilities, it will assume its share of the costs of those facilities and they will be taken out of the transmitter's rate base. The OEB "believes that the hybrid option holds the greatest promise in terms of economic efficiency, regulatory predictability and administrative efficiency, and is accordingly the preferred approach." The OEB also reiterated its belief that "maintaining generator cost responsibility is appropriate for all generation connections, including enabler facilities associated with renewable resource clusters."

The proposed amendments to the TSC define enabler facilities and renewable resource clusters, and establish the requirements related to cost recovery by transmitters with respect to the construction of the enabler facilities, including the timing of contributions by generators whose projects form part of renewable resource clusters and the posting of security deposits by those generators.

Opportunity to comment on proposed amendments:

The OEB's Notice is available on the OEB's web site, at:

The Notice invites interested parties to comment on the proposed amendments to the TSC by December 1, 2008. We would be pleased to discuss these proposed amendments with you.

About BLG

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.