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On January 16, 2019, the Ontario Energy Board (OEB) announced that its "Innovation Sandbox"
is open for business. The goal of this initiative is to provide
advice and support to project proponents seeking to advance
"innovative projects related to electricity or natural gas
service." The OEB believes that it can provide value by
reducing uncertainty related to regulatory requirements, and
promises the potential for projects to proceed on a trial basis,
potentially with temporary relief from regulatory requirements. The
OEB hopes to be able to help proponents advance projects that offer
long-term efficiencies, cost savings, customer service improvements
or other forms of value for consumers.
The Innovation Sandbox is meant to advance the
OEB's focus on innovation and customer choice, as promised in
the OEB's
2017 Strategic Blueprint. According to the OEB's press release, this new tool is also "in
line with a recommendation of the Advisory Committee on Innovation
to provide a way for utilities and unregulated companies to discuss
regulatory issues with the OEB" (the Advisory Committee Report
can be found here). The OEB's initiative is modeled, at
least in part, on the OFGEM (the British energy regulator)
regulatory sandbox. That initiative (discussed in an earlier
post) has been running for almost two years and has proven to be popular, with 67 expressions
of interest received and seven trials launched for innovative
projects.
The materials provided by the OEB about the Innovation Sandbox set out what projects
are eligible, and what support is available.
Eligibility requirements are the following: (i) project must
demonstrate a reasonable prospect of providing clear benefits to
consumers, along with a reasonable degree of protection during the
trial; (ii) project must relate to natural gas or electricity
services in Ontario; (iii) project must involve testing a new
product, service or business model that is not widely in use in
Ontario; (iv) proponent must demonstrate their preparation and
readiness for testing their innovation in a live environment; and
(v) for projects seeking relief from a specific regulatory
requirement, proponents must articulate the regulatory
requirement(s) that may be at issue for the project moving
forward.
The OEB's initial focus appears to be on encouraging
proponents to engage with OEB staff to ask questions and get
information. The OEB states that "[a]n informal and open
dialogue between innovators and OEB staff may be used to, for
example, discuss the development of a written Sandbox proposal or
identify regulatory requirements that may be preventing a project
from moving forward. Innovators who request a meeting with OEB
staff will meet within 20 days of that request."
The OEB indicates that proposals meeting eligibility
requirements will be considered in two "streams."
The first of these (Stream 1) is for projects that require a
"Temporary Exemption from a Regulatory Requirement." In
those cases, the OEB indicates that it "may consider a
temporary exemption from the regulatory requirement, where it is
within the OEB's authority to do so." It is anticipated
that these proposals will typically be processed by OEB staff
without a hearing.
The second category (Stream 2) is for projects that do not
require a regulatory exemption. In those cases, if a proponent is
concerned that regulatory risk may inhibit the project, then
"OEB staff may provide customized guidance (including, where
appropriate, written assurances that the project does not raise
compliance concerns) to help move the project forward."
The OEB has provided a template for proposals that can be used
to submit plans to OEB staff. Alternately
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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