Capital Power is pleased to…

Capital Power is pleased to provide for consideration by the Ministry of Environment, Conservation and Parks (“MECP”) the following submission providing Capital Power’s perspectives regarding amendments to Ontario’s EPS. Capital Power comments are summarized briefly below, and described in more detail in the sections below:

• Capital Power believes Ontario should match the federal headline carbon price that will increase by $15 per year starting in 2023 and rise to $170 per tonne of CO2 equivalent (“tCO2e”) in 2030. This will provide an important degree of certainty to market participants.

• Capital Power supports the current electricity benchmark of 0.37 tonnes of carbon dioxide equivalent per megawatt-hour (“tCO2e/MWh”), and believes the current benchmark has and will continue to drive significant and material reductions in emissions from the sector. We are concerned with the proposed immediate step-change reduction in the electricity benchmark. Such change will result in an immediate electricity cost increase with unclear emission reduction benefits. To the extent MECP believes a decline in the EPS benchmark is required, reducing the current benchmark from the current level to 0.31 tCO2e/MWh by 2030 on a linear basis should be pursued.

• Capital Power recommends that GHG emissions from imported electricity should be subject to the same GHG charges that Ontario generators are subject to. Charging GHG emissions from imported electricity will ensure a level playing field and also avoid carbon leakage and resource shuffling that might otherwise arise.

• Capital Power recommends that MECP adopts the federal offset system as a compliance tool under EPS. Adopting the federal offset system will allow Ontario facilities access to offset projects in different provinces, avoid duplicating the efforts to develop a stand-alone provincial program and reduce the future administrative cost to maintain the offset program.