Subject: Need for…

Subject: Need for Participation Mechanisms for Small Storage in Ontario - Support and Recommendations for O.Reg. 429/04 Amendments and the Small Storage Capacity Program

Dear Ministry of Energy,

Attridge Transportation, a leading provider of student transportation services in Ontario, strongly supports amendments to Ontario Regulation 429/04. We commend the Government of Ontario’s initiative to improve the Industrial Conservation Initiative (ICI) to be more inclusive and facilitate the integration of renewable generation facilities and energy storage systems, which should include small multi-use storage facilities.

As we prepare for the future transition of our bus fleet from internal combustion engines (ICE) to electric vehicles (EVs), starting in 2024, we recognize not only the environmental benefits but also the unique opportunity this presents for enhancing the resilience and sustainability of Ontario’s electricity grid. Our forthcoming EV fleet, while serving the transportation needs of students, can also serve as a dynamic and flexible energy storage resource when not in transit, contributing to Ontario’s capacity needs in the coming decade.

Barriers to Participation in IESO Wholesale Markets and Non-Wire Services
Under the current market design and electricity regulations, there are significant barriers preventing the participation of small storage and EV-based electricity storage systems in IESO Administered Markets (IAM) and in providing non-wire services to utilities. These barriers include restrictive definitions of storage within the IAM that restrict the multi-use capabilities of EVs and the difficulties utilities face in coordinating DERs as NWAs with planning and rate case processes. This prevents us from utilizing our future fleet's full potential as an energy storage solution, which will be capable of delivering valuable capacity and ancillary services to the grid.

Value of the Proposed ICI Amendment for Attridge Transportation
The proposed amendments to the ICI could be a transformative opportunity for Attridge Transportation and other EV fleet operators with medium and heavy duty EVs. By recognizing the capacity value of our future EV fleet, inclusion in the ICI amendment would allow us to contract directly with ICI participants. This would enable us to monetize the energy storage capabilities of our EV buses, providing a new revenue stream that can offset the significant costs of transitioning to a clean fuel fleet while supporting the broader grid during high-demand or supply constraint periods. With the ability to contribute capacity when it is needed most, our EVs can offer a cost-effective solution to increase grid stability, reduce overall system costs, aligning with Ontario's commitment to a more sustainable and efficient energy future.

Realizing Ontario’s Intent and Addressing Concerns with Including Storage in the Amendment
As we understand it, the Ministry of Energy has developed this amendment proposal with the intent to support large electricity customers to buy clean energy from renewable generation facilities within the province, aiding them in achieving their Environmental, Social, and Governance (ESG) goals. This initiative is also aimed at creating an economic pathway for renewable energy projects nearing the end of their contracts, ensuring their continued operation. It should also be a pathway to enabling the integration and use of small and multi-purpose storage systems.

The Ministry's approach also seems aimed at limiting participation of suppliers and load customers using the amendment provision, to only entities that are transmission connected market participants settled by the IESO. While this approach might streamline the process by only allowing participants currently using IESO's settlement framework system and not increase the burden on Ontario utilities, it leaves a significant amount of potential small storage capacity that should be activated on the sidelines once again.

While we agree that large storage facilities should not participate in the ICI program and should participate in the IESO's Capacity Auction, capacity procurements, and other IAM services, there is an urgent need for participation mechanisms for small and multi-purpose storage systems like our EV storage systems. This gap needs to be closed so that small and multi-purpose storage systems can participate in serving Ontario through mechanisms that are low cost, have low barriers, are flexible for the participant and IESO and pay for performance.

Advocacy for Small and Multi-purpose Storage Participation Mechanism
Attridge Transportation strongly advocates for the opportunity to utilize its EV fleet storage systems to supply capacity to Ontario's grid. Inclusion in this ICI amendment would enable us to support ICI participants in reducing their loads in the ICI program and provide capacity to the grid.

We highlight that currently, there are no existing programs or mechanisms in Ontario for small storage to supply capacity which are low cost, have low barriers, are flexible for the participant and IESO and pay for performance. If small and multi-purpose storage systems are not included in this amendment, then Ontario should implement a new capacity program for these storage resources and allow them to provide capacity service without significant participation or economic barriers and to pay them for the value of their services. Attridge Transportation and EnerStrat Canada have developed the Small Storage Capacity Program (SSCP) as a pathway for these resources and would like the opportunity to discuss the need for this type of program with the Minister and his Staff.

The SSCP leverages existing Interruptible Rate Pilot infrastructure and would allow for a province-wide, scalable approach for small storage resources to supply capacity to the grid (beyond the top 5 hours of the year), providing a more inclusive market and fair compensation for resources like those Attridge Transportation plans to offer.

Medium and Heavy-Duty EV Adoption Forecast
EnerStrat Canada’s Medium and Heavy-Duty EV Adoption Forecast projects robust growth in the deployment of medium and heavy-duty EVs in the later half of this decade. The forecast estimates there will be 45,000 medium and heavy duty EVs operating in Ontario by 2030, with an aggregated storage capacity of 3,000 MW and 12,000 MWh, a portion of which exceeds the current demand reduction provided by ICI participants. By 2030, we anticipate the integration of medium and heavy-duty EV assets will be crucial in meeting Ontario’s growing capacity and energy needs.

Conclusion and Call to Action
In light of our planned investments, Attridge Transportation urges the Ontario Ministry of Energy to ensure that fleet EV energy storage systems are considered an eligible resource in the amended ICI regulation. We also call for the development of the SSCP, enabling small storage resources to participate effectively in Ontario's electricity system.

We are optimistic about the proposed amendments and the introduction of the SSCP, which together will facilitate the creation of a more resilient, cost-effective, and sustainable energy landscape in Ontario.

Thank you for considering our comments. We look forward to engaging with your team and other stakeholders in shaping these initiatives and contributing to Ontario's clean, cost effective and reliable energy future.

Sincerely,
James Attridge
Director of Operations
Attridge Transportation