December 17, 2023 Attention:…

December 17, 2023

Attention: Ministry of Energy, Northern Development and Mines

Re: EDF Renewables Canada Comments on Ontario Regulation 429/04 Amendments Related to the Treatment of Corporate Power Purchase Agreements.

Dear Ministry of Energy, Northern Development and Mines:

EDF Renewables Canada Inc. (EDF) commends the Ontario government on launching stakeholder consultation towards implementing a regulatory framework to help enable clean energy corporate Power Purchase Agreements (PPAs) in Ontario. Moreover, EDF would like to thank the Ministry of Energy for the opportunity to submit comments regarding Ontario Regulation 429/04 Amendments Related to the Treatment of Corporate Power Purchase Agreements.

About EDF

With more than 1,000 employees across 3 countries, EDF and its affiliates have extensive experience with the development, financing, construction, operation and ownership of over 13 GW of renewable energy projects. Moreover, with 550 MW of wind in operation in Alberta, and over 300 MW of shovel ready projects in Alberta, EDF ranks among the most reputable full-service renewable energy companies in Canada. Throughout our significant experience in Canada, we have built long-standing relationships with key stakeholders, including utilities, corporate Buyers, regulatory agencies, and the communities in which we operate, enabling us to expertly navigate the development process, ensuring successful completion and full operation of our projects on time.

From site selection to asset management, EDF and its affiliates provide extensive services along the entire value chain from development to construction to operating, and maintenance and are proud to acknowledge that we have contracted nearly 3 GW with corporate Buyers such as McDonald’s, Microsoft, Google, Switch, Yahoo, Proctor & Gamble, Walmart, Safeway, Salesforce, Kimberly-Clark, and others.

Benefits of Corporate PPAs

Corporate PPAs have been successfully deployed in diverse markets to incentivize economic growth and respond to growing demand for renewable electricity supply. EDF believes that there is great value to the Ontario electricity sector and Ontarians by implementing a regulatory framework that provides the following benefits:

• Incentivizes Suppliers (e.g., renewable energy generators) and corporate Buyers (e.g.,
commercial and industrial (C&I) electricity customers) to enter into corporate PPAs.
• Corporate PPAs will result in the following benefits:
o Suppliers developing needed electricity supply during a period where
Ontario requires significant amount of supply (i.e., mid-2020s to mid-2030s).
o Supply increases resulting from PPAs will put downward pressure on wholesale
energy prices (i.e., lowers the Hourly Ontario Energy Price (HOEP)).
o Customers will not incur Global Adjustment (GA) charges relating to the supply from
PPAs, as the IESO did not contractually procure this supply.
o Buyers managing their electricity costs.
o Buyers achieving corporate sustainability objectives relating to non-emitting sources
of electricity supply.
o Potential economic development from Buyers (e.g., automotive, mining, steelmaking,
technology, financial services, and other industries) through investments in
manufacturing and other activities and initiatives.
• Broadens the base of customers for Suppliers in Ontario beyond the single-buyer IESO.
• Provides an opportunity for Ontario load customers to affordably purchase 100% clean
supply.
• Supports Ontario’s power system with expected growth rates exceeding 2% annually by
adding supply outside existing mechanisms that then require cost recovery via the GA
mechanism.

As stated in the Proposal Summary, corporate PPAs under this framework “could, in addition to providing system benefits, enhance industrial competitiveness in the province and support new clean generation.” Corporate PPAs are a common practice in other jurisdictions in Canada (i.e., Alberta), the United States and around the world. Companies with environmental, social and governance (ESG) commitments can leverage corporate PPAs to achieve their environmental commitments. The proposed amendments would help bring Ontario in line with competing jurisdictions and may provide an additional value proposition for companies looking to expand or invest in Ontario.

Comments and Recommendations on Ontario Regulation 429/04 Amendments Related to the Treatment of Corporate PPAs

EDF supports the proposed direction to help enable transaction of clean energy PPAs through amendments to Ontario Regulation (O. Reg.) 429/04., outlined in the Proposal Summary, including:

• The clearly stated aim of the proposed amendments: “to support the growth of new clean
generation in the province.”
• Allowing Industrial Conservation Initiative (ICI) participants to offset their facility’s demand in
the top five peak hours of a base period through PPAs with renewable generation and storage
facilities that are not connected behind the facility’s meter.
• Including wind, solar, small hydroelectric (i.e., less than 10 megawatts), biofuel and battery
storage as eligible technologies.
• Treating the contracted generation as if it is supplied to the ICI participant behind-the-meter
for the purpose of determining GA charges, like “virtual” net metering arrangements for ICI
participants.

EDF would like to provide additional recommendations for consideration to be incorporated into the regulatory amendments:

• Enable more Customer Choice: Eligibility should not be restricted to Class A electricity
customers only, as Class B customers have corporate mandates and objectives relating to
securing clean energy supply. Expanding beyond Class A electricity customers will also
maximize the opportunity that corporate PPAs provide to Ontario consumers.
• Program Durability: Corporate PPAs can become an exceptionally valuable tool to support
Ontario’s clean electricity grid through private sector investment. However, corporate Buyers
and renewable energy Suppliers need confidence and certainty that the proposed
amendments and especially current ICI program will endure over the long term. To the extent
that the Ontario government can signal this in the proposed amendments and related
communications, it would help create a positive investor climate for corporate Buyers and
Suppliers.
• New and Existing Facilities: New and existing renewable generation facilities should be
included in the regulatory amendments, including hybrid projects. An existing facility that is
nearing the end of its contract but not the end of its useful life should be allowed to recontract
or repower its operations under a corporate PPA, thereby providing system benefits and
enhancing industrial competitiveness. Likewise, if a company has environmental objectives
that specify a requirement for incremental renewable energy supply, those investors should
be allowed to finance the construction of new renewable and storage facilities to meet that
need.
• Hybrid Facilities Connected at Different Parts of the Grid: Hybrid facilities should be
considered eligible, including facilities with renewable generation and battery storage
connected at different parts of the grid.
• No Limits on Project Size, or Program Caps: Limits should not be imposed on project size or
total participation. This would arbitrarily inhibit good projects from getting built and create
uncertainty in the market.
• Maximize Flexibility: The regulatory amendments should not be overly prescriptive. Market
efficiencies between corporate Buyers and Suppliers will optimize costs, economies of scale
and potentially unlock innovative solutions that may not be contemplated under prescriptive
regulation. For example, a load should be able to contract with multiple Suppliers located in
Ontario. A supplier should be able to contract with multiple loads located in Ontario. A
supplier should be able to sell part of the capability of the facility into IESO-administered
markets and other parts and products to loads via corporate PPAs.