Proposed amendment of Ontario Regulation 389/10: (General), to be made under the Energy Consumer Protection Act, 2010

ERO number
013-1915
Notice type
Regulation
Posted by
Ministry of Energy
Transferred to
Ministry of Energy, Northern Development and Mines
Notice stage
Decision Updated
Decision posted
Comment period
November 28, 2017 - January 17, 2018 (50 days) Closed
Last updated

Update Announcement

Amendments made on April 20, 2018 to O. Reg. 541/05 and O. Reg. 389/10 have been revoked. The revoked amendments would have enabled third party ownership of net-metered facilities, provided flexibility for virtual net metering demonstration projects, harmonized the consumer protection framework with the new third party ownership business models, and introduced standard disclosures for customer owned net metering. The government intends to consider any future improvements to Ontario’s net metering regulatory framework in the context of its broader energy policy priorities for the province.

September 26, 2018

This consultation was open from:
November 28, 2017
to January 17, 2018

Decision summary

Ontario Regulation 275/18, a regulation amending Ontario’s energy consumer protection regulation (O. Reg. 389/10: General) under the Energy Consumer Protection Act, 2010 has been revoked.

Decision details

Updated September 25, 2018

The following two regulatory amendments made to Ontario’s net metering framework that were to come into effect on October 1, 2018 have been revoked.

  • Ontario Regulation 273/18, a regulation amending Ontario’s net metering regulation (O. Reg. 541/05: Net Metering) under the Ontario Energy Board Act, 1998.
  • Ontario Regulation 275/18, a regulation amending Ontario’s energy consumer protection regulation (O. Reg. 389/10: General) under the Energy Consumer Protection Act, 2010.

The government intends to consider any future improvements to Ontario’s net metering regulatory framework in the context of its broader energy policy priorities for the province.

Ontario Regulation 273/18 would have enabled third party ownership of net-metered facilities and provided flexibility for virtual net metering demonstration projects, as well as required distributors to seek confirmation that customers seeking a net metering agreement had received standard disclosures for customer owned net metering projects.

But for the above-noted revocations, Ontario Regulation 275/18 would have updated Ontario’s Energy Consumer Protection Act, 2010 to recognize third party ownership business models for net metering.

Revoking Ontario Regulation 273/18 and Ontario Regulation 275/18 will maintain the requirements of the current net metering regulation wherein net-metered facilities must be owned or operated by the customer and be located behind the customer’s meter.

Original decision details

The Ministry of Energy has made amendments to Ontario Regulation 541/05 (Net Metering) to enable customers to enter into power purchase agreements with eligible third-party generators, and for those third-party generators to own or operate renewable energy generation facilities, for the purposes of allowing the customer to be billed on a net metering basis.

The amendments to Ontario Regulation 389/10 are designed to cover arrangements where a customer enters into a retail contract under the third-party ownership net metering business model. The changes come into force October 1, 2018.

Adapting consumer protection

The changes to O. Reg. 389/10 are designed to ensure that consumers who are considering entering into an agreement involving the third-party ownership net metering business model will be able to make an informed decision, have protection from unfair business practices and have recourse through the Ontario Energy Board (OEB), if they believe they have been subject to unfair business practices by retailers, based on the supply of electricity by the third-party ownership retailer.

The regulatory changes will require third-party ownership retailers to adhere to the same rules currently in place for all electricity retailers in addition to the following new measures that are specific to this new business model (third-party ownership net metering):

  • Disclosure: The retailer will be required to disclose if there are any other associated contracts, and whether cancellation of the retail agreement could trigger cancellation or termination penalties in the other contracts.
  • Unfair Practices: If certain disclosures concerning the terms and conditions of an associated equipment agreement are not made to a customer (including insurance or warranty obligations, maintenance obligations, terms of payment, transfer rights, cancellation fees, termination penalties, administration fees and equipment removal costs), the OEB will be in a position to enforce the Energy Consumer Protection Act, 2010 in order to protect the customer in respect of the retail contract.
  • Cancellation: Cancellation of the retail agreement, including if the customer moves, will continue to be permitted. However, any penalties or fees in any associated agreements that could be triggered by the cancellation of the retail agreement will be required to be clearly disclosed to the customer.
  • Return of Equipment: A customer who cancels a retail agreement will not be entitled to retain any associated equipment. Costs associated with returning this equipment will be required to be disclosed.

In-force date of the regulatory amendments

The  regulations will come into force on October 1, 2018. It is anticipated that the Ontario Energy Board (OEB) will conduct stakeholder engagement and implement changes to its Electricity Retailer Code of Conduct to accommodate changes to O. Reg. 389/10 by the in-force date.

Regulatory impact analysis

Businesses engaging in the new third-party ownership net metering model will have to become licensed as electricity retailers by the OEB in order to sell electricity to customers.  The initial licensing fee is $1,000 for a new electricity retailer licence (generally a five-year licence is issued). The renewal fee is $200. A licensed retailer must also pay an $800 annual registration fee. In addition, electricity retailers must ensure their staff is trained to understand and comply with the OEB’s Electricity Retailer Code of Conduct.

Comments received

Through the registry

9

By email

10

By mail

0
View comments submitted through the registry

Effects of consultation

Effects of comments

Overall, stakeholders expressed support for the policy direction of adapting the existing consumer protection framework to cover a new type of electricity retailer activity. Most respondents were supportive of licensing requirements.

The following provides a summary of the key comments:

Standard agreement/disclosure

Some stakeholders suggested there should be a standard agreement and cited the need for clear disclosure rules so that all parties to an agreement understand their roles and responsibilities. The amendments to O. Reg. 389/10 introduce a list of standard disclosures.

Guidance materials

Some stakeholders cited the need to develop guidance materials to help educate potential customers.

The Ministry of Energy will work with the OEB to consider the development of appropriate guidance resources that will assist electricity customers in understanding their consumer protection rights in the third-party ownership net metering business model.

Implementation process

There were some questions or concerns regarding details of how the regulations and licensing requirements would be operationalized. Details of the licensing requirements and how the regulations will be implemented will be addressed through OEB's processes to assess Code changes or rule changes for this new retailer activity.

Supporting materials

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Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Conservation and Renewable Energy Division
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77 Grenville St.
5th Floor
Toronto, ON
M7A 2C1
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Original proposal

ERO number
013-1915
Notice type
Regulation
Posted by
Ministry of Energy
Proposal posted

Comment period

November 28, 2017 - January 17, 2018 (50 days)

Proposal details

Description of regulation

Enhancements to Ontario’s net metering framework

The Province’s 2017 Long-Term Energy Plan (LTEP) commits to enhance Ontario’s net metering framework to give customers new ways to participate in clean, renewable electricity generation. In accordance with this commitment, the Ministry of Energy intends to expand net metering eligibility to include new ownership models and to ensure appropriate consumer protection provisions and siting restrictions are in place.

Legislative amendments to the Ontario Energy Board Act, 1998, required to expand the scope of eligible net metering ownership models, were tabled on November 14, 2017 through Bill 177, Stronger, Fairer Ontario Act (Budget Measures), 2017. Pending the passing of the proposed legislative amendments, the Ministry of Energy intends to propose regulatory changes to enable these new ownership models, as well as other regulatory measures in support of an expanded and enhanced net metering framework, as follows:

  • Enable third-party ownership of net-metered generation facilities and virtual net metering demonstration projects;
  • Adapt and enhance the existing energy consumer protection framework to support the introduction of third-party ownership arrangements; and
  • Ensure that prescribed types of renewable energy generation facilities are sited appropriately.

The Ministry of Energy invites input on this regulatory proposal and corresponding regulatory proposals (posted separately and linked in the Additional Information section of this posting) to inform changes to Ontario’s net metering framework.

A plain language description of the proposed regulation follows:

Ensuring appropriate consumer protections

In accordance with commitments made in the Province’s 2017 Long Term Energy Plan (LTEP), the Ministry of Energy is proposing to amend O. Reg. 389/10 (General) to be made under Ontario’s Energy Consumer Protection Act, 2010 to support the introduction of third-party ownership arrangements under Ontario’s net metering framework.

The Ministry of Energy is proposing to adapt and enhance the existing consumer protection framework to cover a new type of energy retailer activity related to Third Party Owners (TPO) participating in net metering. The proposed amendments would address matters arising out of TPO retailers and customers entering into electricity retail agreements for electricity generated from renewable energy generation facilities located behind a customer’s meter. The proposed amendments address only the part of the arrangement that relates to the sale of electricity by the TPO retailer to the customer.

Regulatory requirements

With some exceptions, most of the existing provisions of the energy consumer protection legislation and regulation are suited to the activities of TPO retailers who would be generating electricity from renewable energy generation facilities located behind the meter of a customer and selling that electricity to the customer. This includes the existing, stringent disclosure requirements that apply to contracts between electricity retailers and customers for the sale of electricity.

To ensure consumer protection measures are adapted to the TPO retailer activity, the following revised requirements are proposed:

  1. Disclosure

    The retailer would be required to disclose where there are any other associated contracts, and whether cancellation of the retail agreement could trigger cancellation or termination penalties in the other contracts. Any such penalties would also be required to be disclosed.

  2. Unfair Practices

    Failure to clearly disclose to a customer (i) if there are any contracts involving generation equipment associated with a retailing agreement and (ii) if those associated contracts have cancellation or termination penalties would be an unfair practice.

  3. Cancellation

    Cancellation in the event of a customer moving would continue to be permitted. However, any potential penalties or fees in any associated agreement that could be triggered by the cancellation of the retailing agreement would be required to be clearly disclosed to the customer.

  4. Return of Equipment

    Under certain circumstances, a customer who cancels a retailing agreement would not be entitled to retain any associated equipment. Stipulations of any cost associated with returning this equipment (dismantling, recovery etc.) would be required to be disclosed to the customer.

Other proposed regulatory changes

The Ministry is also considering including in a separate regulatory proposal, the use of contractual provisions, additional requirements of connection agreements and additional disclosure requirements that must be complied with by TPOs, generators and others engaged in the new net metering arrangements being contemplated. Stakeholders are advised to review the associated regulatory proposal posting for amendments to O. Reg. 541/05: Net Metering, listed in the Additional Information section of this posting.

Purpose of regulation

The proposed amendments are designed to ensure that customers who are considering entering into an electricity retail agreement with a TPO retailer can make an informed decision and can understand the impacts of any associated contracts or agreements, which may include separate contracts and/or liabilities that would not be covered under the Energy Consumer Protection Act, 2010.

Public consultation

This proposal was posted for a 50 day public review and comment period starting November 29, 2017. Comments were to be received by January 18, 2018.

All comments received during the comment period are being considered as part of the decision-making process by the Ministry.

Please Note: All comments and submissions received have become part of the public record.

Other public consultation opportunities

The Ministry of Energy is not planning any additional public consultation outside of this posting.

If the proposed legislative amendments and the proposed regulatory amendments are made, certain adjustments to the Ontario Energy Board’s regulatory requirements may be required. The Ontario Energy Board would explore the need for adjustments to codes and other applicable requirements that may be required to facilitate implementation of the TPO retailer activity.

Comment

Commenting is now closed.

This consultation was open from November 28, 2017
to January 17, 2018

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