Proposal to amend Ontario Regulation 53/05 and/or create regulations under the Ontario Energy Board Act, 1998 to rate regulate certain pumped storage facilities.

The Ministry of Energy (ENERGY) is considering potential amendments to Ontario Regulation 53/05 (Payments under Section 78.1 of the Act) and/or creating regulations under the OEBA, to allow two proposed Pumped Storage (PS) projects to be rate regulated by the OEB.

The two PS proposals are:

• TC Energy Corporation and the Saugeen Ojibway Nation’s Ontario PS proposal; and
• Ontario Power Generation Inc. and Northland Power Inc.’s Marmora PS​​​​​​​ proposal.

In a letter issued to the Independent Electricity System Operator (IESO) on July 10, 2023, the Minister of Energy asked IESO to conduct an updated cost-benefit analysis of the two PS​​​​​​​ proposals, using certain specified assumptions and parameters.

If IESO’s updated analysis shows that, using the assumptions specified in the Minister’s letter, either or both of these two projects have the potential to provide positive value to the electricity system then the government intends to make a determination by November 30, 2023, on whether to pursue potential regulatory amendments to rate regulate these project(s).

If approved, the proposed amendments would, among other things, prescribe the developers of these proposed projects for the purposes of section 78.1 of the OEBA, and the proposed pumped storage facilities would be prescribed as a facility or facilities in respect of which the developers would receive payments determined by the OEB for the purposes of section 78.1 of the OEBA.

ENERGY believes that rate regulation could be a cost-effective and transparent mechanism for procuring pumped storage facilities, which are long-lifespan electricity assets with high capital costs and long lead times.

OEB’s oversight would also provide accountability and transparency since recovery of projects costs would require OEB approval and intervenors would be able to participate through a public process.