(June 3, 2015) Queen’s Park is, once again, undermining the Ontario’s energy regulator.
Queen’s Park took another step this week in undermining the province’s electricity regulator, the Ontario Energy Board (OEB).
The government introduced changes to the Ontario Energy Board Act (Act) – the legislation that governs the OEB – that would allow the ruling party to order the construction of a new transmission line, or an expansion of a pre-existing line, without the approval of the regulator.
Previously, the OEB had the final say on the building of transmission and distribution lines. Under the original Act the OEB would ensure that any new transmission line was in the “interests of consumers with respect to prices and the reliability and quality of electricity service.” Under that regulation, the building of transmission lines would serve to improve the quality of service for ratepayers, but also ensure that it didn’t come at undue cost.
In 2009, when the government introduced the Green Energy Act, the regulation was altered to ensure that transmission lines could be built for the “promotion of the use of renewable energy.” This pushed the regulator to approve transmission lines and distribution lines for renewable energy projects, regardless of the costs it would incur for ratepayers.
While previously the OEB had to consider whether a new transmission or distribution line would impose too great a cost on ratepayers – unless, after the 2009 introduction of the Green Energy Act, it was for renewable energy projects, in which case cost was a non-issue – the ruling government can now sidestep such concerns. Instead, transmission lines can be built for political or other reasons and with little to no concern regarding the cost a project will impose on ratepayers, who will be on the hook – through higher hydro bills – for any big capital projects.
Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI), a division of Energy Probe Research Foundation. You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or by phone at (416) 964-9223 ext 236