Minister’s directive

To: the independent electricity system operator

I, Greg Rickford, Minister of Energy, Northern Development and Mines hereby direct the Independent Electricity System Operator (IESO) pursuant to subsections 25.32(5) and (11) of the Electricity Act, 1998 (the Act) in regards to previously established electricity procurement initiatives, including, inter alia, the wind down of such rounds of the Feed-In Tariff (FIT) and Large Renewable Procurement (LRP) programs, which were undertaken by the IESO in accordance with one or more directions previously issued (the “Initiative”), as follows:

Background

Our government is committed to ensuring that Ontario has an affordable and reliable electricity system and to acting in the best interests of all Ontario electricity ratepayers, including homeowners and businesses.

Adequacy of Ontario’s Electricity Supply

Since the introduction of the Feed-in Tariff (FIT) program in 2009 and the Large Renewable Procurement (LRP) initiative in 2014, the IESO has entered into a significant number of renewable energy contracts. These procurement initiatives have contributed to the cost pressures facing electricity consumers across all sectors of the economy, including residential, farming, small business and industrial consumers. 

The IESO’s recent system planning work indicates that Ontario’s current contracted and rate regulated electricity resources are sufficient to satisfy or exceed forecasted provincial needs for the near term and that there are other means of meeting future energy supply and capacity needs at materially lower costs than long-term contracts that lock in the prices paid for these resources.

Electricity market renewal, an initiative underway at the IESO, is expected to provide market signals for any future investments required in Ontario’s electricity system, including opportunities to leverage renewable energy resources in a way that ensures value to Ontario electricity ratepayers and the electricity system.

The IESO’s system planning analysis indicates that the adequacy and reliability of supply can be maintained while winding down certain FIT and LRP contracts and that it would be in the best economic interests of Ontario’s electricity ratepayers, in respect of the FIT program, to wind down contracts where the IESO has not issued Notice to Proceed and, in respect of the LRP program, to wind down contracts where the IESO has not notified the contract counterparty that all Key Development Milestones have been met.

Directive

Therefore, in accordance with the authority I have pursuant to subsections 25.32(5) and (11) of the Act, I hereby direct the IESO to take all necessary steps in respect of the Initiative, as follows:

  1. To immediately take all steps necessary to wind down all FIT 2, 3, 4 and 5 contracts where the IESO has not issued Notice to Proceed.
  2. To immediately take all steps necessary to wind down all LRP I contracts where the IESO has not notified the LRP I contract counterparty that all Key Development Milestones have been met.
  3. To take all other steps which are necessary or desirable in order to facilitate the full and complete implementation of this Directive, as soon as is practicable.

General

Pursuant to subsection 25.32(11) of the Act, this Directive amends or revokes previous directions to the extent that a previous direction is inconsistent with the provisions of this Directive. For greater clarity, all other terms of any previous direction remain in full force and effect.

This Directive takes effect on the date it is issued.

Order in Council 1003/2018