The government and its partners are focusing their efforts on improving service to the province’s electricity consumers. This requires a continuous search for efficiencies, and maintaining a culture of innovation in the sector. These new technologies and systems can benefit energy consumers by enabling more intelligent planning and investments. The Province expects transmission and distribution utilities to deliver high-quality service while finding efficiencies and opportunities to lower costs.

Continued innovation in the electricity sector enables customers to use data and information in their decision-making and gives them the additional choice they have in many other parts of their lives. However, more choice requires more information, so consumers will need more openness and information from energy companies and agencies. The government is making this change possible by ensuring that the standards and performance of the sector’s entities are readily accessible.

Modernizing the utility business

Ontario’s local distribution companies (LDCs) are the main point of contact when customers deal with the electricity system. They provide the services that consumers count on, such as restoring power after outages, maintaining the safety of the system and fielding calls and questions.

In the coming years, utilities will face a number of challenges as to how they conduct their business. New and innovative technologies and companies are ready to respond to changing consumer expectations. LDCs need to determine how they will continue to provide value to consumers and participate effectively to meet system needs in the future.

The Ontario Distribution Sector Review Panel determined in 2012 that the consolidation of LDCs could reduce costs from the distribution sector by $1.2 billion over 10 years. The Ontario Energy Board (OEB) must lead, innovate and provide LDCs with incentives to become more cost-effective and efficient. The OEB has made improving LDC performance a priority.

The OEB's Performance Scorecard uses several key measures, such as resolving customer complaints during the first phone call or the first visit, to track whether LDCs have improved their performance. The Scorecard also allows customers to see if the service they receive from their LDC meets OEB standards. The OEB is planning to enhance this framework to encourage greater efficiencies and make LDCs more accountable to consumers.

The government will look to the OEB to further strengthen the accountability that both distributors and transmitters need to show to their customers. By focusing on the principles of transparency, responsiveness to customers, efficiency and cost-effectiveness, the OEB will support a future in which:

  • Utilities (LDCs and transmitters) have incentives to cut costs and make annual improvements to productivity and cost-efficiency;
  • Utilities are constantly striving to improve;
  • Utilities are held to account when expectations are not met;
  • Customers get the highest possible value from their electricity services; and
  • Businesses and other large customers have a timely and predictable process to connect to the grid or modify their existing connections.

LDCs are already responding to the changing landscape and finding opportunities to achieve further efficiencies and savings.

Improving grid-connection processes

Increasing efficiency and transparency in our electricity sector supports Ontario’s Open for Business strategy. This strategy includes a Red Tape Challenge to cut unnecessary red-tape to save businesses time and money. As part of this initiative, the government will engage the mining sector and other large industrials to discuss opportunities to improve grid-connection processes so that they do not pose barriers to investment in Ontario.

Enhancing reliability

Ontario’s market participants must comply with standards that define the reliability requirements for planning and operating the interconnected North American bulk electricity system. The North American Reliability Corporation defines standards which address physical and cyber security, emergency planning and response, power system modelling and planning, and real time operating practices for the bulk electricity system. The Independent Electricity System Operator (IESO) is responsible for compliance monitoring and enforcement of the reliability standards in Ontario.

The OEB also sets reliability and quality of service standards for transmission and distribution utilities. Distributors report the frequency and duration of outages in their annual performance scorecard to the OEB. Transmitters also have customer standards, including a process to address areas of poor performance.

Reliability and quality of service are of vital importance to electricity consumers. This is especially true for communities on long, radial lines that can fail more frequently, and for businesses that are particularly sensitive to electricity outages or fluctuations. The OEB has considered a number of ways to improve reliability over the years and the government will look to the OEB to examine further cost-effective steps that could help provide customers with useful knowledge about the reliability of their service and opportunities to resolve their concerns.

The Province believes that an enhanced framework for the reliability and quality of service of transmission and distribution utilities could provide customers with increased benefits, for example by:

  • Introducing incentives and consequences to ensure utilities are held to account for performance. For example, as in done in some other jurisdictions, Ontario customers could receive an on-bill credit when service standards are not met;
  • Establishing new standards and measurements of reliability that, in addition to the current system-wide averages, give customers more detailed insights into the reliability of their local networks;
  • Ensuring that utilities report whether they are meeting the standards in a way that customers find meaningful and easy to understand; and
  • Setting out clear timelines and steps that utilities must follow when they do not meet reliability standards or when customers report problems with reliability, power quality or other quality of service issues.

The government will look to the OEB to review the standards that transmission and distribution utilities currently have for reliability and quality of service and for options to improve the standards. The government will also ask the IESO to review how its planning and policies can improve customer reliability.

Changing business models

To meet the challenges of the future, LDCs may need to adopt more flexible and innovative approaches to service delivery than have been allowed in the past.

Non-wires alternatives represent an opportunity for LDCs to adopt new approaches to how they deliver electricity and conduct business. While traditional investments are capital-intensive, non-wires alternatives often involve expenditures that the OEB considers "operational" in nature. The current regulatory framework inherently favours LDCs' capital investments over operational investments, reducing the incentive for utilities to explore these innovative solutions. As part of its review of barriers to innovation (Chapter 3) the government will look to the OEB for ways to appropriately address the treatment of LDC expenditures to ensure cost-effective outcomes for ratepayers.

Many LDCs have entered into joint service agreements to improve customer service and reduce their operating, maintenance and administration costs. Organizations such as GridSmartCity, the Coalition of Large Distributors and Cornerstone Hydro Electricity Concepts are examples of LDCs leading the way in these partnerships.

The government will look to the OEB to explore ways of facilitating these partnerships where they make economic sense. It will also consult with LDCs on additional ways to realize these savings and provide better customer service. The OEB will continue to promote efficiencies in its own rules and requirements so that LDCs and transmitters benefit from further regulatory streamlining.

Making electricity bills more understandable

Electricity bills need to be clearer and more understandable. They are the customer’s main window into the electricity system. Consumers have told both the Province and LDCs that they find current bills confusing and inaccessible. Action is underway to address this. Hydro One is introducing a redesigned electricity bill for its low-volume consumers in late 2017. Hydro One’s redesigned bill, the product of testing and research into consumer behaviour, is expected to increase customers' understanding of their electricity charges.

To expand this effort across Ontario, the government is working with the OEB and LDCs to redesign electricity bills to give Ontarians the information they have said they want on the bill. This will make bills easier for customers to understand and ensure they get the most useful information out of their bills. Customers expect LDCs to adopt more consumer-friendly billing systems, such as bills that can be viewed and paid on mobile devices.

Improving customer choice through data accessibility

The Province is promoting improved access to data to help consumers view and understand the information they need to make decisions on their energy use. Recent initiatives include:

  • The Ontario Energy Report, an online portal that provides consumers and stakeholders with an up-to-date snapshot of Ontario’s energy sector;
  • Green Button, a data standard that can give consumers access to data on their energy and water consumption. Green Button can also allow consumers to securely and automatically transfer that data to various applications that can help them manage and conserve energy and water; and
  • Enhancing the Meter Data Management and Repository (MDMR), Ontario’s central repository for smart meter data. The IESO Smart Metering Entity is leading a project that will support more rigorous analysis of consumption data across the province, with the end goal of making better planning decisions and improving services to customers.

The government will continue to improve peoples' ability to use data to make decisions. But it cannot stop there. Ontario’s energy sector as a whole must continue to improve its ability to analyze data and use advanced mapping tools and other cutting-edge technologies to further modernize our grid. This is discussed further in Chapter 5.

These efforts always need to keep the individual in mind. While the digital economy is integral to an efficient government and an affordable energy sector, it will be built on the protection of personal privacy.

Cyber security

Cyber security is increasingly important in protecting critical infrastructure, such as the province’s electricity system. It includes a body of technologies, processes and practices designed to protect networks, computers, programs and data against attack, damage or unauthorized access.

Cyber security standards for the bulk electricity system are defined by the North American Electric Reliability Corporation. These Critical Infrastructure Protection standards have been adopted in Ontario and are enforced by the OEB and the IESO. Generators, transmitters and other industry participants are required to implement and comply with the standards.

Cyber security at the distribution level is an emerging issue, and is an operational necessity for the distribution sector. It includes both the protection of customer-specific information held by LDCs and the protection of distribution-level system operations.

The government is working with both the IESO and the OEB to ensure that cyber security is being addressed in the electricity system and that there is appropriate regulatory oversight to mitigate cyber risks and threats.

In the spring of 2017, the OEB issued a draft framework that will define cyber security guidance and reporting requirements for LDCs. This framework will be in place by the end of 2017.

Competitive transmitter selection

To help ensure lowest-cost solutions for transmission, the Energy Statute Law Amendment Act, 2016 enabled the IESO to use a competitive process to select companies or consortia for the construction of new transmission lines in Ontario.

As a first step in implementing the new legislation, the government will direct the IESO to develop a process for the competitive selection or procurement of transmission and identify possible pilot projects. The results of these pilots will be used to develop a procurement process that is clear, cost-effective, efficient and able to respond to changing policy, market and system needs.

Right-sizing

The aging of transmission and distribution infrastructure across the province presents challenges for the electricity industry. These challenges include managing costs and the outage requirements necessary to deal with replacing or refurbishing end-of-life equipment, while maintaining safe and reliable service to customers. Equipment reaching end of life also presents opportunities to ensure that the new or refurbished facilities are "right-sized". That means downgrading or removing equipment if demand is expected to decrease and upgrading equipment in communities with growing demand or increasing reliability needs. New facilities will also consider technological advances and other solutions that may be more cost effective in the long run.

The IESO and OEB have key information associated with forecasts for growth, changing customer needs and technological advancements based on government policies and programs, while transmitters and distributors have information related to asset end-of-life and the related reliability and other risks. Together, this information provides important perspectives on the likelihood and consequence of asset failure, the forecast of growth, changing customer requirements and the impact of new technologies, to ensure new and refurbished infrastructure is built to the right size and is capable of meeting the future service quality needs of customers.

As they exercise their respective responsibilities for planning, the government will look to the IESO and the OEB to promote a co-ordinated, streamlined and longer-term approach to the replacement of transmission and distribution assets that are at end of their lives. The approach needs to be consistent with the beneficiary pays principle, where the consumers that benefit from the asset are responsible for the costs.

Transmission corridors

The Provincial Policy Statement, 2014 states that efficient patterns of land use and development are essential for healthy, livable and financially-viable communities. The statement connects the planning for land use and energy infrastructure by endorsing the planning and protection of transmission corridors and discouraging development that could preclude or limit the use of a planned corridor.

The Provincial Policy Statement is the foundation of the Growth Plan for the Greater Golden Horseshoe (2017), which requires the Province, municipalities and other public agencies to encourage the co-location of linear infrastructure, such as roads and transmission lines, when they are planning for development. The Growth Plan says governments and public agencies should also protect existing and planned corridors to meet current and projected needs.

The IESO's regional plan identifies that the northwest Greater Toronto Area has a long-term need for a transmission corridor (Figure 16). The IESO relied on the population and employment forecasts included in the Growth Plan to forecast demand for the area. The transmission corridor would supply portions of the Regions of Halton, Peel and York.

Figure 16: Future transmission corridor in the west GTA

Future transmission corridor in the west Greater Toronto Area

Given the size of the forecasted growth and the distance from existing transmission lines, alternatives to a new transmission corridor are either not economical or not technically feasible. The IESO estimates that there could be additional costs of hundreds of millions of dollars to build underground transmission lines later on, if an overhead transmission corridor is not reserved before the area develops. Further studies will identify a more specific corridor.

Transparency for consumers on gasoline pricing

Many Ontario consumers pay attention to their gasoline prices. A number of components are part of the retail price of gas, including crude oil costs, taxes, the gross refining/wholesale margin and the gross retail margin. Families and businesses have requested more information about how gasoline and diesel retail prices are set.

As a result, the government asked the OEB in November 2016 to review the operation of Ontario’s retail market for gasoline and diesel fuel. The review will focus on three main topics:

  • The extent and causes of variations in retail prices over time and between one region in Ontario and another;
  • How pricing and competition in Ontario compare with other jurisdictions; and
  • The information available to consumers about pricing and price variations.

The OEB expects to report on its findings by the end of 2017. The government will review the OEB's report in detail and consider the information in its future decision-making.

The government monitors the supply and price of gasoline in the province and other jurisdictions, and makes this information publicly available through the quarterly Ontario Energy Report.

Summary

  • The Province expects the Ontario Energy Board (OEB) to continue to enhance its efforts to improve the performance of local distribution companies (LDCs).
  • The government will look to the OEB to identify additional tools and powers that could be used to make utilities more accountable to their customers, promote efficiencies and cost reductions, encourage partnerships, and ensure regulatory processes are cost-effective and streamlined, while also accommodating changing utility business models.
  • The government will work with the OEB and LDCs to redesign the electricity bill to make it more useful for consumers in understanding and managing their energy costs.
  • The government will look to the OEB to review the standards for reliability and quality of service for transmitters and distributors, and options for improving the standards, and will ask the Independent Electricity System Operator (IESO) to review how its planning and policies can improve reliability for customers.
  • The government will direct the IESO to develop a competitive selection or procurement process for transmission, and to identify possible pilot projects.
  • The government will look to the IESO and the OEB to promote the right-sizing of transmission and distribution assets at their end of life.
  • A new transmission corridor is needed in the northwest Greater Toronto Area given the size of the forecasted growth. Further studies will identify a specific corridor.
  • The Province will provide greater transparency for consumers on gasoline pricing through the OEB's transportation fuels review.

Accessible descriptions

Figure 16: Future transmission corridor in the west GTA

Figure 16 is a map of the western portion of the Greater Toronto Area. The boundaries of Oakville, Milton, Mississauga, Halton Hills, Caledon, Brampton, Vaughan and part of Toronto are shown along with the major transmission lines. A dashed line indicates a conceptual transmission corridor through Halton Hills and Caledon, connecting to existing transmission lines in Milton and Vaughan.

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