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Ontario Energy Board Act, 1998

ONTARIO REGULATION 24/19

EXPANSION OF NATURAL GAS DISTRIBUTION SYSTEMS

Consolidation Period:  From June 8, 2021 to the e-Laws currency date.

Last amendment: 451/21.

Legislative History: 451/21.

This is the English version of a bilingual regulation.

Natural gas distribution system

1. For the purposes of section 36.2 of the Act and this Regulation,

“consumer” means a person who uses natural gas in Ontario for that person’s own consumption; (“consommateur”)

“natural gas distribution system” means a system for distributing natural gas by hydrocarbon pipeline in Ontario and includes any structures, equipment or other things used for that purpose. (“réseau de distribution de gaz naturel”)

Qualifying investment

2. (1) Subject to subsection (2), for the purposes of the definition of “qualifying investment” in subsection 36.2 (1) of the Act, an investment is a qualifying investment if it is in respect of a project,

(a) that is listed in,

(i) Column 1 of the Table to Schedule 1, located as described opposite the project in Column 2 of the Table to Schedule 1, or

(ii) Column 1 of the Table to Schedule 2, located as described opposite the project in Column 2 of the Table to Schedule 2; and

(b) in respect of which the gas distributor has obtained all necessary approvals from the Board to authorize the expansion of a natural gas distribution system. O. Reg. 451/21, s. 1.

(2) The following rules apply to any project listed in Column 1 of the Table to Schedule 2 that requires a Board order under section 96 of the Act granting leave to construct a hydrocarbon line:

1. If the gas distributor fails to apply for the Board order on or before December 31, 2025, investments in the project are no longer eligible to be qualifying investments.

2. If the gas distributor applies for and receives the Board order but the leave to construct is terminated because construction of the hydrocarbon line has not commenced within the time specified in the order, subject to any further time extensions by the Board, any investments in the project are no longer qualifying investments.

3. If the gas distributor applies for and receives the Board order but the Board notifies the gas distributor that the order has been revoked, any investments in the project are no longer qualifying investments. O. Reg. 451/21, s. 1.

(3) The Board shall provide the gas distributor and the IESO with notice as soon as reasonably possible,

(a) if investments in a project are no longer eligible to be qualifying investments due to the application of paragraph 1 of subsection (2); or

(b) if investments in a project are no longer qualifying investments due to the application of paragraph 2 or 3 of subsection (2). O. Reg. 451/21, s. 1.

Consumers eligible for rate protection

3. For the purposes of subsection 36.2 (2) of the Act, a consumer who meets the following criteria is prescribed as eligible for rate protection:

1. As a result of the qualifying investment, the consumer is provided access or would be provided access to the natural gas distribution system of a gas distributor that has incurred costs related to the qualifying investment.

2. The consumer has no access to a natural gas distribution system or had no access to a natural gas distribution system before being provided the access referred to in paragraph 1.

Variance accounts

4. (1) The IESO and gas distributors to which section 36 of the Act applies shall establish one or more variance accounts for the purposes of tracking amounts collected, remitted and distributed under this Regulation. O. Reg. 24/19, s. 4 (1).

(2) Every gas distributor that is making a qualifying investment in one or more projects listed in Column 1 of the Table to Schedule 2 shall establish one or more variance accounts for the purpose of tracking amounts distributed to them by the IESO under this Regulation in respect of the gas distributor’s projects listed in Column 1 of the Table to Schedule 2. O. Reg. 451/21, s. 2.

Calculation of rate reduction

5. (1) The IESO shall calculate the amount of rate reduction in respect of which a gas distributor is entitled to receive compensation for lost revenue under section 36.2 of the Act in accordance with this section. O. Reg. 24/19, s. 5 (1).

(2) The amount of rate reduction shall be calculated in respect of each qualifying investment and in respect of each fiscal quarter by applying the following rules:

1. Subject to paragraph 2, the maximum amount of the rate reduction that may be provided over the course of all fiscal quarters is the amount set out in Column 3 of the Table to Schedule 1 or 2, as applicable, opposite the project in respect of which the qualifying investment is made.

2. The maximum amount of the rate reduction that may be provided in respect of the fiscal quarter shall not exceed the amount of contributions collected by gas distributors from consumers and remitted by gas distributors to the IESO in respect of the fiscal quarter.

3. The following steps shall be taken to determine the amount:

i. Determine the remaining value for the qualifying investment by applying the following formula:

A = B - C

Where,

A = the remaining value for the qualifying investment,

B = the amount set out opposite the qualifying investment in Column 3 of the Table to Schedule 1 or 2, as applicable, and

C = the sum of all amounts of rate reduction provided under section 36.2 of the Act during all previous quarters in respect of the qualifying investment.

ii. Determine the amount of rate reduction by applying the following formula:

D = A ÷ E × (F + G - H)

Where,

D = the amount of rate reduction,

A = the remaining value for the qualifying investment, as determined under subparagraph i,

E = the sum of the remaining value for the qualifying investment and the remaining values for all other qualifying investments, each as determined under subparagraph i,

F = the sum of the monthly amounts collected by gas distributors from consumers under section 6 and remitted to the IESO in respect of the quarter,

G = any interest accumulated in respect of the quarter in the IESO’s variance account referred to in subsection 4 (1), and

H = reasonable costs of the IESO related to its activities under this Regulation in respect of the quarter. O. Reg. 24/19, s. 5 (2); O. Reg. 451/21, s. 3.

Collection from consumers of amounts to compensate gas distributors

6. (1) Subject to subsection (6), each gas distributor to which section 36 of the Act applies shall, in order to provide for the contributions payable by consumers under subsection 36.2 (4) of the Act, collect from each of their consumers the amount of one dollar per month for each account that the consumer has with the gas distributor. O. Reg. 24/19, s. 6 (1).

(2) Subject to subsection (3), the gas distributor shall aggregate the amount mentioned in subsection (1) together with the amount that the gas distributor collects from the consumer as a fixed customer charge or fixed monthly service charge and display the total amount on the consumer’s bill as one amount under that charge. O. Reg. 24/19, s. 6 (2).

(3) If a gas distributor does not provide for a fixed customer charge or fixed monthly service charge on the consumer’s bill, the gas distributor shall aggregate the amount mentioned in subsection (1) together with the amount that the gas distributor collects from the consumer in respect of any other charge. O. Reg. 24/19, s. 6 (3).

(4) Each gas distributor shall collect the amounts referred to in subsection (1) and remit the amounts to the IESO each month. O. Reg. 24/19, s. 6 (4).

(5) Once the total of the maximum amounts of rate reduction set out in Column 3 of the Table to Schedule 1 or 2, as applicable, has been distributed to the gas distributors by the IESO, the IESO shall notify the Board and the gas distributors. O. Reg. 24/19, s. 6 (5); O. Reg. 451/21, s. 4.

(6) As soon as it is reasonably practicable to do so after receiving notification under subsection (5), the gas distributors shall cease collecting from consumers the charge and remit to the IESO any amounts that have been collected but not yet remitted. O. Reg. 24/19, s. 6 (6).

IESO to distribute amounts collected

7. (1) Subject to subsections (2) and (3), once the IESO receives confirmation from the Board that the necessary approvals referred to in subsection 2 (1) have been obtained in respect of a project in respect of which a qualifying investment is made, the IESO shall distribute to the applicable gas distributor the amount of compensation to which it is entitled under subsection 36.2 (3) of the Act for each fiscal quarter, calculated in accordance with section 5 of this Regulation. O. Reg. 451/21, s. 5.

(2) If the IESO receives notice under clause 2 (3) (a) that an investment in a gas distributor’s project is no longer eligible to be a qualifying investment, any amounts remitted to the IESO under subsection 6 (4) which were originally allocated for distribution in respect of that project under subsection (1) are deemed, for the purposes of section 8, to be amounts of rate reduction that exceed the amount required to compensate gas distributors. O. Reg. 451/21, s. 5.

(3) If the IESO receives notice under clause 2 (3) (b) that investments in a gas distributor’s project are no longer qualifying investments, the IESO shall immediately cease distributing compensation under subsection (1) in respect of the project. O. Reg. 451/21, s. 5.

Remittance to the IESO if investments are no longer qualifying investments

7.1 (1) A gas distributor that receives notice under subsection 2 (3) that investments in their project are no longer qualifying investments shall remit to the IESO any amounts it received from the IESO under subsection 7 (1) in respect of the project. O. Reg. 451/21, s. 5.

(2) The amounts must be remitted to the IESO within 30 days after the day the gas distributor received the notice. O. Reg. 451/21, s. 5.

(3) Any amounts remitted to the IESO under this section are deemed, for the purposes of section 8, to be amounts of rate reduction that exceed the amount required to compensate gas distributors. O. Reg. 451/21, s. 5.

Money collected in excess, interest

8. (1) This section applies if gas distributors have collected an amount of rate reduction under section 6 that exceeds the amount required to compensate gas distributors and have remitted the amount in excess to the IESO.

(2) The IESO shall deduct from the amount in excess the reasonable costs of the IESO related to its activities under this Regulation that have not been deducted previously.

(3) After making the deduction under subsection (2), the IESO shall return the remaining amount in excess to the gas distributors, having regard to the total amount collected by each gas distributor from consumers under section 6 relative to the total amounts collected by all gas distributors under that section.

(4) The IESO shall apply any interest earned on amounts included in its variance account by adding the interest to the amounts mentioned in subsection (3) to be returned to gas distributors.

(5) Gas distributors shall report to the Board with respect to the amounts returned to them under this section.

Information, etc.

9. (1) The IESO is prescribed for the purposes of subsection 36.2 (5) of the Act.

(2) The following persons or entities shall provide information and reports requested by the Minister to the Minister:

1. Each gas distributor making a qualifying investment.

2. The IESO.

3. The Board.

(3) The following persons or entities shall provide information and reports requested by the Board to the Board:

1. Each gas distributor making a qualifying investment.

2. The IESO.

(4) The information and reports mentioned in subsections (2) and (3) shall be provided within the time specified by the Minister or the Board, as the case may be, in the request.

Information, IESO

10. For the purposes of this Regulation, the IESO shall rely on the information provided to it by gas distributors.

Quarterly reports for Sched. 2 projects

10.1 (1) Every gas distributor that is making a qualifying investment in respect of a project set out in the Table to Schedule 2 shall provide a quarterly report in accordance with this section to the Ministry of Energy, Northern Development and Mines. O. Reg. 451/21, s. 6.

(2) A quarterly report must be provided on or before January 1, April 1, July 1 and October 1 in each year up until the final report date of January 1, 2027. O. Reg. 451/21, s. 6.

(3) The quarterly reports must include the following information in respect of each of the projects:

1. The status of any community consultations undertaken by the gas distributor in respect of the project.

2. The expected timeline for the filing of an application for leave to construct a hydrocarbon line under section 90 of the Act, if such an application is required.

3. Progress updates on every necessary approval and permit for the project other than the leave to construct referred to in paragraph 2.

4. The schedule for construction of the project and the progress made in the preceding quarter.

5. Confirmation of the date on which the project is anticipated to come into service or the date on which the project came into service, as applicable.

6. The number of consumers in each of the following classes who have been connected or who are anticipated to be connected to the gas distributor’s natural gas distribution system as a result of the project:

i. Residential consumers.

ii. Commercial consumers.

iii. Institutional consumers.

iv. Agricultural consumers.

v. Industrial consumers.

7. The amounts in any variance accounts established by the gas distributor under subsection 4 (2) in respect of the project. O. Reg. 451/21, s. 6.

11. Omitted (provides for coming into force of provisions of this Regulation).

SCHEDULE 1

Item

Column 1
Name of project in respect of which investment is made

Column 2
Location of project

Column 3
Maximum amount of rate reduction, in dollars

1.

Southern Bruce Project being developed by EPCOR Southern Bruce Gas Inc.

Southern Bruce County with some facilities in Grey County

22,000,000

2.

Cornwall Island Project being developed by Enbridge Gas

Cornwall Island

3,450,000

3.

Chippewas of the Thames First Nation Project being developed by Union Gas

On or adjacent to the Chippewas of the Thames First Nation Reserve, Middlesex County

1,430,000

4.

Saugeen First Nation Project being developed by Union Gas

Saugeen First Nation and adjacent areas, Bruce County

1,800,000

5.

Scugog Island Project being developed by Enbridge

Community of Scugog Island, Township of Scugog, Regional Municipality of Durham

6,420,000

6.

Hiawatha First Nation Project being developed by Enbridge

Hiawatha First Nation and parts of the Township of Otonabee-South Monaghan

3,140,000

7.

North Shore and Peninsula Roads Project being developed by Union Gas

Northshore Rd. and Peninsula Rd. areas of the City of North Bay

8,670,000

8.

Chatham-Kent Rural Pipeline Expansion being developed by Union Gas

The former Dover Township in the Municipality of Chatham-Kent

8,000,000

9.

Revoked: O. Reg. 451/21, s. 7.

 

Schedule 2

Item

Column 1
Name of project in respect of which investment is made

Column 2
Location of project

Column 3
Maximum amount of rate reduction, in dollars

1.

Bobcaygeon Project being developed by Enbridge Gas

Bobcaygeon and currently unserved areas within the City of Kawartha Lakes

68,029,650

2.

Boblo Island Project being developed by Enbridge Gas

Boblo Island (Town of Amherstburg)

1,915,672

3.

Brockton Project being developed by EPCOR Utilities

Throughout the Municipality of Brockton, and in the communities of Elmwood, Vesta, Solway, Glammis, Cargill, Chepstow, Pinkerton, Narva, Greenock, and Riversdale

20,340,000

4.

Burk’s Falls Project being developed by Enbridge Gas

Unserved areas within the Village of Burk’s Falls

1,237,071

5.

Caledon (Humber Station) Project being developed by Enbridge Gas

Town of Caledon along Humber Station Road

5,048,975

6.

Cedar Springs Project being developed by Enbridge Gas

Community of Cedar Springs within the City of Burlington

2,517,260

7.

Chute-à-Blondeau Project being developed by Enbridge Gas

Community of Chute-à-Blondeau in the Township of East Hawkesbury

4,446,983

8.

East Gwillimbury (North and East) Project being developed by Enbridge Gas

Northern part of the Town of East Gwillimbury

8,373,365

9.

Eganville Project being developed by Enbridge Gas

Community of Eganville within the Township of Bonnechere Valley and along Cobden Road in the Township of Admaston/Bromley

26,169,413

10.

Glendale Subdivision Project being developed by Enbridge Gas

Glendale Subdivision within the Township of South Glengarry

2,352,112

11.

Grimsby-Lincoln (Economic Development) Project being developed by Enbridge Gas

Grimsby-Lincoln area of the Niagara Peninsula

4,295,182

12.

Haldimand Shores Project being developed by Enbridge Gas

Community of Haldimand Shores in the Grafton area of the Township of Alnwick/Haldimand

2,827,923

13.

Hamilton Airport Regional Expansion (Economic Development) Project being developed by Enbridge Gas

Hamilton Airport Employment Growth District and Red Hill Business Park lands

10,331,404

14.

Hidden Valley (Huntsville) Project being developed by Enbridge Gas

Community of Hidden Valley in the Township of Huntsville

1,899,859

15.

Kenora District (Highway 594) Project being developed by Enbridge Gas

Along Highway 594 in the District of Kenora, west of the City of Dryden

956,804

16.

Lanark and Balderson Project being developed by Enbridge Gas

Community of Lanark within the Township of Lanark Highlands and the Community of Balderson within the Township of Drummond/North Elmsley

12,673,429

17.

Merrickville-Wolford Project being developed by Enbridge Gas

North of the Rideau River in the Community of Merrickville

2,465,037

18.

Mohawks of the Bay of Quinte First Nation Project being developed by Enbridge Gas

Community of Mohawks of the Bay of Quinte First Nation and parts of the Community of Shannonville in Tyendinaga Mohawk Territory

8,080,907

19.

Neustadt Project being developed by Enbridge Gas

Community of Neustadt in the Municipality of West Grey

5,128,997

20.

Perth East (Brunner) Project being developed by Enbridge Gas

Community of Brunner in the Township of Perth East

814,850

21.

Prince Edward County (Cherry Valley) Project being developed by Enbridge Gas

Community of Cherry Valley in Prince Edward County

5,206,389

22.

Red Rock First Nation (Lake Helen Reserve) Project being developed by Enbridge Gas

Community of Red Rock First Nation (Lake Helen Reserve 53A)

3,295,103

23.

Sandford Project being developed by Enbridge Gas

Community of Sandford within the Township of Uxbridge

4,392,566

24.

Selwyn Project being developed by Enbridge Gas

Along 8th Line in the Township of Selwyn

1,674,964

25.

Severn (Washago) Project being developed by Enbridge Gas

Community of Washago in the Township of Severn

19,204,171

26.

St. Charles Project being developed by Enbridge Gas

Municipality of St. Charles in Sudbury District

6,385,185

27.

Stanley’s Olde Maple Lane Farm Project being developed by Enbridge Gas

Stanley’s Olde Maple Lane Farm and northern parts of York’s Corners Road in the City of Ottawa

376,205

28.

Tweed Project being developed by Enbridge Gas

Unserved areas within the Municipality of Tweed

3,800,656

O. Reg. 451/21, s. 8.

 

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