O. Reg. 24/19: EXPANSION OF NATURAL GAS DISTRIBUTION SYSTEMS

Ontario Energy Board Act, 1998

ONTARIO REGULATION 24/19

EXPANSION OF NATURAL GAS DISTRIBUTION SYSTEMS

Historical version for the period March 8, 2019 to June 30, 2019.

Note: THIS REGULATION IS NOT YET IN FORCE. It comes into force on July 1, 2019, the day section 1 of the Access to Natural Gas Act, 2018 comes into force.

No amendments.

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. 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 Column 1 of the Table to Schedule 1, located as described opposite the project in Column 2 of the Table to Schedule 1; 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.

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. 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.

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.

(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 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, 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 section 4, and

H = reasonable costs of the IESO related to its activities under this Regulation in respect of the quarter.

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.

(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.

(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.

(4) Each gas distributor shall collect the amounts referred to in subsection (1) and remit the amounts to the IESO each month.

(5) Once the total of the maximum amounts of rate reduction set out in Column 3 of the Table to Schedule 1 has been distributed to the gas distributors by the IESO, the IESO shall notify the Board and the gas distributors.

(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.

IESO to distribute amounts collected

7. Once the IESO receives confirmation from the Board that the necessary approvals referred to in section 2 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.

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.

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.	Natural Gas Access for Northern Mining Operations (Taylor Mine) being developed by Union Gas	Taylor Mine Site of Kirkland Lake Gold, Corporation of the Township of Black River-Matheson	1,600,000