O. Reg. 353/15: PAYMENTS UNDER SECTION 78.1 OF THE ACT

 

ontario regulation 353/15

made under the

Ontario Energy Board Act, 1998

Made: November 25, 2015
Filed: November 27, 2015
Published on e-Laws: November 27, 2015
Printed in The Ontario Gazette: December 12, 2015

Amending O. Reg. 53/05

(PAYMENTS UNDER SECTION 78.1 OF THE ACT)

1. Subsection 0.1 (1) of Ontario Regulation 53/05 is amended by adding the following definitions:

“Darlington Refurbishment Project” means the work undertaken by Ontario Power Generation Inc. in respect of the refurbishment, in whole or in part, of some or all of the generating units of the Darlington Nuclear Generating Station;

“deferral period” means the period beginning on January 1, 2017, and ending when the Darlington Refurbishment Project ends;

“nuclear facilities” means the nuclear generation facilities prescribed in paragraphs 3, 4 and 5 of section 2;

2. The Regulation is amended by adding the following section:

Darlington refurbishment rate smoothing deferral account

5.5 (1) Ontario Power Generation Inc. shall establish a deferral account in connection with section 78.1 of the Act that records, on and after the commencement of the deferral period, the difference between,

(a) the revenue requirement amount approved by the Board that, but for subparagraph 12 i of subsection 6 (2) of this Regulation, would have been used in connection with determining the payments to be made under section 78.1 of the Act each year during the deferral period in respect of the nuclear facilities; and

(b) the portion of the revenue requirement amount referred to in clause (a) that is used in connection with determining the payments made under section 78.1 of the Act, after determining, under subparagraph 12 i of subsection 6 (2) of this Regulation, the amount of the revenue requirement to be deferred for that year in respect of the nuclear facilities.

(2) Ontario Power Generation Inc. shall record interest on the balance of the account at a long-term debt rate reflecting Ontario Power Generation Inc.’s cost of long-term borrowing that is determined or approved by the Board from time to time, compounded annually.

3. (1) Paragraph 4 of subsection 6 (2) of the Regulation is amended by striking out the portion before subparagraph i and substituting the following:

4. The Board shall ensure that Ontario Power Generation Inc. recovers capital and non-capital costs and firm financial commitments incurred in respect of the Darlington Refurbishment Project or incurred to increase the output of, refurbish or add operating capacity to a generation facility referred to in section 2, including, but not limited to, assessment costs and pre-engineering costs and commitments,

. . . . .

(2) Subsection 6 (2) of the Regulation is amended by adding the following paragraph:

12. For the purposes of section 78.1 of the Act, in setting payment amounts for the nuclear facilities during the deferral period,

i. the Board shall determine the portion of the Board-approved revenue requirement for the nuclear facilities for each year that is to be recorded in the deferral account established under subsection 5.5 (1), with a view to making more stable the year-over-year changes in the payment amount that is used in the determination of the undeferred payments made under section 78.1 of the Act with respect to the nuclear facilities,

ii. the Board shall determine the approved revenue requirements referred to in subsection 5.5 (1) and the amount of the approved revenue requirements to be deferred under subparagraph i on a five-year basis for the first 10 years of the deferral period and, thereafter, on such periodic basis as the Board determines,

iii. for greater certainty, the Board’s determination of Ontario Power Generation Inc.’s approved revenue requirement for the nuclear facilities shall not be restricted by the yearly changes in payment amounts in subparagraph i,

iv. the Board shall ensure that Ontario Power Generation Inc. recovers the balance recorded in the deferral account established under subsection 5.5 (1), and the Board shall authorize recovery of the balance on a straight line basis over a period not to exceed 10 years commencing at the end of the deferral period, and

v. the Board shall accept the need for the Darlington Refurbishment Project in light of the Plan of the Ministry of Energy known as the 2013 Long-Term Energy Plan and the related policy of the Minister endorsing the need for nuclear refurbishment.

Commencement

4. This Regulation comes into force on the later of January 1, 2016 and the day it is filed.