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O. Reg. 622/20: PAYMENTS UNDER SECTION 78.1 OF THE ACT

filed November 6, 2020 under Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. B

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ontario regulation 622/20

made under the

Ontario Energy Board Act, 1998

Made: November 5, 2020
Filed: November 6, 2020
Published on e-Laws: November 6, 2020
Printed in The Ontario Gazette: November 21, 2020

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:

“base payment amount” means the payment amount approved by the Board in respect of output from the hydroelectric facilities, excluding any fixed or variable payment amount rider;

“Pickering closure” means the closure or decommissioning of the Pickering A Nuclear Generating Station or Pickering B Nuclear Generating Station, or the retirement of a generating unit at the Pickering A Nuclear Generating Station or Pickering B Nuclear Generating Station from electricity generation;

“Pickering closure activities” means any activities in furtherance of a Pickering closure.

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

Pickering closure costs deferral account

5.6 (1) Ontario Power Generation Inc. shall establish a deferral account in connection with section 78.1 of the Act that records any employment-related costs and non-capital costs related to third party service providers incurred by Ontario Power Generation Inc. that arise from any Pickering closure activities, including,

(a)  costs related to employee termination, layoff, reassignment or retraining; and

(b)  costs related to the hiring of employees or the engagement of third party service providers to perform Pickering closure activities, and their remuneration.

(2) Subsection (1) applies whether the costs are incurred before or after a Pickering closure, but does not apply to,

(a)  costs that are eligible for recovery by Ontario Power Generation Inc. under the Ontario Nuclear Funds Agreement; or

(b)  for greater certainty, costs that have already been included in an order made by the Board under section 78.1 of the Act.

(3) Ontario Power Generation Inc. shall record Pickering closure costs in the deferral account as they are reflected in the audited financial statements approved by the board of directors of Ontario Power Generation Inc., and shall record interest on the balance of the account as the Board may direct.

3. (1) Subsection 6 (2) of the Regulation is amended by adding the following paragraphs:

7.2  The Board shall ensure that the balance recorded in the deferral account established under subsection 5.6 (1) and related income tax effects are recovered on a straight line basis over a period not to exceed 10 years beginning on the day the last generating unit of the Pickering A Nuclear Generating Station and Pickering B Nuclear Generating Station permanently stops generating electricity, to the extent that the Board is satisfied that the costs were prudently incurred and are accurately recorded in the account.

. . . . .

13.  In making its first order under section 78.1 of the Act that is effective on or after January 1, 2022 setting payment amounts for the hydroelectric facilities, the following rules apply:

i.  The order shall provide for a base payment amount for the hydroelectric facilities that is equal to the base payment amount for the hydroelectric facilities on December 31, 2021, and that applies until the effective date of a subsequent order setting payment amounts for the hydroelectric facilities that comes into effect after Dec 31, 2026.

ii.  Subparagraph i applies with respect to only 50 per cent of the output of the Chats Falls generation facility.

(2) Section 6 of the Regulation is amended by adding the following subsection:

(3) For greater certainty, the rule set out in paragraph 13 of subsection (2) does not affect any authority of the Board to approve,

(a)  changes to the hydroelectric incentive mechanism applicable to Ontario Power Generation Inc.;

(b)  the establishment of or changes to deferral or variance accounts relating to the hydroelectric facilities; or

(c)  the recovery of any amounts relating to the hydroelectric facilities that are recorded by Ontario Power Generation Inc. in a deferral or variance account referred to in clause (b), or any related payment amount riders.

Commencement

4. This Regulation comes into force on the day it is filed.