O. Reg. 265/19: ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT

 

ontario regulation 265/19

made under the

Electricity Act, 1998

Made: August 15, 2019
Filed: August 16, 2019
Published on e-Laws: August 16, 2019
Printed in The Ontario Gazette: August 31, 2019

Amending O. Reg. 429/04

(ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT)

1. Subsection 5 (1) of Ontario Regulation 429/04 is amended by adding the following definitions:

“cogeneration capacity agreement” means an agreement entered into between the owner or operator of a cogeneration facility and a market participant or consumer that,

(a) provides for the purchase of electricity, and

(b) specifies the maximum capacity that may be purchased;

“cogeneration facility” means a facility that,

(a) generates electricity,

(b) generates steam that is used for industrial, commercial, heating, or cooling purposes,

(c) conveys, either directly or indirectly, the electricity generated at the facility into,

(i) the IESO-controlled grid, or

(ii) the distribution system of a licensed distributor, and

(d) qualifies for treatment as a Class 43.1 facility or has previously qualified as a Class 34 facility under the Income Tax Act (Canada);

2. (1) Paragraph 2 of subsection 8 (3) of the Regulation is amended by striking out “and” at the end of subparagraph ii and adding the following subparagraph:

ii.1 if the transferor is an eligible cogeneration customer in respect of the adjustment period and the transferee is, or may reasonably be expected to be, an eligible cogeneration customer in respect of the adjustment period, the value of “LL.1” as determined under subsection 14 (5.1) shall be used in determining the peak demand factor for the transferee, and

(2) Clause 8 (4) (e) of the Regulation is amended by striking out “licensed distributor” in the portion before subclause (i) and substituting “IESO”.

(3) Paragraph 2 of subsection 8 (5) of the Regulation is amended by striking out “and” at the end of subparagraph ii and adding the following subparagraph:

ii.1 if the transferor is an eligible cogeneration customer in respect of the adjustment period and the transferee is, or may reasonably be expected to be, an eligible cogeneration customer in respect of the adjustment period, the value of “V.1” as determined under subsection 11 (4.2) shall be used in determining the peak demand factor for the transferee, and

3. The Regulation is amended by adding the following sections:

Eligible cogeneration customer

10.7 (1) A market participant or consumer is an eligible cogeneration customer in respect of an adjustment period if the following conditions are satisfied:

1. The market participant or consumer is a Class A market participant or a Class A consumer during the applicable base period.

2. Subject to subsection (2), the market participant or consumer has entered into an agreement with the owner or operator of a cogeneration facility for the purchase and delivery of steam that is used for industrial processes at the facility of the market participant or consumer and the agreement is binding on the market participant or consumer as of the first day of the applicable base period.

3. The market participant or consumer has entered into a cogeneration capacity agreement with the owner or operator of the cogeneration facility mentioned in paragraph 2 in respect of the applicable base period and the agreement is binding on the market participant or consumer as of the first day of the applicable base period.

4. In respect of any capacity purchased by the market participant or consumer under the cogeneration capacity agreement mentioned in paragraph 3, the market participant or consumer does not participate in the IESO’s Demand Response Auctions and Pilots established under the market rules or any capacity auction conducted by the IESO during the applicable base period.

5. In the case of a market participant, the market participant has provided to the IESO, in accordance with subsection (3), the documents mentioned in subsection (3).

6. In the case of a consumer, the consumer has provided to the IESO and the licensed distributor serving the consumer, in accordance with subsection (3), the documents mentioned in subsection (3).

(2) Paragraph 2 of subsection (1) does not apply in respect of a market participant or consumer who,

(a) entered into a cogeneration capacity agreement before January 1, 2005, whether or not that agreement has been renewed, extended or otherwise amended and whether or not that agreement has been superseded by a cogeneration capacity agreement described in paragraph 3 of subsection (1); and

(b) has provided a copy of all applicable cogeneration capacity agreements to the IESO.

(3) For the purposes of paragraphs 5 and 6 of subsection (1), the following rules apply with respect to the provision of documents to the IESO or to the IESO and the licensed distributor, as the case may be:

1. If the cogeneration capacity agreement mentioned in paragraph 3 of subsection (1) is in respect of the adjustment period that begins on July 1, 2020,

i. on or before August 31, 2019, a letter must be provided by or on behalf of the market participant or the consumer, as the case may be, attesting to, specifying and confirming the capacity provided to or purchased by the market participant or consumer in respect of the applicable base period under the agreement, and

ii. on or before October 31, 2019, a copy of the agreement must be provided.

2. If the cogeneration capacity agreement mentioned in paragraph 3 of subsection (1) is in respect of an adjustment period that begins on or after July 1, 2021, a letter described in subparagraph 1 i and a copy of the agreement must be provided on or before the first day of the applicable base period.

Information to be given to IESO, licensed distributor

10.8 (1) A market participant that is an eligible cogeneration customer in respect of an adjustment period shall give the IESO such information as the IESO may require for the purposes of subsection 11 (4.3).

(2) A consumer that is an eligible cogeneration customer in respect of an adjustment period shall give the IESO and the licensed distributor serving the consumer such information as the IESO and the licensed distributor may require for the purposes of subsections 11 (5.2) and 14 (5.2).

(3) The owner or operator of a cogeneration facility shall give the IESO and the licensed distributor serving the consumer such information as either the IESO or the licensed distributor, as the case may be, requires for the purposes of subsections 11 (4.3), (5.2) or 14 (5.2).

(4) If information is required under this section, it shall be given in the form and before the expiry of the period specified by the IESO or the licensed distributor, as the case may be.

4. (1) Paragraph 1 of subsection 11 (2) of the Regulation is amended by adding “Subject to paragraph 1.1” at the beginning of the portion before subparagraph i.

(2) Subsection 11 (2) of the Regulation is amended by adding the following paragraph:

1.1 For the purposes of applying paragraph 1, in the case of a Class A market participant that is an eligible cogeneration customer in respect of the adjustment period, the Class A market participant’s peak demand factor for the adjustment period shall be determined under subsection (4.2) instead of under subsection (4).

(3) Subparagraph 2 i of subsection 11 (2) of the Regulation is amended by striking out “subsection (4)” and substituting “subsection (5)”.

(4) Section 11 of the Regulation is amended by adding the following subsections:

(4.2) For the purposes of paragraph 1.1 of subsection (2), the peak demand factor of a Class A market participant that is an eligible cogeneration customer in respect of the adjustment period is calculated to eight decimal places using the formula,

(V – V.1) /W

in which,

  “V” has the same meaning as in subsection (4),

“V.1”  is, subject to subsection (4.3), the volume of electricity conveyed into the IESO-controlled grid by one or more cogeneration facilities during the peak hours in the applicable base period, pursuant to one or more cogeneration capacity agreements between the owners or operators of cogeneration facilities and the Class A market participant, and

“W” has the same meaning as in subsection (4).

(4.3) The following rules apply for the purposes of determining the value of “V.1” in the formula set out in subsection (4.2):

1. If the value of “V.1” is greater than the value of “V”, the value of “V” shall be substituted for the value of “V.1”.

2. For the purposes of determining “V.1”, a volume of electricity shall only be included if the IESO is satisfied that the same volume of electricity was generated using capacity that is not the subject of a procurement contract entered into with the IESO or a capacity auction conducted by the IESO.

3. For the purposes of determining “V.1”, the IESO shall rely on,

i. the information provided in the applicable cogeneration capacity agreement provided as described in section 10.7 to the IESO by the Class A market participant, and

ii. such other information as the IESO may require under section 10.8 for the purposes of this subsection.

(5) Subsection 11 (5) of the Regulation is amended by adding “Subject to subsection (5.1)” at the beginning.

(6) Section 11 of the Regulation is amended by adding the following subsections:

(5.1) If a licensed distributor who is a market participant distributes electricity to Class A consumers who are eligible cogeneration customers in respect of an adjustment period, the peak demand factor of the licensed distributor for the adjustment period is the amount calculated to eight decimal places using the formula,

(X – X.1) /W

in which,

  “X” is the total volume of electricity distributed during the peak hours in the applicable base period to consumers who are Class A consumers for the adjustment period by the licensed distributor or by a wholly-embedded distributor of which the licensed distributor is the host distributor,

“X.1”  is, subject to subsection (5.2), the volume of electricity conveyed into the distribution system of the licensed distributor by one or more cogeneration facilities during the peak hours in the applicable base period, pursuant to one or more cogeneration capacity agreements between the owners or operators of cogeneration facilities and the licensed distributor’s customers who are both Class A consumers and eligible cogeneration customers, and

“W” has the same meaning as in subsection (4).

(5.2) The following rules apply for the purposes of determining the value of “X.1” in the formula set out in subsection (5.1):

1. If the value of “X.1” is greater than the value of “X”, the value of “X” shall be substituted for the value of “X.1”.

2. For the purposes of determining “X.1”, a volume of electricity shall only be included if the IESO is satisfied that the same volume of electricity was generated using capacity that is not the subject of a procurement contract entered into with the IESO or a capacity auction conducted by the IESO.

3. For the purposes of determining “X.1”, the licensed distributor shall rely on,

i. the cogeneration capacity agreements provided as described in section 10.7 by each of the licensed distributor’s customers who are both Class A consumers and eligible cogeneration customers, and

ii. such other information as the licensed distributor may require under section 10.8 for the purposes of this subsection.

(7) Subsection 11 (11) of the Regulation is revoked and the following substituted:

(11) The IESO shall provide written notice to each Class A market participant and to each licensed distributor who is a market participant of its peak demand factor, as calculated under this section for each adjustment period, on or before May 31 in the same calendar year in which the adjustment period commences.

5. (1) Subsection 14 (5) of the Regulation is amended by adding “Subject to subsection (5.1)” at the beginning.

(2) Section 14 of the Regulation is amended by adding the following subsections:

(5.1) If a Class A consumer is an eligible cogeneration customer in respect of an adjustment period, the peak demand factor of the consumer for the adjustment period is the amount calculated to eight decimal places using the formula,

(LL – LL.1) /W

in which,

“LL” has the same meaning as in subsection (5),

“LL.1” is, subject to subsection (5.2), the volume of electricity conveyed into the distribution system of the licensed distributor by one or more cogeneration facilities during the peak hours in the applicable base period, pursuant to one or more cogeneration capacity agreements between the owners or operators of the cogeneration facilities and the Class A consumer, and

“W” has the same meaning as in subsection 11 (4).

(5.2) The following rules apply for the purposes of determining the value of “LL.1” in the formula set out in subsection (5.1):

1. If the value of “LL.1” is greater than the value of “LL”, the value of “LL” shall be substituted for the value of “LL.1”.

2. For the purposes of determining “LL.1”, a volume of electricity shall only be included if the IESO is satisfied that the same volume of electricity was generated using capacity that is not the subject of a procurement contract entered into with the IESO or a capacity auction conducted by the IESO.

3. For the purposes of determining “LL.1”, the licensed distributor shall rely on,

i. the cogeneration capacity agreements provided as described in section 10.7 by the Class A consumer, and

ii. such other information as the licensed distributor may require under section 10.8 for the purposes of this subsection.

4. For the purposes of paragraph 2, the IESO shall provide to the licensed distributor its determination in respect of each cogeneration capacity agreement of each of the licensed distributor’s customers on or before May 31 in the same calendar year in which the adjustment period commences.

(3) Subsection 14 (11) of the Regulation is revoked and the following substituted:

(11) A licensed distributor shall provide written notice to each Class A consumer of its peak demand factor, as calculated under this section for each adjustment period, on or before May 31 in the same calendar year in which the adjustment period commences.

Commencement

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