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Ontario Fair Hydro Plan Act, 2017

S.o. 2017, chapter 16
Schedule 1

Consolidation Period: From May 29, 2019 to the e-Laws currency date.

Last amendment: 2019, c. 7, Sched. 17, s. 133, 170.

Legislative History: 2019, c. 6, Sched. 3, s. 1-10; 2019, c. 7, Sched. 17, s. 133, 170.

CONTENTS

Preamble

PART I
GENERAL

1.

Interpretation

1.

Interpretation

1.1

References to terms in contract, instrument

1.2

Waiver of subrogation rights under Protection Agreement

1.3

Protection against liability of specified consumers

1.4

Protection against liability of electricity vendors and unit sub-meter providers

1.5

Protection against liability of IESO

1.6

Enforcement remedies of secured parties unaffected

1.7

Computation of amounts under funding obligations, etc.

1.8

Protection against liability of Ontario Power Generation Inc. or Crown as principal

2.

Effect of invalidity

3.

Purposes

4.

Crown bound

5.

Protection and assurances

5.

Protection

PART II
FAIR ADJUSTMENT

6.

Definition

7.

Regulated rate consumers, first adjustments

8.

Other specified consumers, first adjustments

9.

Determinations by Board

10.

Implementation by electricity vendors

11.

Subsequent adjustments

12.

Sub-metering

PART II
PAYMENTS BY THE CROWN AND BY ONTARIO POWER GENERATION INC.

6.

Payments by Crown

7.

Calculation of amounts payable by Crown

8.

Payments by Ontario Power Generation Inc.

9.

Application of amounts by the Fair Hydro Trust

10.

Contract references, finance amount

PART III
CLEAN ENERGY ADJUSTMENT

13.

Specified consumers to pay

14.

Irrevocability of amount

15.

Determination of clean energy adjustment

16.

IESO to receive amounts

17.

Electricity vendor to invoice specified consumers

PART III
FINANCIAL SERVICES MANAGER

11.

Ontario Power Generation Inc. to continue as Financial Services Manager

12.

Duties of Financial Services Manager

13.

No further funding obligations to be incurred

14.

No further financing entities to be established

15.

Amendment to Financing Plan

PART IV
IMPLEMENTATION

Financial Services Manager

18.

Appointment

19.

Duties and powers

Fair Allocation Amount

20.

Minister to calculate fair allocation amount

Financing Plan

21.

Financial Services Manager to prepare Financing Plan

22.

Incurrence of funding obligations

PART IV
THE INVESTMENT ASSET

16.

Validity of transfer

17.

Investment asset

18.

Investment asset owner may grant security interest

PART V
THE REGULATORY ASSET

23.

IESO deferral

24.

Variance account to be established, maintained

25.

Regulatory asset established

26.

Transfer of regulatory asset

27.

Validity of transfer

PART VI
THE INVESTMENT ASSET

28.

Investment asset established

29.

Investment asset, irrevocable rights and interests

30.

Transfer of investment interest

31.

Validity of transfer

32.

Investment interest owner may grant security interest

PART VII
MISCELLANEOUS

33.

Appointment of agent, invoicing or collection

33.

Sequestration

34.

Board’s authority

34.

Choice of law

35.

Sequestration

36.

Choice of law

37.

Conflict

38.

No further approvals, etc.

39.

Liability

40.

References in marketing materials and offering documents

40.

Compliance and restraining orders

41.

Compliance and restraining orders

42.

Regulations

 

Preamble

The Government of Ontario is committed to fostering the development of a clean, modern and reliable electricity system with a diverse supply mix. The Government is also committed to removing barriers to and promoting opportunities for renewable and clean energy projects. These commitments can only be achieved if costs are shared fairly among consumers, today and in the future.

Electricity rates have risen for two key reasons. First, decades of under-investment in the electricity system resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable. Second, the decision to eliminate Ontario’s use of coal and produce clean, renewable power has created additional costs.

The actions taken to achieve a clean, modern and reliable electricity system have resulted in significant costs to residential consumers. The burden of financing these system improvements and funding key programs has unfairly fallen almost entirely on the shoulders of those consumers.

The Government of Ontario is committed to ensuring that the costs of financing these investments and the associated charges to consumers are allocated fairly among present and future generations. 

Recognizing that the electricity infrastructure that has been built and the policy decisions that have been made will create benefits for years to come, costs should be allocated fairly over time, so that residential consumers in the future pay their fair share for the benefits that they receive from the investments already made. 

Note: On November 1, 2019, the Preamble to the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 1)

Part i
General

Interpretation

Definitions

1 (1) In this Act,

“Board” means the Ontario Energy Board; (“Commission”)

“clean energy adjustment” means the amount determined under section 15 and payable by specified consumers; (“ajustement pour l’énergie propre”)

“clean energy benefits” means the value of the benefits determined to be derived by or accruing to specified consumers as a result of the clean energy initiative, including as a result of clean energy costs; (“avantages de l’énergie propre”)

“clean energy costs” means the value of the costs allocated to specified consumers as a result of the clean energy initiative, including as a result of past, present and expected costs incurred in respect of,

(a) the amounts to be paid or reflected by the IESO in adjustments made under section 25.33 of the Electricity Act, 1998 or any provision that is the successor to that provision, which relate to contracts or amounts for,

(i) renewable energy generation or capacity,

(ii) conservation and demand management,

(iii) energy storage,

(iv) energy efficiency,

(v) natural gas generation and capacity, excluding contracts relating to amounts payable by the IESO under section 78.2 of the Ontario Energy Board Act, 1998 and excluding such other contracts as may be prescribed,

(b) payments made or expected to be made under section 78.5 of the Ontario Energy Board Act, 1998, and

(c) such other costs or estimated costs as may be prescribed; (“coûts de l’énergie propre”)

“clean energy initiative” means the policies of the Government of Ontario related to,

(a) eliminating coal generation and fostering the growth of and investment in clean, modern and reliable energy sources and technologies,

(b) removing barriers to and promoting opportunities for clean and renewable energy sources and technologies,

(c) promoting conservation, demand management and energy efficiency, and

(d) investing in energy infrastructure to ensure a clean, modern and reliable system; (“initiative pour l’énergie propre”)

“electricity vendor” means,

(a) a licensed distributor,

(b) a licensed retailer,

(c) the IESO in circumstances where it directly invoices a specified consumer for electricity used in Ontario, or

(d) such other person as may be prescribed; (“vendeur d’électricité”)

“fair allocation amount” means an amount calculated under section 20; (“montant de répartition équitable”)

“finance amount” means the finance amount determined in accordance with the regulations; (“montant de financement”)

“Financial Services Manager” means the Financial Services Manager appointed under section 18; (“gestionnaire des services financiers”)

“financing entity” means an entity established or caused to be established by the Financial Services Manager as described in subsection 22 (2); (“entité de financement”)

“Financing Plan” means the plan prepared under section 21; (“Plan de financement”)

“funding obligation” means a payment obligation incurred by or on behalf of an investment interest owner to fund its ownership of an investment interest or a payment obligation that meets such other criteria as may be prescribed; (“obligation de financement”)

“funding rebate” means a payment obligation incurred by the IESO as part of the transfer of the regulatory asset;  (“remboursement de financement”)

“IESO” means the Independent Electricity System Operator continued under Part II of the Electricity Act, 1998; (“SIERE”)

“IESO deferral” means the amount determined under section 23; (“report de la SIERE”)

“investment asset” means the rights and interests described in section 29; (“actif d’investissement”)

“investment interest” means,

(a) an ownership interest in the investment asset, and

(b) in circumstances where the ownership interest is transferred, the rights and benefits specified in the agreement under which the interest is transferred; (“participation d’investissement”)

“investment interest owner” means a financing entity that has acquired and holds an investment interest; (“détenteur d’une participation d’investissement”)

“licensed distributor” means a person licensed under Part V of the Ontario Energy Board Act, 1998 to own or operate a distribution system within the meaning of that Act; (“distributeur titulaire d’un permis”)

“licensed retailer” means a person who is licensed under Part V of the Ontario Energy Board Act, 1998 to retail electricity; (“détaillant titulaire d’un permis”)

“Minister” means the Minister of Energy or such other member of the Executive Council as may be assigned the administration of this Act under the Executive Council Act; (“ministre”)

“Ontario Power Generation Inc.” means the corporation incorporated as Ontario Power Generation Inc. under the Business Corporations Act on December 1, 1998; (“Ontario Power Generation Inc.”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“reference period” means,

(a) the period beginning on July 1, 2017 and ending on October 31, 2017, and

(b) during the period beginning on November 1, 2017 and ending on either April 30, 2047 or such later day as may be prescribed,

(i) every six-month period following the period mentioned in clause (a), or

(ii) any period shorter than six months, as may be prescribed; (“période de référence”)

“refinancing” means, subject to the regulations, the incurrence of debt in connection with a redemption, repayment or repurchase of a funding obligation; (“refinancement”)

“regulation” means a regulation made under this Act; (“règlement”)

“regulatory asset” means the right established under section 25; (“actif réglementaire”)

“specified consumer” means,

(a) a person who has an account with an electricity vendor for the supply of electricity in Ontario and meets the criteria set out in subsection (2), or

(b) such other person as may be prescribed; (“consommateur déterminé”)

“transfer” includes, when used in relation to an investment interest, the assignment, conveyance, disposition or sale of the investment interest; (“transfert”)

“true up amount” means a true up amount determined in accordance with the regulations; (“montant d’égalisation”)

“unit sub-metering” has the same meaning as in the Energy Consumer Protection Act, 2010; (“activités liées aux compteurs divisionnaires d’unité”)

“unit sub-meter provider” has the same meaning as in the Energy Consumer Protection Act, 2010; (“fournisseur de compteurs divisionnaires d’unité”) 

“variance account” means the variance account established by the IESO under subsection 24 (1). (“compte d’écart”)

Specified consumer

(2) For the purposes of clause (a) of the definition of “specified consumer” in subsection (1), the person must meet any one of the following criteria:

1. The person has a demand for electricity of not more than 50 kilowatts, or such other amount as may be prescribed.

2. The person annually uses not more than 250,000 kilowatt hours of electricity, or such other amount as may be prescribed.

3. The person carries on a business that is a farming business for the purposes of the Farm Registration and Farm Organizations Funding Act, 1993 and either holds a valid registration number assigned under that Act or has had the obligation to file a farming business registration form waived pursuant to an order made under subsection 22 (6) of that Act.

4. The person’s account with the electricity vendor relates to,

i. a dwelling,

ii. a property within the meaning of the Condominium Act, 1998,

iii. a residential complex within the meaning of subsection 2 (1) of the Residential Tenancies Act, 2006, without regard to section 5 of that Act, or

iv. a property that includes one or more housing units and that is owned or leased by a co-operative within the meaning of the Co-operative Corporations Act.

5. The person satisfies such criteria as may be prescribed.

Transfer of regulatory asset

(3) In this Act, a reference to the transfer of a specified portion of the regulatory asset is a reference to the following, as provided for in subsection 26 (3):

1. A reduction in the balance in the variance account.

2. The adjustment of the regulatory asset.

3. The acquisition by a financing entity of the investment interest corresponding to the specified portion of the regulatory asset.

Note: On November 1, 2019, section 1 of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 2)

Interpretation

1 (1) In this Act,

“capital account” means an account established by or on behalf of the Fair Hydro Trust under the governing documents for an existing funding obligation for the purpose of accumulating funds to be used to make repayments in respect of the existing funding obligation; (“compte capital”)

“existing funding obligation” means a funding obligation that existed on the final plan date; (“obligation de financement existante”)

“fair allocation amount” means, when used in respect of a reference period, the amount calculated by the Minister in respect of the reference period under section 20 of this Act as it read immediately before the final plan date and provided by the Minister to the Financial Services Manager before the final plan date; (“montant de répartition équitable”)

“Fair Hydro Trust” means the trust established by the Financial Services Manager under subsection 22 (2) of this Act as it read immediately before the final plan date and includes the trustee of the trust when acting as trustee; (“Fair Hydro Trust”)

“FHT acceleration” means, when used in respect of an existing funding obligation, the event arising under the governing documents in which a portion of the principal owing in respect of the existing funding obligation becomes due and payable by the Fair Hydro Trust before the scheduled payment date, maturity date or redemption date; (“déchéance du terme contre Fair Hydro Trust”)

“FHT expenses” means all fees, expenses, costs, expenditures and liabilities incurred by or on behalf of the Fair Hydro Trust, including costs and expenditures payable by or on behalf of the Fair Hydro Trust in respect of a matter set out in subsection (2), including any taxes payable on those amounts, and excluding amounts mentioned in subsection (3); (“dépenses de Fair Hydro Trust”)

“final plan date” means November 1, 2019; (“date du plan définitif”)

“finance reserve account” means an account established by or on behalf of the Fair Hydro Trust under the governing documents for an existing funding obligation for the purposes of pre-funding, collateralizing, over-collateralizing or establishing reserves for the payment of existing funding obligations, FHT expenses or for related contingencies; (“compte de réserve financière”)

“Financial Services Manager” means Ontario Power Generation Inc.; (“gestionnaire des services financiers”)

“funding cost” means interest, commitment fees or other similar costs payable by or on behalf of the Fair Hydro Trust in respect of existing funding obligations; (“coût de financement”)

“funding obligation” means a payment obligation incurred by or on behalf of the Fair Hydro Trust,

(a) to fund its ownership of the investment asset, including principal, interest, fees and other amounts owing in respect thereof, or

(b) in respect of an amount raised for the purposes of the Fair Hydro Trust acquiring and financing the investment asset that was or would have been recoverable as a finance amount under this Act as it read immediately before the final plan date; (“obligation de financement”)

“General Regulation” means Ontario Regulation 206/17 (General) made under this Act; (“règlement général”)

“governing documents” means, when used in respect of a funding obligation, the documents governing the terms of the funding obligation or other matters relating to the funding obligation; (“documents directeurs”)

“IESO” means the Independent Electricity System Operator continued under Part II of the Electricity Act, 1998; (“SIERE”)

“investment asset” means the investment asset created under this Act before the final plan date, comprised of,

(a) before the final plan date, the rights and interests described in subsection 29 (1) of this Act as it read immediately before the final plan date, and

(b) on and after the final plan date, the rights and interests as described in subsection 17 (1) of this Act; (“actif d’investissement”)

“maturity date” means, in respect of an existing funding obligation, the date set out in the governing documents for the existing funding obligation on which all outstanding principal, interest and other amounts outstanding are due and payable; (“date d’échéance”)

“Minister” means the Minister of Energy, Northern Development and Mines or such other member of the executive council as may be assigned the administration of this Act under the Executive Council Act; (“ministre”)

“Ontario Power Generation Inc.” means the corporation incorporated as Ontario Power Generation Inc. under the Business Corporations Act on December 1, 1998; (“Ontario Power Generation Inc.”)

“payment date” means,

(a) a date on which the Fair Hydro Trust is obligated under the governing documents for an existing funding obligation, including in accordance with the requirements and priorities set out in the governing documents, to pay an amount that is due and payable in respect of an existing funding obligation, an FHT expense or a tax, or

(b) if a different date has been prescribed by a regulation made under subsection 6 (3), the prescribed date; (“date de paiement”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“Protection Agreement” means the agreement entered into by Her Majesty the Queen in Right of Ontario, as represented by the Minister of Energy and the Minister of Finance, and Computershare Trust Company of Canada as Trustee of Fair Hydro Trust, and Ontario Power Generation Inc. as Financial Services Manager and Manager of Fair Hydro Trust,  and BNY Trust Company of Canada as Indenture Trustee, entitled “Change of Law Protection Agreement”, dated as of December 21, 2017; (“accord de protection”)

“recovery amount” means the aggregate of all amounts received by or on behalf of the Fair Hydro Trust in respect of funding obligations; (“montant de recouvrement”)

“redemption amount” means the amount payable by or on behalf of the Fair Hydro Trust to redeem, prepay or repurchase an existing funding obligation, including any premium, make-whole or other amount payable to give effect to the prepayment, redemption or repurchase; (“montant de rachat”)

“reference period” means,

(a) the period beginning on July 1, 2017 and ending on October 31, 2017, and

(b) during the period beginning on November 1, 2017 and ending on April 30, 2047, every six-month period following the period mentioned in clause (a); (“période de référence”)

“regulation” means a regulation made under this Act; (“règlement”)

“repayment” means the payment by or on behalf of the Fair Hydro Trust or the provision by or on behalf of the Fair Hydro Trust for the payment of all or a portion of the principal amount advanced to the Fair Hydro Trust under an existing funding obligation; (“remboursement”)

“tax” means a tax, duty, fee, premium, excise, assessment, impost, levy or other charge payable by the Fair Hydro Trust to Her Majesty in right of Ontario, Her Majesty in right of Canada or the government of any other country, province, state, municipality or other political territory and imposed or authorized to be imposed by any law of Ontario, Canada, or any other country, province, state, municipality or other political territory and includes,

(a) a tax, duty, fee, premium, excise, assessment, impost, levy or other charge,

(i) levied on, measured by or described with respect to income, earnings, gross receipts, profits, capital, capital gains, sales or use, or

(ii) referred to as branch tax, net worth tax, alternative tax, minimum tax, goods and services tax, harmonized sales tax, value-added tax, excise tax, ad valorem tax, franchise tax, transfer tax, withholding tax, property tax, surtax, payroll tax, employment tax or employer health tax,

(b) government pension plan premiums or contributions, social security premiums, workers’ compensation premiums and employment or unemployment insurance or compensation premiums and contributions,

(c) an amount or charge under Part VI of the Electricity Act, 1998,

(d) an instalment in respect of an amount mentioned in clauses (a) to (c), and

(e) interest, penalties, fines, additions to tax or other amounts imposed on or in respect of an amount mentioned in clauses (a) to (c); (“impôt”)

“tax refund” means all amounts received by or on behalf of the Fair Hydro Trust as a refund of tax and to which the Fair Hydro Trust is entitled as a result of any activity, undertaking, transaction or event authorized or permitted under this Act. (“remboursement d’impôt”) 2019, c. 6, Sched. 3, s. 2.

FHT expenses

(2) For the purposes of the definition of “FHT expenses” in subsection (1), the matters include the following:

1. Maintaining the Fair Hydro Trust in good standing.

2. Administering, managing and operating the Fair Hydro Trust, including to enable compliance with its obligations under the governing documents for each existing funding obligation and the other contracts and instruments to which the Fair Hydro Trust is or becomes a party.

3. Fulfilling and complying with the Fair Hydro Trust’s obligations and undertakings under this Act and the governing documents for each existing funding obligation and the other contracts and instruments to which the Fair Hydro Trust is or becomes a party, including all charges, costs, indemnities, reimbursements and other amounts, together with any taxes on such charges, costs, indemnities, reimbursements and other amounts, incurred or committed to by or on behalf of the Fair Hydro Trust as a result of,

i. an activity authorized or permitted under the governing documents for each existing funding obligation and the other contracts and instruments to which the Fair Hydro Trust is or becomes a party,

ii. an agreement, undertaking or commitment made by or on behalf of the Fair Hydro Trust under this Act as it read immediately before the final plan date or under the General Regulation as it read immediately before the final plan date, or

iii. an activity authorized or permitted under this Act or the governing documents for each existing funding obligation and the other contracts and instruments to which the Fair Hydro Trust is or becomes a party on or after the final plan date.

4. Paying the underwriters, selling agents, valuation experts or other capital markets professionals in respect of existing funding obligations.

5. Paying the banking fees, including but not limited to structuring fees or work fees in respect of existing funding obligations.

6. Paying the fees of issuing and paying agents in respect of existing funding obligations.

7. Paying the fees of trustees.

8. Paying the fees incurred in the preparation of financial statements, financial reports, compliance certificates and tax returns.

9. Paying the fees of legal counsel.

10. Paying the rating agency fees.

11. Paying the filing or registration fees.

12. Paying the direct costs of the Financial Services Manager for employees whose work for the Financial Services Manager consists of the provision of services to the Fair Hydro Trust.

13. Paying the costs and expenditures incurred on behalf of the Fair Hydro Trust in connection with the Financial Services Manager’s duties under this Act.

14. Paying the costs and expenditures incurred in relation to any management agreement between the Financial Services Manager and the Fair Hydro Trust where the agreement provides for the reimbursement of the costs and expenditures. 2019, c. 6, Sched. 3, s. 2.

Same, exclusions

(3) For the purposes of the definition of “FHT expenses” in subsection (1), FHT expenses do not include amounts arising under existing funding obligations or any taxes other than those taxes mentioned in the definition of “FHT expenses” in subsection (1). 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

References to terms in contract, instrument

1.1 (1) Subject to subsection (2), if a contract or other instrument to which the Fair Hydro Trust is a party includes a reference to a term that was defined in this Act as it read immediately before the final plan date or in the General Regulation as it read immediately before the final plan date, the definition as it read immediately before the final plan date continues to apply for the purposes of interpreting the contract or other instrument. 2019, c. 6, Sched. 3, s. 2.

Exceptions

(2) In any contract or other instrument entered into before the final plan date in respect of an existing funding obligation,

(a) a reference to an investment interest is deemed to be a reference to the investment asset;

(b) a reference to an investment interest owner is deemed to be a reference to the investment asset owner; and

(c) a reference to a term specified in the regulations is deemed to be a reference to such other term as may be prescribed. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Waiver of subrogation rights under Protection Agreement

1.2 To the extent that any amount is deposited by the Crown in the account established for the beneficiaries under the Protection Agreement, the Crown shall be deemed to waive any attendant rights of subrogation and repayment arising under the Protection Agreement and under the governing documents for the existing funding obligations, in each case in respect of the obligations that are satisfied by applying the amount in accordance with the governing documents. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Protection against liability of specified consumers

1.3 (1) Nothing in this Act or in any contract or instrument shall be interpreted so as to create, continue or impose liability on any specified consumer in favour of any person for or in respect of any amount determined to be, or to form part of, a clean energy adjustment under this Act as it read immediately before the final plan date, including for or in respect of paying such an amount. 2019, c. 6, Sched. 3, s. 2.

Extinguishment of obligation to pay, etc.

(2) For greater certainty, any obligation of specified consumers to pay or repay any amounts that form all or any part of a clean energy adjustment referred to in subsection (1) is extinguished, whether such obligation arose or existed before or after the final plan date, and such obligation is superseded and replaced by the payment obligations of the Crown under section 6 and the payment obligations of Ontario Power Generation under section 8. 2019, c. 6, Sched. 3, s. 2.

Specified consumer

(3) For the purposes of subsections (1) and (2), the term “specified consumer” has the meaning assigned to it in this Act as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Protection against liability of electricity vendors and unit sub-meter providers

1.4 (1) Nothing in this Act or in any contract or instrument shall be interpreted so as to create, continue or impose liability on any electricity vendor or any unit sub-meter provider in favour of any person for or in respect of any amount determined to be, or to form part of, a clean energy adjustment under this Act as it read immediately before the final plan date, including for or in respect of,

(a) collecting, receiving, holding, applying, depositing or remitting such an amount;

(b) reporting on such an amount; or

(c) enforcing any collections or remittances of such an amount. 2019, c. 6, Sched. 3, s. 2.

Electricity vendor, unit sub-meter provider

(2) For the purposes of subsection (1), the terms “electricity vendor” and “unit sub-meter provider” have the meanings assigned to them in this Act as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Protection against liability of IESO

1.5 (1) Nothing in this Act or in any contract or instrument shall be interpreted so as to create, continue or impose liability on the IESO in favour of any person for or in respect of any amount determined to be, or to form part of, a clean energy adjustment under this Act as it read immediately before the final plan date, including for or in respect of,

(a) collecting, receiving, holding, applying, depositing or remitting such an amount;

(b) reporting on such an amount; or

(c) servicing, administering or enforcing any collections or remittances of such an amount. 2019, c. 6, Sched. 3, s. 2.

IESO not required to comply

(2) The IESO is not required to comply with any requirement under any contract or instrument that provides for the administration or servicing of the investment asset on behalf of the Fair Hydro Trust, including any requirement to,

(a) collect, receive, hold, apply, deposit or remit a clean energy adjustment under this Act as it read immediately before the final plan date;

(b) report on or provide notice on a clean energy adjustment under this Act as it read immediately before the final plan date;

(c) service, administer or enforce,

(i) a clean energy adjustment under this Act as it read immediately before the final plan date, or

(ii) any collections or remittances of a clean energy adjustment under this Act as it read immediately before the final plan date; or

(d) develop and implement an implementation plan in respect of obligations that would arise in the future under this Act as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 2.

Validity of transfer, investment asset

(3) This section does not affect the validity of any transfer of the investment asset to the Fair Hydro Trust or the application of each of the following in accordance with the terms of each of the following, in relation to such a transfer:

1. Any representation or certification made by the IESO to the Fair Hydro Trust or to or in favour of any beneficiary or any secured party.

2. Any warranty, acknowledgment or indemnity given by the IESO to the Fair Hydro Trust or to or in favour of any beneficiary or any secured party.

3. Any restrictive covenant agreed to by the IESO to the Fair Hydro Trust or to or in favour of any beneficiary or any secured party. 2019, c. 6, Sched. 3, s. 2.

Carrying costs

(4) Nothing in this Act or in any contract or instrument shall be interpreted so as to create, continue or impose liability on the IESO to pay the Fair Hydro Trust the carrying costs determined under section 9.1 of the General Regulation as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Enforcement remedies of secured parties unaffected

1.6 Nothing in this Act shall be read as limiting the rights and remedies of any secured party or its trustees or representatives to enforce its rights and interests as a secured party under any governing document for any existing funding obligation at any time after its security interest has become enforceable in accordance with the governing document. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Computation of amounts under funding obligations, etc.

1.7 Nothing in this Act shall be read as changing any of the following as set out in the governing documents for an existing funding obligation:

1. The method of computing the amount of principal of or interest on an existing funding obligation.

2. The date of payment of an amount of principal of or interest on an existing funding obligation.

3. The rights, entitlements or obligations of the payees under an existing funding obligation. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Protection against liability of Ontario Power Generation Inc. or Crown as principal

1.8 Without limiting the obligations of the Crown under section 6 and of Ontario Power Generation Inc. under section 8, nothing in this Act shall impose upon Ontario Power Generation Inc. or the Crown any obligation as a principal to pay any existing funding obligation, FHT expense or tax owing and payable by the Fair Hydro Trust. 2019, c. 6, Sched. 3, s. 2.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 2 - 01/11/2019

Effect of invalidity

2 (1) For greater certainty, all of the provisions of this Act remain in full force and effect, even if one or more provisions are held to be invalid, the intention of the Legislature being to give separate and independent effect to the extent of its powers to every provision contained in this Act.

Same, funding obligation

(2) The fact that any provision of this Act is held to be invalid or ceases to be in effect for any reason does not affect the validity or enforceability of a funding obligation incurred before the day that the provision is held to be invalid or ceases to be in effect, or any rights or obligations associated with the funding obligation.

Purposes

3 The purposes of this Act are,

(a) to ensure that clean energy costs and clean energy benefits are fairly allocated among present and future specified consumers;

(b) to recognize that clean energy benefits have accrued and will accrue over time and will continue to benefit present and future electricity consumers in the Province; and

(c) to align clean energy costs with clean energy benefits, in order to provide fairness for specified consumers over time.

Note: On November 1, 2019, section 3 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 3)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 3 - 01/11/2019

Crown bound

4 This Act binds the Crown.

Protection and assurances

Prohibition

5 (1) No action or omission by the Board, the Minister or the Crown shall be effective to reduce, impair, postpone or terminate the obligations of specified consumers to pay amounts in respect of the clean energy adjustment or to impair or postpone the invoicing, collection or remittance of the clean energy adjustment.

Agreements

(2) The Minister and the Minister of Finance may together, with the approval of the Lieutenant Governor in Council, enter into agreements on behalf of the Province of Ontario with any person in respect of this Act, including agreements regarding the performance of the IESO or electricity vendors under this Act or related transactions.

Guarantee, indemnification

(3) The Lieutenant Governor in Council may by order,

(a) authorize the Minister and the Minister of Finance, acting together on behalf of the Province,

(i) to agree to guarantee or indemnify any debts, obligations, securities or undertakings associated with an investment interest, and

(ii) to determine terms and conditions of the guarantee or indemnity and the maximum liability for the guarantee or indemnity;

(b) specify terms and conditions that must be included in any guarantee or indemnity given by the Minister and the Minister of Finance; and

(c) specify a maximum liability for the guarantee or indemnity.

Note: On November 1, 2019, section 5 of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 4)

Protection

5 (1) No action or omission by the Minister, the Minister of Finance or the Crown shall be effective to reduce, impair, postpone or terminate the obligation of the Crown to pay amounts in respect of payments under the Protection Agreement or amounts under section 6 or the obligation of Ontario Power Generation Inc. to pay amounts under section 8. 2019, c. 6, Sched. 3, s. 4.

Agreements

(2) Subject to subsection (1), the Minister and the Minister of Finance may together, with the approval of the Lieutenant Governor in Council, enter into any agreements on behalf of the Province of Ontario with any person in respect of this Act. 2019, c. 6, Sched. 3, s. 4.

Guarantee, indemnification re previous agreements

(3) Subject to subsection (1), the Lieutenant Governor in Council may by order,

(a) authorize the Minister and the Minister of Finance, acting together on behalf of the Province of Ontario, to agree to guarantee or indemnify any debts, obligations, securities or undertakings associated with the investment asset and to determine terms and conditions and the maximum liability for the guarantee or indemnity;

(b) specify terms and conditions that must be included in any guarantee or indemnity given by the Minister and the Minister of Finance; and

(c) specify a maximum liability for the guarantee or indemnity. 2019, c. 6, Sched. 3, s. 4.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 4 - 01/11/2019

Part II
Fair adjustment

Definition

6 In this Part,

“regulated rate consumer” means a specified consumer who meets the following criteria:

1. The consumer is a member of the class of consumers prescribed by the regulations made under the Ontario Energy Board Act, 1998 for the purposes of subsection 79.16 (1) of that Act.

2. The consumer would, if the consumer were not subject to this Act, be invoiced the rates determined by the Board under clause 79.16 (1) (b) of the Ontario Energy Board Act, 1998.

Regulated rate consumers, first adjustments

7 (1) Despite clause 79.16 (1) (b) of the Ontario Energy Board Act, 1998, the electricity rates payable by regulated rate consumers for the period beginning on July 1, 2017 and ending on April 30, 2018 are the rates determined by the Board under this section and in accordance with the regulations.

Determination by Board

(2) The rates mentioned in subsection (1) shall be the rates that would result in a hypothetical regulated rate consumer who meets the prescribed criteria being invoiced a total invoice amount, consisting of such types of amounts as may be prescribed, that is 25 per cent less than a different total invoice amount, consisting of such types of amounts as may be prescribed, that the consumer would have been invoiced under the comparison rates described in subsection (3).

Comparison rates

(3) The comparison rates are the rates that would have been effective May 1, 2017 if they had been determined by the Board for the consumer mentioned in subsection (2) using the method prescribed by the regulations made under clause 79.16 (1) (b) of the Ontario Energy Board Act, 1998, without taking into account any forecasted impact of any other provisions of this Act.

Other specified consumers, first adjustments

8 (1) For the period beginning on July 1, 2017 and ending on April 30, 2018, the adjustments made under section 25.33 of the Electricity Act, 1998 shall, with respect to specified consumers who are not regulated rate consumers, be further adjusted by electricity vendors in accordance with the regulations and in accordance with the determinations made by the Board in accordance with the regulations.

Regulations

(2) The regulations may specify different adjustments, or methods of determining the adjustments, to be made in respect of prescribed classes of specified consumers who are not regulated rate consumers.

Determinations by Board

9 The Board shall make the determinations mentioned in sections 7 and 8 no later than 15 business days after the day this section receives Royal Assent and, regardless of whether the Board makes the determinations before or after July 1, 2017, the determinations shall be effective as of July 1, 2017.

Implementation by electricity vendors

10 (1) As soon as possible after the Board makes determinations under section 9, each electricity vendor shall, in respect of electricity used on or after July 1, 2017, ensure that its invoices reflect the determinations of the Board.

Same

(2) The electricity vendor shall ensure that, if any of its customers who are specified consumers have been invoiced in a manner that does not reflect the determinations of the Board under section 9, the specified consumer receives the difference between the amounts shown on the invoice and the amounts reflecting the Board’s determinations, provided as a lump sum credit on the first invoice issued after the electricity vendor has adapted its invoices or by such other means as may be prescribed.

Subsequent adjustments

11 (1) Despite clause 79.16 (1) (b) of the Ontario Energy Board Act, 1998 and subject to subsection (2), the Lieutenant Governor in Council may prescribe methodologies to be applied by the Board after April 30, 2018 for the purpose of determining,

(a) electricity rates for regulated rate consumers; or

(b) further adjustments to be applied by electricity vendors, in accordance with the regulations and in accordance with the Board’s determinations, to the adjustments made under section 25.33 of the Electricity Act, 1998 in respect of specified consumers who are not regulated rate consumers.

Regulations

(2) The Lieutenant Governor in Council shall have regard to the following in making the regulations: 

1. The purposes of this Act.

2. The clean energy costs borne by specified consumers over time.

3. Such other matters as may be prescribed.

Same

(3) The regulations may prescribe,

(a) different methodologies for different prescribed classes of specified consumers and in respect of different periods of time; and

(b) different adjustments to be applied in respect of prescribed classes of specified consumers who are not regulated rate consumers and in respect of different periods of time.

Sub-metering

12 (1) This section applies if a specified consumer provides to another person electricity in respect of which a determination of the Board referred to in section 9 or 11 applies.

Same

(2) If an invoice for the electricity is issued to the person by the specified consumer or a unit sub-meter provider providing unit sub-metering for the specified consumer, the amounts or rates payable for the electricity by the person who is liable to pay the invoice shall be determined in accordance with the regulations.

Same

(3) The regulations may prescribe different amounts or rates or different methods for determining amounts or rates for different prescribed classes of specified consumers.

Note: On November 1, 2019, Part II of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 5)

Part II
Payments by the Crown and by ontario power generation inc.

Payments by Crown

6 (1) The Crown shall, in accordance with this section and the regulations, pay to the Fair Hydro Trust the amounts calculated in accordance with section 7. 2019, c. 6, Sched. 3, s. 5.

Timing of payments

(2) Subject to subsection (3), the payments by the Crown under subsection (1) shall be paid following the final plan date on each applicable payment date. 2019, c. 6, Sched. 3, s. 5.

Same, regulations

(3) In order to align the timing of payments to the Fair Hydro Trust by the Crown with the payment obligations of the Fair Hydro Trust with respect to existing funding obligations, FHT expenses or taxes, the Lieutenant Governor in Council may make regulations regarding the timing of payments or prescribing different dates on which the Crown is required to pay to the Fair Hydro Trust an amount calculated in accordance with section 7. 2019, c. 6, Sched. 3, s. 5.

Consolidated Revenue Fund

(4) The amounts referred to in subsection (1) are a charge on and are payable out of the Consolidated Revenue Fund. 2019, c. 6, Sched. 3, s. 5.

Indebtedness of Crown

(5) An unpaid amount that was required to be paid under this section constitutes indebtedness of the Crown to the Fair Hydro Trust. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Calculation of amounts payable by Crown

7 (1) The payment to be made on a payment date by the Crown under section 6 shall be the amount calculated by taking the following steps:

1. After eliminating any duplication in the following amounts, calculate the sum of the following:

i. Amounts that would be due and payable by the Fair Hydro Trust in respect of each existing funding obligation on the payment date, determined as the sum of the following, in each case assuming that no FHT acceleration has occurred in respect of any existing funding obligation at any time on or before the payment date:

A. Amounts due and payable in respect of repayments.

B. Amounts due and payable in respect of funding costs.

C. Amounts due and payable in respect of redemption amounts.

D. Amounts required under the governing documents for the existing funding obligation to be deposited into capital accounts or finance reserve accounts.

ii. Amounts due and payable in respect of FHT expenses on the payment date.

iii. Any taxes due and payable by the Fair Hydro Trust on the payment date.

2. If the payment date is the last payment date occurring during a reference period during or after which an FHT acceleration has occurred in respect of any existing funding obligation, calculate the following amounts:

i. After eliminating any duplication in the amounts, the sum of the amounts that would have been determined under paragraph 1 in respect of a payment date occurring during the reference period, had the amounts been calculated in subparagraph 1 i for the payment date having regard to whether or not an FHT acceleration in respect of an existing funding obligation had occurred as of the payment date.

ii. The lesser of the following:

A. The amount determined under subparagraph i.

B. The fair allocation amount for the reference period in which the payment date occurs.

3. Determine the amount, if any, by which the amount calculated under subparagraph 2 ii exceeds the amount determined under paragraph 1.

4. After eliminating any duplication in amounts from all other sources of money that are or will be available to the Fair Hydro Trust on the payment date in order to pay the amounts that are due and payable by the Fair Hydro Trust on the payment date, calculate the sum of those amounts, excluding any amounts that would, if applied by the Fair Hydro Trust, directly or indirectly cause a default under any existing funding obligations, and including the following amounts:

i. Amounts withdrawn or required to be withdrawn, as required under the governing documents for the existing funding obligations, from any collection account, capital account or finance reserve account.

ii. Recovery amounts received by the Fair Hydro Trust.

iii. Tax refunds received by the Fair Hydro Trust.

iv. Amounts paid by Ontario Power Generation Inc. to the Fair Hydro Trust under section 8.

v. Amounts deposited by the Crown into the account established for the beneficiaries under the Protection Agreement.

5. Calculate the sum of the amount calculated under paragraph 1 and any amount calculated under paragraph 3.

6. Subtract the sum of the amounts calculated under paragraph 4 from the amount calculated under paragraph 5.

7. Calculate the payment amount by adding any positive amount determined under paragraph 6 to any additional prescribed amounts that are determined in accordance with the regulations. 2019, c. 6, Sched. 3, s. 5.

Rules

(2) The following rules apply with respect to the determination of the amounts payable by the Crown to the Fair Hydro Trust under this section:

1. The determination shall be made by applying a cash basis accounting method.

2. The determination shall reflect cash amounts actually paid, deposited, received, applied, withdrawn or made available at a specified time. 2019, c. 6, Sched. 3, s. 5.

Financial Services Manager to notify Ministers

(3) The Financial Services Manager shall, in accordance with the regulations, notify the Minister and the Minister of Finance of each amount determined under this section and such other information as may be prescribed related to the determination of the amount. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Payments by Ontario Power Generation Inc.

8 (1) Subject to subsection (3), Ontario Power Generation Inc. shall pay to the Fair Hydro Trust all amounts of or in respect of FHT expenses that become due and payable on or after January 1, 2019. 2019, c. 6, Sched. 3, s. 5.

Reimbursement to the Crown

(2) If an amount in respect of FHT expenses described under subsection (1) has been paid to the Fair Hydro Trust by the Crown under the Protection Agreement or under section 6, Ontario Power Generation Inc. shall promptly reimburse the Crown for the amount paid. 2019, c. 6, Sched. 3, s. 5.

Same

(3) Ontario Power Generation Inc. shall not be required to pay to the Fair Hydro Trust amounts in respect of FHT expenses that have been paid to the Fair Hydro Trust by the Crown as described in subsection (2). 2019, c. 6, Sched. 3, s. 5.

Timing of payments

(4) The amount payable to the Fair Hydro Trust by Ontario Power Generation Inc. in respect of an FHT expense shall be made not later than one day before the day that the FHT expense becomes due and payable. 2019, c. 6, Sched. 3, s. 5.

Rules

(5) The following rules apply with respect to the determination of the amounts payable to the Fair Hydro Trust by Ontario Power Generation Inc. under subsection (1):

1. The determination shall be made by applying a cash basis accounting method.

2. The determination shall reflect cash amounts actually paid, deposited, received, applied, withdrawn or made available at a specified time. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Application of amounts by the Fair Hydro Trust

9 (1) On each payment date, the Fair Hydro Trust shall, subject to and in compliance with the terms of the governing documents for the existing funding obligations and the terms of each of its other applicable payment obligations, carry out the following steps in the order in which they appear:

1. Apply all sources of money that are or will be available to the Fair Hydro Trust on the payment date, including sources included in the calculation in paragraph 4 of subsection 7 (1), excluding any amounts that would, if applied by the Fair Hydro Trust, directly or indirectly cause a default under any existing funding obligations and excluding amounts paid to it by the Crown under section 6 on the payment date, to pay the amounts that are due and payable by the Fair Hydro Trust on the payment date in respect of existing funding obligations, FHT expenses or any tax.

2. Deposit the amounts paid to it by the Crown under section 6 on the payment date into the applicable collection account contemplated under the governing documents for existing funding obligations and apply the deposited amounts to pay the amounts specified in the governing documents to be due and payable by the Fair Hydro Trust on the payment date in respect of any existing funding obligations, FHT expenses or any tax.

3. If, after applying the amounts under paragraphs 1 and 2, it is determined by the Financial Services Manager that all or a portion of the amount paid on the payment date to the Fair Hydro Trust by the Crown under section 6 was not required by the Fair Hydro Trust on the payment date to pay the amounts due and payable in respect of existing funding obligations, FHT expenses or any tax on the payment date, pay the amount in excess to the Crown. 2019, c. 6, Sched. 3, s. 5.

Same, receipts in respect of clean energy adjustments

(2) The Fair Hydro Trust shall apply the following amounts under the terms of the governing documents for the existing funding obligations, in each case on a payment date, on the same basis as if such amounts were received by the IESO and remitted to the Fair Hydro Trust as receipts in respect of clean energy adjustments in accordance with the agreements and instruments under which the investment asset was transferred to the Fair Hydro Trust:

1. The amounts paid to it by the Crown under section 6.

2. The amounts paid to it by Ontario Power Generation Inc. under section 8. 2019, c. 6, Sched. 3, s. 5.

Payment instructions

(3) The Financial Services Manager shall modify, adjust and supplement the reports, notices, payment instructions and certificates contemplated to be delivered in connection with payments to be made by the Fair Hydro Trust in accordance with the governing documents for the existing funding obligations in order to reflect the payments, deposits and applications contemplated under this section. 2019, c. 6, Sched. 3, s. 5.

Deemed compliance with delivery requirements

(4) The delivery of modified, adjusted or supplemented reports, notices, payment instructions and certificates mentioned in subsection (3) shall be deemed to be in compliance with the corresponding delivery requirements arising under the governing documents for the existing funding obligations. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Contract references, finance amount

10 (1) This section applies to any contract to which the Fair Hydro Trust is a party for the purposes of determining the finance amount or the estimated finance amount as those amounts were defined or determined under this Act as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 5.

Minimum amount

(2) If a contract mentioned in subsection (1) includes a reference to the estimated finance amount to be determined in respect of a reference period under subsection 15 (1) of this Act as it read immediately before the final plan date and section 6.1 of the General Regulation as it read immediately before the final plan date, that amount shall be adjusted, if necessary, so that it is at a minimum the amount calculated as follows:

1. Calculate the sum of all amounts in respect of the reference period, each of which is an amount determined under paragraph 1 of subsection 7 (1) in respect of a payment date occurring during the reference period.

2. After eliminating any duplication, calculate the sum of the sources of money described in subparagraphs 4 i to iii of subsection 7 (1) that were applied by the Fair Hydro Trust to pay amounts that were due and payable by the Fair Hydro Trust on the payment dates occurring during the reference period.

3. Calculate the amount determined under paragraph 3 of subsection 7 (1) for the last payment date occurring during the reference period.

4. Calculate any positive amount that results from subtracting the sum calculated under paragraph 2 from the sum of the following amounts:

i. The amount calculated under paragraph 1.

ii. The amount calculated under paragraph 3.

iii. Any additional prescribed amounts that are determined in accordance with the regulations. 2019, c. 6, Sched. 3, s. 5.

Payment obligation

(3) Any reference in a contract mentioned in subsection (1) to a payment obligation of the Fair Hydro Trust that would yield, for a period of time, a finance amount or an estimated finance amount as such amount would have been determined under the General Regulation as it read immediately before the final plan date shall be read as including any obligation to pay an existing funding obligation, any FHT expense and any tax, in each case that becomes due and payable during the period of time. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Part Iii
Clean Energy Adjustment

Specified consumers to pay

13 (1) Upon receipt of an invoice from an electricity vendor that includes an amount in respect of the clean energy adjustment, a specified consumer shall pay the amount to the electricity vendor as agent of the investment interest owners.

Same

(2) For greater certainty, subsection (1) applies regardless of whether any estimate, projection or other input used in calculating the clean energy adjustment was erroneous or out of date at the time of the calculation and regardless of whether any of those estimates, projections or other inputs is subsequently amended, updated or corrected.

Terms

(3) The payment shall be made in accordance with such terms of payment as may be specified in the invoice, which may include terms relating to late payment fees and interest charges.

Indebtedness of specified consumer

(4) An unpaid amount that is required to be paid by a specified consumer under this section constitutes indebtedness of the specified consumer to each investment interest owner to the extent of each owner’s respective interest in the investment asset.

Same

(5) The indebtedness mentioned in subsection (4) is a single and separate debt obligation owed by the specified consumer and may be enforced independently from any other payment obligation or indebtedness owing by the specified consumer.

Unit sub-metering

(6) A specified consumer who provides electricity through unit sub-metering may collect amounts in respect of the clean energy adjustment payable under this section in accordance with the regulations.

Irrevocability of amount

14 (1) An amount in respect of the clean energy adjustment shown on an invoice issued to a specified consumer under this Act is determinative of the amount of the consumer’s indebtedness resulting from the clean energy adjustment and is irrevocable upon invoicing the consumer and may not be set off or bypassed.

Exception

(2) Subsection (1) does not apply to the extent that the invoice reflects a clerical, typographical or calculation-related error.

Determination of clean energy adjustment

Financial Services Manager to determine

15 (1) The Financial Services Manager shall determine the clean energy adjustment payable by all specified consumers in respect of each month in a reference period by taking the following steps:

1. Calculate the sum of the following:

i. The estimated finance amount in respect of the reference period.

ii. The true up amount in respect of the reference period.

2. Divide the sum calculated under paragraph 1 by the number of months in the reference period.

Regulations re true up amount

(2) The Lieutenant Governor in Council shall, in making regulations with respect to the determination of the true up amount, have regard to the following principles:

1. The true up amount should serve to ensure that the collection of the clean energy adjustment is sufficient to pay the finance amount when it is due.

2. The method for determining the true up amount should take into account historical and reasonably foreseeable,

i. differences between the estimated and actual finance amount for the applicable reference period,

ii. differences between amounts invoiced and amounts collected due to various factors, including applicable taxes, consumer defaults and delays, billing lags and write-offs, and

iii. variations in billings due to variations in electricity consumption.

Financial Services Manager to notify Board

(3) The Financial Services Manager shall, in accordance with the regulations, notify the Board of the clean energy adjustment in respect of a reference period and such other information related to the determination of the clean energy adjustment as may be prescribed.

Board to determine rates

(4) Without changing the clean energy adjustment, the Board shall, in accordance with the regulations, determine the rates at which specified consumers are invoiced to recover the clean energy adjustment in respect of the reference period.

IESO to receive amounts

16 (1) The IESO shall, as agent of the investment interest owners, receive amounts in respect of the clean energy adjustment paid to it from electricity vendors in accordance with the market rules made under section 32 of the Electricity Act, 1998 or the regulations.

Account

(2) All of the following amounts received by the IESO shall, until remitted to or for the benefit of the investment interest owners in accordance with subsection (4), be deposited promptly into an account established for the purposes of receiving those amounts:

1. Amounts described in subsection (1).

2. Payments made by specified consumers directly to the IESO as electricity vendor under subsection 13 (1).

3. Proceeds of amounts described in paragraphs 1 and 2.

Same, held in trust

(3) All amounts received by the IESO in respect of the clean energy adjustment shall, until remitted to or for the benefit of the investment interest owners, be held in trust by the IESO for the investment interest owners.

IESO to remit

(4) The IESO shall remit amounts received by it in respect of the clean energy adjustment, inclusive of interest earned on the amounts referred to in subsection (1), to or for the benefit of the investment interest owners in accordance with the regulations.

Electricity vendor to invoice specified consumers

17 (1) Each electricity vendor shall issue an invoice to each of its customers who is a specified consumer for the amount payable by the consumer in respect of the clean energy adjustment, as determined by applying the rate set by the Board under subsection 15 (4) and in accordance with the regulations.

Electricity vendor to report

(2) Each electricity vendor shall, in accordance with the regulations, promptly report to the IESO the total amount invoiced to its customers who are specified consumers in respect of the clean energy adjustment, the amount collected and such other information as may be prescribed.

Electricity vendor to collect

(3) Each electricity vendor shall, as agent of the investment interest owners, collect amounts in respect of the clean energy adjustment from specified consumers in accordance with the regulations.

Pro rating of payments

(4) If an electricity vendor receives a payment made by or on behalf of a specified consumer in respect of amounts payable under one or more invoices and the amount paid is less than the total amount payable, the electricity vendor shall allocate the payment on a pro rata basis to the clean energy adjustment and other amounts payable under the relevant invoices in respect of electricity charges in respect of the same invoice period.

Held in trust

(5) Payments received by an electricity vendor from or on behalf of specified consumers in respect of the clean energy adjustment and all proceeds of the payments shall, until remitted to the IESO for the benefit of the investment interest owners in accordance with subsection (6), be held by each electricity vendor in trust for the benefit of the investment interest owners.

Remittance to IESO

(6) Each electricity vendor shall remit amounts in respect of the clean energy adjustment to the IESO for the benefit of the investment interest owners in accordance with the regulations.

Note: On November 1, 2019, Part III of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 5)

Part III
Financial Services Manager

Ontario Power Generation Inc. to continue as Financial Services Manager

11 (1) Ontario Power Generation Inc. shall continue to act as the Financial Services Manager and shall fulfil its obligations in that capacity under this Act. 2019, c. 6, Sched. 3, s. 5.

No compensation

(2) Except as may be provided for in any contract to which Ontario Power Generation Inc. is a party as of the final plan date, the Financial Services Manager shall not be entitled to be compensated for acting as the Financial Services Manager under this Act. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Duties of Financial Services Manager

12 (1) The Financial Services Manager shall do the following until all existing funding obligations and any other obligations and liabilities of the Fair Hydro Trust have been satisfied or otherwise extinguished:

1. Perform the duties assigned to it under this Act.

2. Administer the investment asset on behalf of the Fair Hydro Trust.

3. Take all necessary steps within its power to,

i. maintain the Fair Hydro Trust’s legal existence,

ii. cause the Fair Hydro Trust to comply with all of its obligations and undertakings under the governing documents for the existing funding obligations, under all other contracts to which it is a party and under this Act, and

iii. otherwise maintain and observe reasonable and prudent practices in connection with the Fair Hydro Trust’s operations. 2019, c. 6, Sched. 3, s. 5.

Administration of the investment asset

(2) The administration of the investment asset may include providing information to the Minister or the Minister of Finance in respect of obligations under this Act and such other activities as may be prescribed. 2019, c. 6, Sched. 3, s. 5.

Limitation

(3) Despite subparagraph 3 iii of subsection (1), the Financial Services Manager is not responsible or liable for obligations or undertakings of the Fair Hydro Trust as a principal. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

No further funding obligations to be incurred

13 Neither the Financial Services Manager nor the Fair Hydro Trust shall provide for further funding obligations to be incurred by or on behalf of the Fair Hydro Trust on or after the final plan date. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

No further financing entities to be established

14 (1) The Fair Hydro Trust is the only financing entity established under this Act and, for greater certainty, no other financing entity shall be established under this Act. 2019, c. 6, Sched. 3, s. 5.

Financing entity

(2) For the purposes of this section, the term “financing entity” has the meaning assigned to it in this Act as it read immediately before the final plan date. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Amendment to Financing Plan

15 The Financial Services Manager shall, as soon as practicable on or after the final plan date, amend the Financing Plan that was prepared under this Act, having regard to the following principles:

1. The payment of existing funding obligations, FHT expenses and taxes payable by the Fair Hydro Trust should be made promptly as they become due and payable in accordance with their terms.

2. No further funding obligations may be incurred by or on behalf of the Fair Hydro Trust on or after the final plan date.

3. The Fair Hydro Trust should maintain its legal existence and remain in good standing until all existing funding obligations and any other obligations and liabilities of the Fair Hydro Trust have been satisfied or otherwise extinguished.

4. The Fair Hydro Trust should comply with all of its obligations and undertakings under the governing documents for the existing funding obligations, under all other contracts to which it is a party and under this Act and otherwise maintain and observe reasonable and prudent practices in connection with its operations.

5. The Financial Services Manager and the Manager of the Fair Hydro Trust should act as any reasonably prudent manager would act in similar circumstances and deal with related parties on arm’s length terms, and otherwise maintain and observe reasonable and prudent practices and standards in connection with the performance of its duties and obligations.

6. The Financial Services Manager and the Manager of the Fair Hydro Trust should together prepare and disseminate such disclosures and reports as are reasonably required in order to inform and update the creditors of the Fair Hydro Trust from time to time, including to reflect the enactment of Schedule 3 to the Fixing the Hydro Mess Act, 2019.

7. Such other principles as may be prescribed. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

PART iv
Implementation

Financial Services Manager

Appointment

18 Ontario Power Generation Inc. is appointed as the Financial Services Manager for the purposes of this Act, unless it is unable or unwilling to do so, in which case the Minister may appoint a different Financial Services Manager in accordance with the regulations.

Duties and powers

19 (1) The Financial Services Manager shall perform the duties assigned to it under this Act and may administer the investment asset on behalf of the investment interest owners.

Same

(2) The administration of the investment asset may include providing information to the IESO in respect of obligations under Part III and such other activities as may be prescribed.

Fees

(3) Subject to any prescribed limitations, the Financial Services Manager may establish and charge fees in relation to such matters as may be prescribed in accordance with the regulations, which regulations may provide for the ability to recover costs and expenditures and to earn a return.

Same, Board approval

(4) Before establishing fees under subsection (3), the Financial Services Manager shall submit them to the Board for approval in accordance with the regulations.

Note: On November 1, 2019, section 19 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Fair Allocation Amount

Minister to calculate fair allocation amount

20 (1) Before the first funding obligation is incurred, the Minister shall calculate a fair allocation amount in respect of each reference period as follows:

1. Determine, in accordance with the following steps and the regulations and by applying such method as the Minister considers appropriate, the estimated clean energy costs to be allocated to specified consumers in respect of the reference period:

i. Determine the clean energy costs incurred or expected to be incurred in respect of all reference periods.

ii. Determine the clean energy benefits in respect of,

A. all reference periods, and

B. the prescribed period of time that preceded the first reference period and during which clean energy costs were incurred.

iii. Attribute the value of the clean energy benefits determined under subparagraph ii across the reference periods and the period of time described in sub-subparagraph ii B.

iv. Allocate clean energy costs determined under subparagraph i in proportion to the relative attributions of clean energy benefits determined in subparagraph ii in respect of the reference periods.

2. Subject to subsection (2), determine, in accordance with the regulations and by applying such method as the Minister considers appropriate, the estimated financing costs, consisting of such types of costs as may be prescribed, in respect of the reference period.

3. Determine, in accordance with the regulations and by applying such method as the Minister considers appropriate, the estimated clean energy costs that would have been payable, in the absence of this Act, by specified consumers in respect of the reference period.

4. Determine the amount, if any, by which the sum of the determinations under paragraphs 1 and 2 exceeds the determination under paragraph 3.

5. Calculate the sum of the amount determined under paragraph 4 and such other amounts as may be prescribed in respect of the reference period.

Part II adjustments

(2) If the Board has made a determination under section 9 or 11 in respect of the reference period or in respect of a prior reference period and, as a result of the determination, the prescribed circumstances arise, the Minister shall take the prescribed steps to make the prescribed adjustments to the determination made under paragraph 2 of subsection (1).

Minister’s considerations

(3) In calculating a fair allocation amount, the Minister shall have regard to the purposes of this Act and such other matters as may be prescribed.

Minister to inform Financial Services Manager

(4) The Minister shall provide the fair allocation amount in respect of each reference period to the Financial Services Manager.

Recalculation

(5) The calculation of a fair allocation amount under this Part may be changed by such person as may be prescribed, subject to the following requirements:

1. The prescribed person shall comply with such requirements as may be prescribed.

2. Subsections (1), (2) and (3) apply to the new calculation, with necessary modifications, as if that person were the Minister.

Same

(6) No change under subsection (5) shall affect any clean energy adjustment that arises as a result of a funding obligation that has been incurred before the change.

Information

(7) The Minister, the IESO, the Financial Services Manager, the Board and electricity vendors shall provide such information as may be prescribed in accordance with the regulations for the purposes of facilitating a change under subsection (5).

Note: On November 1, 2019, section 20 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Financing Plan

Financial Services Manager to prepare Financing Plan

21 (1) The Financial Services Manager shall prepare a written plan entitled the Financing Plan to be used by the Financial Services Manager to evaluate whether potential funding obligations should be incurred for the purposes of a financing entity acquiring and financing an investment interest in accordance with this Act or for the purposes of a refinancing.

Plan to be provided to Minister

(2) The Financial Services Manager shall provide the Financing Plan to the Minister.

Principles

(3) In preparing the Financing Plan, the Financial Services Manager shall have regard to the following principles:

1. Funding obligations should be incurred such that, along with any funding obligations already incurred, the estimated finance amount that would, subject to any refinancing, become due and payable during a reference period will reasonably align with the fair allocation amount determined in respect of the reference period, in each case after reducing the fair allocation amount by the readjustment amount, if any, in respect of the reference period.

2. Incurrences should be implemented in a manner that, in the opinion of the Financial Services Manager, is reasonable, cost effective and that reflects prevailing market terms and conditions.

3. Reasonable assumptions should be made regarding such matters as may be prescribed.

4. Such other principles as may be prescribed.

Limitation

(4) In respect of each reference period from July 1, 2017 to April 30, 2021, no funding obligation shall be incurred that would result in amounts payable in respect of the clean energy adjustment in respect of the reference period unless,

(a) the amounts are payable in respect of a reference period in respect of which there is no readjustment amount; or

(b) if there is a readjustment amount in respect of the reference period, the amounts payable in respect of the clean energy adjustment in respect of the reference period do not exceed the fair allocation amount in respect of the reference period after subtracting the readjustment amount.

Other reports

(5) The Financial Services Manager shall submit to the Minister such reports and information as the Minister may require from time to time and shall, if required by the Minister to do so, examine, report and advise on any question relating to the Financing Plan.

Amendments to plan

(6) The Financial Services Manager may amend the Financing Plan at any time but no such amendment shall affect any clean energy adjustment that has already been determined under section 15 or any funding obligations that have already been incurred before the amendment.

Same

(7) In the event that the Financing Plan is amended, any reference in this Act to the Financing Plan is deemed to be a reference to the plan as amended.

Readjustment amount

(8) In this section,

“readjustment amount” has the meaning set out in the regulations.

Note: On November 1, 2019, section 21 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Incurrence of funding obligations

22 (1) The Financial Services Manager shall ensure that funding obligations incurred for the purposes of this Act are incurred in a manner that is consistent with the applicable Financing Plan.

Financing entities

(2) In accordance with the Financing Plan, the Financial Services Manager may establish or cause to be established one or more financing entities that may incur funding obligations.

Prohibition

(3) Neither the Financial Services Manager nor a financing entity shall provide for funding obligations to be incurred with any recourse to any assets of an electricity vendor, the Board, Ontario Power Generation Inc., the Province or the Lieutenant Governor in Council, except to the extent that any of these persons or entities may be liable to perform obligations or duties arising under this Act or under the express terms of a funding obligation or other agreement.

Effect of amendment to fair allocation amount

(4) Each funding obligation incurred and each transfer made by a financing entity is deemed to be consistent with the Financing Plan and to provide for the reasonable alignment of the estimated finance amount with the fair allocation amount.

Same

(5) For greater certainty, subsection (4) applies despite the failure of the Financial Services Manager to comply with subsection (1).

Note: On November 1, 2019, section 22 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Note: On November 1, 2019, Part IV of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 5)

Part Iv
The Investment Asset

Validity of transfer

16 (1) A transfer under section 26 of this Act as it read immediately before the final plan date constituted a valid and enforceable absolute assignment, conveyance and sale of the corresponding ownership interest in the investment asset to the Fair Hydro Trust. 2019, c. 6, Sched. 3, s. 5.

Effect of transfer

(2) The Fair Hydro Trust shall have a valid and enforceable ownership interest in the investment asset as it is comprised on and after the final plan date. 2019, c. 6, Sched. 3, s. 5.

Deemed perfection, etc.

(3) At the time a transfer occurred under section 26 of this Act as it read immediately before the final plan date, the transfer of the investment asset to the Fair Hydro Trust shall be deemed to have been and shall be perfected, vested, valid and binding as against the transferor and all other persons who have claims of any kind against the transferor. 2019, c. 6, Sched. 3, s. 5.

Same

(4) A transfer described in subsection (3) shall be deemed to have been and shall be a continuously perfected, vested, valid and binding ownership interest in the investment asset as it is comprised on and after the final plan date, despite the change to the composition of the investment asset that became effective on the final plan date. 2019, c. 6, Sched. 3, s. 5.

Same

(5) For greater certainty, upon a transfer to the Fair Hydro Trust under section 26 of this Act as it read immediately before the final plan date, the investment asset that resulted from the transfer was immediately vested in the Fair Hydro Trust, free and clear of any adverse claim other than of any person having a security interest created under or in accordance with the governing documents for existing funding obligations and no adverse claim shall arise as a consequence of the change to the composition of the investment asset that became effective on the final plan date. 2019, c. 6, Sched. 3, s. 5.

Priority of transfer

(6) Subsections (3) and (5) apply regardless of whether the persons who have claims have received notice of the transfer and the property rights and interests acquired by the Fair Hydro Trust shall have priority over any liens in favour of those persons. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Investment asset

17 (1) On and after the final plan date, the investment asset constitutes and shall be comprised of a current and irrevocable property right and interest consisting, collectively, of the following rights and interests of the investment asset owner and which constitute a substitution and continuation of the investment asset that existed before the final plan date:

1. The right and interest to receive and recover amounts required to be paid by the Crown under section 6 from the Crown and the right to determine those amounts in accordance with this Act and the regulations.

2. The right and interest to receive and recover amounts required to be paid by Ontario Power Generation Inc. under section 8 from Ontario Power Generation Inc. and the right to determine those amounts in accordance with this Act and the regulations.

3. All rights and entitlements with respect to,

i. any account, regardless of the name in which the account is opened, if amounts paid by the Crown under section 6 or by Ontario Power Generation Inc. under section 8 are deposited into it,

ii. any accounts opened in the name of or on behalf of the Fair Hydro Trust by the Financial Services Manager or by the Manager of the Fair Hydro Trust, or

iii. such other accounts as may be prescribed, including all amounts on deposit in such accounts.

4. All rights of any kind related to any of the other property rights or interests that comprise the investment asset, including any continuing rights arising under the agreement and instruments under which the investment asset was transferred to the Fair Hydro Trust.

5. All revenue, payments, money and proceeds of or derived from the rights described in paragraphs 1 to 4, regardless of whether it is maintained together with or commingled with other revenue, payments, money and proceeds. 2019, c. 6, Sched. 3, s. 5.

Not affected by failure

(2) An ownership interest in the investment asset is not affected by any failure to enforce, collect or accrue amounts in respect of the amounts payable under section 6 or 8. 2019, c. 6, Sched. 3, s. 5.

No set off, etc.

(3) Subject to subsection (4), the Fair Hydro Trust’s rights and interests under the investment asset shall not be reduced as a consequence of any set off or purported set off or exercise of any remedy by the Crown or Ontario Power Generation Inc., by any affiliate or successor of Ontario Power Generation Inc. or by any person in connection with any default of the Crown or Ontario Power Generation Inc. 2019, c. 6, Sched. 3, s. 5.

Exercise of rights

(4) Subsection (3) does not apply in respect of any exclusion provided for under paragraph 4 of subsection 7 (1). 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Investment asset owner may grant security interest

18 (1) The security interest over the investment asset granted to secure the existing funding obligations and other obligations under or contemplated by the governing documents for the existing funding obligations continues to be valid and enforceable in accordance with its terms. 2019, c. 6, Sched. 3, s. 5.

Same

(2) The investment asset owner may grant a security interest over all or a specified portion of its right, title and interest in, to and under the investment asset to or in favour of any person to secure an existing funding obligation. 2019, c. 6, Sched. 3, s. 5.

Validity

(3) A security interest granted under this Act, including a security interest granted under this Act as it read immediately before the final plan date, shall be valid and enforceable in accordance with its terms. 2019, c. 6, Sched. 3, s. 5.

Perfection and priority of security interests

(4) All provisions of the Personal Property Security Act shall apply to the investment asset and any portion of the investment asset on the basis that the investment asset and any portion of the investment asset is intangible personal property, except as otherwise provided for in this section, and any granting of a security interest by the investment asset owner to secure an existing funding obligation shall, subject to the terms of the existing funding obligation, give rise to a security interest in respect of which that Act applies and may be perfected by registering a financing statement under that Act on that basis. 2019, c. 6, Sched. 3, s. 5.

Proceeds

(5) All proceeds of any portion of the investment asset that are subject to the security interest referred to in subsection (1) or (2) and that are received by the investment asset owner shall immediately be subject to the security interest and shall be perfected without any physical delivery of the proceeds, registration of any financing statement or any further act. 2019, c. 6, Sched. 3, s. 5.

Perfection

(6) The security interest shall be a continuously perfected security interest and shall have priority over any other lien, created by operation of law or otherwise, that may subsequently attach to the property rights and interests in the same portion of the investment asset subject to the security interest, unless the person to whom the security interest has been granted consents otherwise. 2019, c. 6, Sched. 3, s. 5.

Same

(7) The person to whom the security interest has been granted shall have a perfected security interest in revenues or other proceeds that are deposited in any account of any person who may have commingled such revenues or other proceeds with other funds. 2019, c. 6, Sched. 3, s. 5.

Notice required

(8) The secured party shall be entitled to exercise the rights of the investment asset owner only after the secured party has given notice of the enforcement of its security interest to the Fair Hydro Trust. 2019, c. 6, Sched. 3, s. 5.

Interpretation

(9) For the purposes of this section, a security interest is perfected when it is perfected as described in the Personal Property Security Act. 2019, c. 6, Sched. 3, s. 5.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Part V
The Regulatory Asset

Note: On November 1, 2019, Part V of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

IESO deferral

23 (1) The IESO deferral for each month, commencing May 1, 2017, shall be determined by the IESO in accordance with the regulations.

Same, retrospective amounts

(2) For greater certainty, the regulations may provide for the IESO deferral to include an amount that was incurred by the IESO on or after May 1, 2017 and before the day this section comes into force.

Electricity vendors to provide information

(3) Electricity vendors shall provide to the IESO such information as the IESO may reasonably request for the purposes of determining the IESO deferral under subsection (1) and such further information as may be prescribed.

Same

(4) The IESO may rely on information provided by electricity vendors for the purposes of the determination under subsection (1).

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Variance account to be established, maintained

24 (1) The IESO shall establish and maintain a variance account in which it records the following:

1. The IESO deferral for each month.

2. All payments received by the IESO resulting from the exercise of the right of recovery under section 25 and any transfer under section 26.

3. Such other adjustments as may be prescribed, including adjustments in respect of the period that commences on or after May 1, 2017 and before the day this section comes into force.

Recording determinative

(2) Subject to the correction of any obvious error by the IESO, its recording of the balance in the variance account is determinative of the balance as of the time of the recording.

Rights of investment interest owner

(3) No change made by the IESO to the balance in the variance account shall, if the previous balance was relied upon by an investment interest owner in the context of a transfer under section 26, affect the rights acquired by the investment interest owner under the transfer.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Regulatory asset established

25 (1) Effective May 1, 2017, the IESO has the right, exercisable in accordance with this Act and the regulations, to recover the balance recorded in the variance account from specified consumers.

Board to set rates

(2) Subject to subsection (3), the Board shall, from time to time and in accordance with the regulations, determine and set rates payable by specified consumers to allow for the IESO to recover the balance recorded in the variance account.

Limitation

(3) The IESO shall not be entitled to collect all or part of the balance recorded in the variance account from specified consumers before May 1, 2021.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Transfer of regulatory asset

26 (1) The IESO may from time to time, in accordance with this Act and the regulations, transfer a specified portion of the regulatory asset to a financing entity in accordance with this section.

Agreement

(2) An agreement between the IESO and a financing entity in relation to the transfer of a specified portion of the regulatory asset shall provide for consideration of a payment by the financing entity to the IESO in an amount equal to the amount of the specified portion.

Effect of payment

(3) Upon receipt by the IESO of the payment by the financing entity,

(a) the balance in the variance account shall be reduced by the amount of the payment;

(b) the regulatory asset shall be adjusted accordingly;

(c) the financing entity shall acquire a corresponding investment interest; and

(d) the IESO shall retain no further right, title or interest in the corresponding investment interest.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Validity of transfer

27 (1) A transfer of a specified portion of the regulatory asset under section 26 constitutes a valid and enforceable absolute assignment, conveyance and sale of the corresponding investment interest to the transferee.

Same

(2) Without limiting subsection (1), any transfer agreement that states an intention of the parties for the IESO to dispose of a specified portion of the regulatory asset and to assign, convey or sell a corresponding investment interest shall be treated for all purposes as an absolute assignment, conveyance, disposition and sale of the IESO’s right to recover the corresponding amount in the variance account and not merely as a security interest.

Deemed perfection, etc.

(3) At the time a transfer of the regulatory asset is made under section 26, the transfer shall be deemed to have been and shall be perfected, vested, valid and binding as against the transferor and all other persons who have claims of any kind against the transferor.

Priority of transfer

(4) Subsection (3) applies regardless of whether the persons who have claims have received notice of the transfer and the property rights and interests acquired by the transferee shall have priority over any liens in favour of those persons.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Part VI
THE INVESTMENT ASSET

Note: On November 1, 2019, Part VI of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 5)

Investment asset established

28 (1) The transfer of a specified portion of the regulatory asset under section 26 creates an investment asset or, if it is not the first transfer, adds to the investment asset.

Same

(2) Upon transfer of a specified portion of the regulatory asset under section 26 to a financing entity, the investment asset resulting from the transfer is immediately vested in the financing entity, free and clear of any adverse claim.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Investment asset, irrevocable rights and interests

29 (1) The investment asset constitutes a current and irrevocable property right and interest consisting, collectively, of the following rights and interests of investment interest owners:

1. The right and interest to impose, invoice, collect, receive and recover the clean energy adjustment from specified consumers, including the right to determine the clean energy adjustment in accordance with this Act.

2. The right to receive, collect and recover the clean energy adjustment that is imposed, invoiced and recoverable under this Act, including any amounts in respect of the clean energy adjustment that are held by electricity vendors, the IESO and other prescribed parties.

3. All rights and entitlements under such accounts as may be prescribed by regulation and all amounts on deposit in such accounts.

4. The right to enforce the duties and obligations under this Act of each electricity vendor to impose, attribute, charge and invoice for the clean energy adjustment.

5. The right to enforce the duties and obligations under this Act of each electricity vendor and the IESO to collect, receive and remit amounts received by it in respect of the clean energy adjustment, including all collections and the proceeds of any enforcement action undertaken by any electricity vendor to recover payment of the clean energy adjustment.

6. All rights of any kind related to any of the other property rights or interests that comprise the investment interest, including any rights to receive funding rebates.

7. All revenue, collections, claims, payments, money and proceeds of or derived from the rights described in paragraphs 1 to 6, regardless of whether it is invoiced, collected and maintained together with or commingled with other revenue, collections, claims, payments, money and proceeds.

Not affected by failure to impose etc. clean energy adjustment

(2) An investment interest is not affected by any failure to impose, attribute, invoice, accrue or collect amounts in respect of the clean energy adjustment.

No set off, etc.

(3) The investment asset shall not be set off,

(a) by a consumer, an electricity vendor, the IESO, an agent of the investment interest owners or an owner in the Province of a distribution system within the meaning of the Electricity Act, 1998;

(b) in connection with any default of a person mentioned in clause (a); or

(c) by any affiliate or successor of a person mentioned in clause (a).

Exercise of rights

(4) The rights of the investment interest owners to collect the clean energy adjustment and enforce their rights and interests in, to and in respect of the investment asset against a specified consumer shall be exercised in accordance with Part III of this Act.

Collective action required

(5) If one investment interest owner owns a right or interest in the investment asset that comprises less than the entire property right and interest constituted by the investment asset, the right or interest shall only be enforced by the investment interest owner collectively and in coordination with all other investment interest owners, and any agreement among that collective in furtherance of the collective action shall be valid and binding on the investment interest owners as a collective in accordance with its terms.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Transfer of investment interest

30 An investment interest owner may transfer all or a portion of an investment interest to any other investment interest owner, including by way of a transfer of a divided or an undivided interest, in accordance with the Financing Plan.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Validity of transfer

31 (1) A transfer of an investment interest under this Act is a valid and enforceable sale and absolute transfer of the investment interest and confers upon the transferee a valid property right and interest in, to and under the applicable investment interest acquired in accordance with the terms of the transfer.

Same

(2) Without limiting subsection (1), a transfer that by its terms is intended to constitute a sale or absolute transfer shall be treated for all purposes as an absolute transfer of an investment interest owner’s right, title and interest in, to and under an investment interest, and not merely as a security interest, and upon such absolute transfer the transferor shall retain no right, title or interest in the investment interest subject to the transfer, including all rights to the investment interest arising after the transfer.

Deemed perfection, etc.

(3) At the time a transfer of an investment interest is made, the transfer shall be deemed to have been and shall be perfected as described in the Personal Property Security Act, vested, valid and binding as against the transferor and all other persons who have claims of any kind against the transferor.

Priority of transfer, assignment, etc.

(4) Subsection (3) applies regardless of whether the persons who have claims have received notice of the transfer, and the property rights and interests acquired by the investment interest owner shall have priority over any liens in favour of such other persons.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Investment interest owner may grant security interest

32 (1) An investment interest owner may grant a security interest over all or a specified portion of its right, title and interest in, to and under the investment interest to or in favour of any person to secure a funding obligation.

Validity

(2) A security interest granted under this Act shall be valid and enforceable in accordance with its terms.

Perfection and priority of security interests

(3) All provisions of the Personal Property Security Act shall apply to the investment asset and each investment interest on the basis that the investment asset and each investment interest is intangible personal property, except as otherwise provided for in this section, and any granting of a security interest by an investment interest owner to secure a funding obligation shall, subject to the terms of the funding obligation, give rise to a security interest in respect of which that Act applies and may be perfected by registering a financing statement under that Act on that basis.

Proceeds

(4) All proceeds of an investment interest that are subject to the security interest and that are received by the investment interest owner shall immediately be subject to the security interest and shall be perfected without any physical delivery of the proceeds, registration of any financing statement or any further act.

Perfection

(5) The security interest shall be a continuously perfected security interest and shall have priority over any other lien, created by operation of law or otherwise, that may subsequently attach to the property rights and interests in the investment interest subject to the security interest, unless the person to whom the security interest has been granted consents otherwise. 

Same

(6) The person to whom the security interest has been granted shall have a perfected security interest in revenues or other proceeds that are deposited in any account of any electricity vendor, an agent of an electricity vendor or other person who may have commingled such revenues or other proceeds with other funds.

Notice required

(7) The secured party shall be entitled to exercise the rights of an investment interest owner only after the secured party has given notice of the enforcement of its security interest to the IESO.

Interpretation

(8) For the purposes of this section, a security interest is perfected when it is perfected as described in the Personal Property Security Act.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 5 - 01/11/2019

Part VII
Miscellaneous

Appointment of agent, invoicing or collection

33 (1) If a prescribed circumstance applies, the Lieutenant Governor in Council may by regulation appoint a person to carry out some or all of the obligations of an electricity vendor under this Act in the place of an electricity vendor with respect to invoicing or collection.

Same, not Crown agent

(2) For greater certainty, a person appointed under this section is not an agent of the Crown for any purpose, despite the Crown Agency Act.

Note: On November 1, 2019, section 33 of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 6)

Sequestration

33 (1) A court in the Province of Ontario may, upon application by the investment asset owner or a secured party, order the sequestration and payment of amounts in respect of amounts payable under section 6 by the Crown or amounts payable under section 8 by Ontario Power Generation Inc., in each case for the benefit of the investment asset owner or secured party. 2019, c. 6, Sched. 3, s. 6.

Same

(2) An order under subsection (1) does not limit any other remedies available to the applicant. 2019, c. 6, Sched. 3, s. 6.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 6 - 01/11/2019

Board’s authority

34 (1) Each electricity vendor, the IESO and the Financial Services Manager shall maintain such accounts and provide such information to the Board as the Board may require for the purposes of carrying out its responsibilities under this Act, in the form and manner and within the time required by the Board.

No hearing required

(2) Despite anything to the contrary in the Ontario Energy Board Act, 1998, the Board may exercise any of its responsibilities under this Act without a hearing.

Note: On November 1, 2019, section 34 of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 6)

Choice of law

34 The law governing, as applicable, the validity, enforceability, attachment, perfection, priority and exercise of remedies with respect to a transfer under this Act, a security interest in the investment asset, the amounts payable under sections 6 and 8 and any undertaking of the Crown under section 5 shall be the laws of the Province of Ontario. 2019, c. 6, Sched. 3, s. 6.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 6 - 01/11/2019

Sequestration

35 (1) A court in the Province may, upon application by an investment interest owner or a secured party, order the sequestration and payment of amounts in respect of the clean energy adjustment, collections or remittances, as applicable, for the benefit of the investment interest owner or secured party by any person or entity authorized to collect amounts in respect of the clean energy adjustment.

Same

(2) An order under subsection (1) does not limit any other remedies available to the applicant.

Note: On November 1, 2019, section 35 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 6)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 6 - 01/11/2019

Choice of law

36 The law governing, as applicable, the validity, enforceability, attachment, perfection, priority and exercise of remedies with respect to a transfer under this Act or the creation of a security interest in the regulatory asset, the investment asset, the clean energy adjustment or the undertaking of the Crown under section 5 shall be the laws of the Province.

Note: On November 1, 2019, section 36 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 6)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 6 - 01/11/2019

Conflict

37 The provisions of this Act and the regulations apply despite any provision of any other Act regarding the attachment, assignment or perfection, or the effect of perfection or priority of any transfer or security interest.

Note: On November 1, 2019, section 37 of the Act is amended by adding the following subsection: (See: 2019, c. 6, Sched. 3, s. 7)

Proceedings Against the Crown Act

(2) For greater certainty, this Act prevails over sections 19 and 21 of the Proceedings Against the Crown Act. 2019, c. 6, Sched. 3, s. 7.

Note: On the later of the day section 170 of Schedule 17 (Crown Liability and Proceedings Act, 2019) to the Protecting What Matters Most Act (Budget Measures), 2019 comes into force and November 1, 2019, the day section 7 of Schedule 3 to Bill 87 (Fixing the Hydro Mess Act, 2019) comes into force, subsection 37 (2) of the Act is repealed and the following substituted: (See: 2019, c. 7, Sched. 17, s. 170 (3))

Crown Liability and Proceedings Act, 2019

(2) For greater certainty, this Act prevails over sections 5 and 27 of the Crown Liability and Proceedings Act, 2019. 2019, c. 7, Sched. 17, s. 170 (3).

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 7 - 01/11/2019; 2019, c. 7, Sched. 17, s. 170 (1-3) - not in force

No further approvals, etc.

38 Despite any requirement under any Act, no approvals, notices or authorizations other than those specified in this Act are required under the Financing Plan or in relation to the determination of the fair allocation amount.

Note: On November 1, 2019, section 38 of the Act is amended by striking out “or in relation to the determination of the fair allocation amount” at the end. (See: 2019, c. 6, Sched. 3, s. 8)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 8 - 01/11/2019

Liability

39 (1) No action or other civil proceeding shall be commenced against any employee of the Province or Ontario Power Generation Inc. for any act done in good faith in the exercise or performance or the intended exercise or performance of a power or duty under this Act, the regulations or for any alleged neglect or default in the exercise or performance in good faith of such a power or duty.

Same

(2) Nothing in subsection (1) shall be read as limiting the effect of subsection 19 (1) of the Electricity Act, 1998 or subsection 11 (1) of the Ontario Energy Board Act, 1998.

Same

(3) Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act, subsection (1) does not relieve the Crown of liability in respect of a tort committed by a person mentioned in subsection (1) to which it would otherwise be subject.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection 39 (3) of the Act is amended by striking out “subsections 5 (2) and (4) of the Proceedings Against the Crown Act” and substituting “subsection 8 (3) of the Crown Liability and Proceedings Act, 2019”. (See: 2019, c. 7, Sched. 17, s. 133)

Section Amendments with date in force (d/m/y)

2019, c. 7, Sched. 17, s. 133 - not in force

References in marketing materials and offering documents

40 No person shall include, in marketing materials or offering documents relating to the financing of funding obligations, references to any rights, obligations, guarantees or undertakings arising under section 5 unless the prescribed requirements, if any, are satisfied.

Note: On November 1, 2019, section 40 of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 9)

Compliance and restraining orders

Application to court

40 (1) On the application of the investment asset owner, the Superior Court of Justice may make an order described in subsection (2) if it is satisfied that the Financial Services Manager has failed to comply with or has contravened this Act or the regulations or that the Financial Services Manager will fail to comply with or will contravene this Act or the regulations. 2019, c. 6, Sched. 3, s. 9.

Order

(2) The Superior Court of Justice may, by order,

(a) direct the Financial Services Manager to comply with this Act or the regulations;

(b) restrain the Financial Services Manager from contravening this Act or the regulations; or

(c) require compensation to be provided by the Financial Services Manager to the investment asset owner. 2019, c. 6, Sched. 3, s. 9.

Same

(3) An application under subsection (1) may be made by the investment asset owner in addition to exercising any other right of the investment asset owner. 2019, c. 6, Sched. 3, s. 9.

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 9 - 01/11/2019

Compliance and restraining orders

Application to court

41 (1) On the application of an investment interest owner, the Superior Court of Justice may make an order described in subsection (2) if it is satisfied that an electricity vendor, the IESO or the Financial Services Manager has failed to comply with or has contravened this Act or the regulations or that one of those entities will fail to comply with or will contravene this Act or the regulations.

Order

(2) The Superior Court of Justice may, by order,

(a) direct the electricity vendor, the IESO or the Financial Services Manager to comply with this Act or the regulations;

(b) restrain the electricity vendor, the IESO or the Financial Services Manager from contravening this Act or the regulations; or

(c) require compensation to be provided by the electricity vendor, the IESO or the Financial Services Manager to the investment interest owner.

Same

(3) An application under subsection (1) may be made by an investment interest owner in addition to exercising any other right of the investment interest owner.

Note: On November 1, 2019, section 41 of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 9)

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 9 - 01/11/2019

Regulations

42 (1) The Lieutenant Governor in Council may make regulations in respect of the following matters:

1. Governing anything that is required or permitted to be prescribed or that is required or permitted to be done by, or in accordance with, the regulations or as authorized, specified or provided in the regulations.

2. Defining, for the purposes of a regulation, words and expressions used in this Act that are not defined in the Act.

3. Governing the incurrence of debt for the purposes of the definition of “refinancing” in subsection 1 (1).

Note: On November 1, 2019, paragraph 3 of subsection 42 (1) of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 10 (1))

3. Governing transitional matters relating to the enactment of Schedule 3 to the Fixing the Hydro Mess Act, 2019.

4. Governing the inclusion of information under this Act on or with invoices, which may include requiring notice to be provided by electricity vendors to specified consumers and other prescribed persons regarding the adjustments, including providing for different requirements in different circumstances and for different classes of specified consumers.

Note: On November 1, 2019, paragraph 4 of subsection 42 (1) of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 10 (1))

5. Governing the inclusion of information about the clean energy adjustment and any other matters provided for under this Act on or with invoices issued to specified consumers, including the form that the information must take and the form of the invoices and the form of any notice to be provided to the specified consumer under this Act.

Note: On November 1, 2019, paragraph 5 of subsection 42 (1) of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 10 (1))

6. Governing the manner by which invoices or notices provided for under this Act are to be provided to specified consumers and other prescribed persons.

Note: On November 1, 2019, paragraph 6 of subsection 42 (1) of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 10 (1))

7. Providing for a right of compensation for investment interest owners affected by the failure of any person or entity to give effect to the rights and interests provided for under section 29 and the manner in which such a right may be enforced under this Act.

Note: On November 1, 2019, paragraph 7 of subsection 42 (1) of the Act is repealed. (See: 2019, c. 6, Sched. 3, s. 10 (1))

8. Prescribing the time within which any action required by this Act may be required to be done.

9. Providing for such other matters as the Lieutenant Governor in Council considers advisable to carry out the purpose of this Act.

Limitation

(2) Despite subsection (1) or any other Act, no regulation under this Act shall have the effect of reducing, impairing, postponing or terminating the obligations of specified consumers to pay amounts in respect of the clean energy adjustment or impairing or postponing the invoicing, collection, remittance or recovery of the clean energy adjustment.

Note: On November 1, 2019, subsection 42 (2) of the Act is repealed and the following substituted: (See: 2019, c. 6, Sched. 3, s. 10 (2))

Limitation

(2) Despite subsection (1) or any other Act, no regulation under this Act shall have the effect of reducing, impairing, postponing or terminating,

(a) the obligations of the Crown to pay amounts under section 6 or impairing or postponing the recovery of the amounts under section 6; or

(b) the obligations of Ontario Power Generation Inc. to pay amounts under section 8 or impairing or postponing the recovery of the amounts under section 8. 2019, c. 6, Sched. 3, s. 10 (2).

Section Amendments with date in force (d/m/y)

2019, c. 6, Sched. 3, s. 10 (1, 2) - 01/11/2019

Part VIII (OMITTED)

43, 44 Omitted (amends, repeals or revokes other legislation).

Part IX (OMITTED)

45 Omitted (provides for coming into force of provisions of this Act).

46 Omitted (enacts short title of this Act).

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