Ontario making changes to electricity planning

Opting out not in the plan for energy infrastructure
Tuesday, December 10, 2013
By Barbara Carss

Opportunities for dissent will have counterbalancing consequences for saying “no” under a proposed new approach for planning and locating electricity infrastructure. Earlier this fall, Ontario Minister of Energy Bob Chiarelli affirmed the government’s intentions to improve upfront consultation and integrate electricity planning into municipalities’ mandated Official Plans.

This arises most directly from recommendations in a joint report from the Ontario Power Authority (OPA) and the Independent Electricity System Operator (IESO) entitled, Engaging Local Communities in Ontario’s Electricity Planning Continuum. However, the underlying inspiration is generally assumed.

“Effectively, they are closing off the possibility for another Oakville,” suggests Mark Winfield, an associate professor with York University’s Faculty of Environmental Studies and co-chair of its Sustainable Energy Initiative.

The Auditor General of Ontario, Bonnie Lysyk, recently pegged the cost of cancelling a contracted gas-fired electricity generating plant in Oakville at upwards of $675 million. The project was halted in response to vigorous local opposition, which — as the Auditor General’s report highlights — was clearly obvious earlier in the decision making process.

“The Oakville location was almost certainly going to be trouble,” concurs Sean Conway, a former member of provincial parliament and cabinet minister in Ontario, now public policy adviser with Gowling Lafleur Henderson LLP. “It’s a very expensive failure to achieve what the Power Authority wanted to do.”

Nor is it the only costly broken deal. Last spring Ontario’s then Auditor General, Jim McCarter, reported that the cost of cancelling the contract for a gas-fired generating plant in Mississauga will amount to about $275 million. Decisions to stop both projects were announced in the lead-up to the 2011 provincial election.

Consultation leads to binding choices

Recommendations in the OPA-IESO report now call for “community outreach, early and often.” This would occur in part through regional electricity planning advisory committees with representation from local elected officials, First Nations and Métis, business and community groups, which would provide input to system designers and decision makers and act as the liaison to the wider community.

New planning policies and requirements are spelled out in a second broad category of recommendations, including proposed amendments to the Provincial Policy Statement that guides land use planning, accommodation of growth and the infrastructure to support it. This would add a new definition for an Electricity Plan along with associated directives for municipalities to ensure electrical generation and transmission capacity for current and projected needs in accordance with that plan.

“These are the critical recommendations,” Conway maintains. “Electricity planning was essentially a case apart from all the other kinds of planning a community would do, either on its own or with the Province. It is going to be added to the list of things the local communities are going to be responsible for.”

The proposed definition of an Electricity Plan makes it clear that planning will be done in harmony with province-wide or region-wide objectives and other exercises that the OPA and IESO are currently authorized to oversee. It states: “An Electricity Plan may identify conceptually preferred locations for electricity infrastructure.”

Once the Electricity Plan is in place, it’s also proposed that notifications should be registered on the title of properties in proximity to “existing or potential future electricity generation and/or transmission facilities”. This would be a condition of approval of subdivision, condominium or site plans even if the electricity infrastructure is still conceptual and/or yet to obtain planning or environmental approvals.

“The spin on this is all about respecting engagement, but when you actually look at the tools that are being attached to it, they are reasserting provincial muscle,” says David Tang, a partner specializing in municipal and real estate law with Gowling, Lafleur Henderson LLP. “It looks like the process will determine the need (for electricity infrastructure), move to establish a number of optional locations and then they want the municipalities to choose one and respect that. There would be a commitment to local involvement early in the process but, once it occurs, local communities wouldn’t get an opportunity to undo all that work.”

Local governments have longstanding experience choosing sites for other potentially contentious infrastructure projects such as landfills, energy-from-waste facilities, wastewater treatment plants and highways, which also tend to spark opposition and protracted debate. The public process around electricity infrastructure won’t necessarily be any easier, but Conway supports the approach that makes municipalities more accountable.

“They can’t simply say: ‘no’. We are going to have to move to a different kind of debate and I think that’s a good thing,” he says. “There will be more than one way to do this, but we have to have the discussion, look at the choices and the costs and consequences of those choices.”

Top-down meets grassroots

Much is still unknown beyond Chiarelli’s initial pledge that the government will begin to implement the recommendations, but it seems likely that the OPA and IESO (or a successor agency) will continue to play a major role in decision making.

Meanwhile, the provincial government has launched a somewhat parallel municipal energy planning program to encourage conservation and strategies to reduce greenhouse gas emissions, and Winfield foresees the potential for such community-based agendas to clash with macro-level Electricity Plans. For example, a municipality might set aggressive targets for energy self-sufficiency that would differ from electricity system planners’ projections of future demand for generation and transmission capacity.

“The most complicated part is probably around the community energy planning piece and how it will intersect with the OPA’s planning style, which is decidedly top-down,” Winfield muses. “Community energy planning — that’s things like conservation and distributed generation — seems to be acquiring sort of a momentum of its own, whereas the tradition of electricity planning in Ontario, which has been top-down planning, is that you end up with unwilling hosts.”

Auditor General Lysyk’s report underscores the role top-down planning played in the case of the Oakville gas-fired generating plant.

“The OPA told bidders that municipal opposition to a power plant would not be considered in its evaluation of their proposals,” she writes. “As the OPA was aware, the Town of Oakville was very actively and publicly opposed to a power plant within its borders. Of the four developers the OPA had short-listed in March 2009 to build a power plant for the southwest Greater Toronto Area, only one was proposing a plant in Oakville.”

Accounting for Oakville’s opposition might have resulted in a more cost-effective decision. “In a democratic society, there are certain limits to how far you can push an unwilling host,” Winfield notes.

The recommended new approach alternatively defines electricity infrastructure as one of municipalities’ democratic responsibilities. While the OPA-IESO report calls for flexibility for communities to choose an infrastructure option geared to their own local needs, it warns that there may also be tradeoffs.

“With choice comes responsibility; therefore, such mechanisms should explore issues such as cost responsibility and reliability of service resulting from these specific preferences,” the report states.

Leave a Reply

Your email address will not be published. Required fields are marked *