On August 13th, 2019, the Ontario Energy Board (OEB) issued a letter outlining its requirements regarding the connection of distributed energy resources (DERs) by licensed electricity distributors.
OSPE’s submission to the Energy Board highlighted 14 Remuneration Policy Recommendations:
- Align rate design closer to the actual underlying cost of electricity service and value of this energy to the grid, while concurrently preserving a competitive market-based supply pricing mechanism.
- Remove inefficiencies in the application processes needed to connect DERs. The analysis of such inefficiencies should be undertaken by a licensed Professional Engineer experienced in DER integration studies and incorporate lessons learned in other jurisdictions.
- Remove barriers that prevent synergistic combinations of equipment and functionality that provide benefits to distribution, transmission or generation requirements or that reduce costs for the DER project.
- Allow real upstream system benefits to be included in the justification and approval of DER projects.
- Remove barriers to new business models and retail rate structures that allow more competition, higher efficiencies, lower emissions or higher reliability and resilience of the electricity supply.
- Incorporate lessons learned from other jurisdictions that have implemented a high level of penetration of DERs.
- Allow technology choices to be made based on lifecycle economics rather than by predetermined technology preferences.
- Introduce retail rate designs that encourage greater use of surplus clean electricity to offset higher emission energy sources.
- Subsidies for social or regional development purposes should be funded out of tax income rather than rate income to ensure local businesses are not competitively disadvantaged.
- Make any new rate structures voluntary to reduce objections by entrenched private interests and accelerate adoption by consumers willing to take advantage of the new rate structures.
- The IESO should charge all high voltage power system consumers, including LDCs, the global adjustment based on average peak monthly megawatt (MW) demand and not based on megawatt/hr (MWh) energy use.
- The LDCs should charge or pay for DER capacity contributions based on average peak monthly kilowatt (kW) demand or supply and not based exclusively on kilowatt per hour (kWh) energy use or supply
- Transmission charges should be allocated based on average peak monthly MW demand and not on MWh energy use.
- Industry participants should be able to compete on an equivalent basis without any participants being seen to have preferential access.
After initial consultations, the OEB established a Working Group that focuses on connection processes, timelines, technical agreements and cost related issues.
OSPE is pleased to have been asked to be part of this Working Group.
The objective for the Working Group is to provide recommendations for the OEB. The recommendations will tackle a variety of issues, from providing guidance on industry regulation to amendments for the Distribution System Code.
OSPE supports the OEB’s review of barriers to Distributed Energy Resources (DER). The rapid improvement in DER capabilities along with significant technology cost reductions poses a risk to LDC’s existing business model. The uncertainty to the LDC business implications is a barrier to achieving the full benefits that can be realized from DER projects.
Technology and finances are inseparably interwoven. Economic decisions that have been primarily the responsibility of financial and policy staff also have significant impact on technological and operational sectors. Accordingly, OSPE believes that any changes should be reviewed by Professional Engineers to ensure that the full scope of impacts have been considered and understood.
Ontario Engineers possess the knowledge to ensure that any changes made prioritize safety while serving long-term business and residential interests. Innovation in the energy sector is the path for Ontario’s energy sector to grow, satisfy customer demands, support business competitiveness and create new exportable technologies.
OSPE is happy to be part of this Working Group, and will always ensure that engineers are heard.