APPrO web page of resources for Standard Offer projects

This page is under development

APPrO web page of resources on the Ontario provincial
Standard Offer Contracts
 
 
This web page is designed to help the novice and the experienced project developer deal with a wide range of the regulatory and developmental issues related to Ontario’s Standard Offer Contract (SOC) program.
 
Anyone interested in the Standard Offer Program (SOP) is invited to browse this page for access to resources on technical, legal and business issues facing small and renewable power project developers in Ontario. Please feel free to suggest other links and resources that might be added. You can contact us by e-mail at <This email address is being protected from spambots. You need JavaScript enabled to view it.>.


Background information:

The Standard Offer Program in Ontario is run by the Ontario Power Authority or OPA. The OPA provides a great deal of information on the program, much of which can be accessed through a specialized website operated by the OPA at the following location:
http://www.powerauthority.on.ca/sop/Page.asp?PageID=1224&SiteNodeID=162&BL_ExpandID=161

APPrO has been a vocal advocate for the creation of a standard offer program for many years and has played an advisory and co-ordinating a role in a wide range of related policy and consultative processes.

 
Even though standard offer projects are relatively small, they face many of the same problems, having to meet most of the same standards and earn many of the same approvals, as much larger projects.
 
The links below will take you to background information on the provincial SOC program, the approval processes and regulatory systems in Ontario. You will also find links to many of the suppliers, industry events and associations active in the field.
 
This is not the only page of resources on the Standard Offer Program, but it is designed to be one of the most inclusive, practical, and industry-oriented. This site tries to address a range of related concerns including renewable energy and high-efficiency non-renewable electricity sources, provincial procurement, distributed generation, and remote communities.
 
Many new developers ask APPrO about the differences between the issues faced by developers of Standard Offer projects compared to those facing developers of larger projects. Transmission issues such as accessing the savings created by net load billing, distribution issues such as achieving greater predictability in connection costs, and public policy issues such as the province-wide price of power averaging well below the cost of new supply, are examples of common concerns. The provincial emission control requirements for NOx and SOx are generally simpler for projects under 25 MW, and the grid operator’s standards are less stringent for those under 10 MW in size. However, some special challenges exist for smaller projects. For example, there is no standardized method for assessing and monetizing the technical and system benefits of distributed generation.

There are many areas in which large and small generators benefit from close collaboration, and a few areas where the approaches will likely differ, but some degree of co-ordination is required between the two fields, to ensure reasonable conditions for investment and optimal development of the resources.

 

Approval requirements

In summary, power generation developers in
Ontario have to secure the following general types of approvals:
- Generation license from the OEB
- Technical approvals for equipment safety (TSSA)
- Ministry of Environment (Certificates of Approval)
- Municipal zoning and land use
- Distribution and / or transmission interconnections (local distributor and/or Hydro One)
- Electrical Safety Authority
- Ministry of Natural Resources, depending on the natural resources being used.
 
All SOP projects will be connected to distribution systems, so proponents will need to establish contact with their local utility. To “Find your Local Utility” please see the following page on the IESO's website: http://www.ieso.ca/imoweb/siteShared/local_dist.asp?sid=ic
According to the Distribution System Code, all local electricity distributors must now have information on their website for distributed generation or SOP proponents, including a Single Point of Contact. Please note that the terms "electricity distributor," "local utility," "local distributor," and "electric LDC" are considered synonymous in this material.

If a prospective developer has determined that his or her local utility is actually Hydro One, then the
following page from Hydro One, with information specifically for Standard Offer proponents, will be useful:
http://www.hydroonenetworks.com/en/customers/generators/generation_connections/FAQs/default.asp
However, developers should be aware that Hydro One is just one of 91 local utilities in Ontario. If your project is not in Hydro One territory, you will need to contact your local distributor, rather than Hydro One.

Several groups are working on developing an overall summary of approval requirements, which we hope to publish in the near future. In the meantime, here are some links with preliminary information on the approval requirements facing new developers in Ontario:
 
http://www.energy.gov.on.ca/index.cfm?fuseaction=renewable.developers_approvals
http://www.hydroonenetworks.com/en/electricity_updates/generation/pre_bid.asp
http://www.ainc-inac.gc.ca/clc/tp/wgd/eas_e.html
 
 
Regulatory Information

- OEB (Ontario Energy Board): http://www.oeb.gov.on.ca
- OPA (Ontario Power Authority): http://www.powerauthority.on.ca/
- Ministry of Energy: http://www.energy.gov.on.ca
- ESA (Electrical Safety Authority): http://www.esasafe.com/business/lnk-001.php
 
An important part of the regulatory framework in Ontario is the Distribution System Code (DSC), which is established by the Ontario Energy Board. "The Code" governs a great deal of the terms distributors use for dealing with generation connections. The OEB maintains a central reference point about the DSC at the following location: (http://www.oeb.gov.on.ca/documents/cases/EB-2005-0488/dsccode_20070123.pdf) Note in particular the connection application process diagrams in Appendix F. (See p. 8, 15, 22, 29.) The full DSC and all appendices are available on the following page of the OEB website (but please note that you have to search for or scroll down to the section on the Distribution System Code): http://www.oeb.gov.on.ca/html/en/industryrelations/rulesguidesandforms_regulatory.htm

OPA pages on the SOP:
http://www.powerauthority.on.ca/Page.asp?PageID=1224&SiteNodeID=161
OPA contact: This email address is being protected from spambots. You need JavaScript enabled to view it.
 
Ontario Electricity RFP pages on the SOP:
http://www.ontarioelectricityrfp.ca/Index.aspx?id=64
 
OEB pages on the SOP:
http://www.oeb.gov.on.ca/html/en/industryrelations/ongoingprojects_standardofferprogram.htm
The OEB's application form for a generator license

The OEB has posted several advisory pages for small generators which are available at the following location:
http://www.oeb.gov.on.ca/html/en/industryrelations/smallgenerators.htm

The OPA is also working on a variation of the SOP that will apply to non-renewable power projects using clean and/or high efficiency technologies. Current information on the status of the "Clean Energy Standard Offer Program" is available at the following location:
http://www.powerauthority.on.ca/Page.asp?PageID=1224&SiteNodeID=245


Distributor Connection processes

Hydro One, Ontario's largest electrical distributor, has published the following pages on the processes it uses for managing requests from generators for distribution connections:
http://www.hydroone.com/en/electricity_industry/renewable_tech/
http://www.hydroonenetworks.com/en/customers/generators/generation_connections/default.asp
http://www.hydroonenetworks.com/en/electricity_updates/generation/pre_bid.asp

The following page from Hydro One (also cited above) contains information specifically focused on Standard Offer proponents:
http://www.hydroonenetworks.com/en/customers/generators/generation_connections/FAQs/default.asp


 
OEB regulation of standards and procedures in the distribution system:
 
Minister's Directive on Connection of New Generation to Local Distribution Systems (Connection Directive)
(RP-2003-0113)
http://www.oeb.gov.on.ca/html/en/industryrelations/archivedinitiatives/licences/ministersdirective_connection.htm
 
Proposed Amendments to the Distribution System Code (EB-2005-0488)
http://www.oeb.gov.on.ca/html/en/industryrelations/ongoingprojects_dsc_chapter3.htm
 
 
Development Information

- The Ontario Ministry of Agriculture, Food and Rural Affairs has prepared a number of resources to help farmers and rural residents producing their own energy and use the Standard Offer Program. The following links are just the beginning:
http://www.omafra.gov.on.ca/english/engineer/facts/06-055.htm
http://www.omafra.gov.on.ca/english/engineer/energy.html

- Links to lists of renewable energy resources and suppliers:

(APPrO, CanSIA, and CanWEA)
- Financing sources
- IPPSO FACTO articles on the standard offer program
 

Related programs:

Please note that the following program are not part of the Standard Offer Program. The following references are for RFP-based procurement of power contracts or net metering. They may be of interest to SOP proponents, but are entirely separate from the SOP.

CHP Procurement
Renewables Procurement
Net metering
Remote Communities
Documents on Hydro One’s Connection policy and procedures:
- HONI’s distribution connection policy
- Proposed queuing procedures
- Customer Connection Procedures in accordance with the Transmission System Code issued July 2005
(Contact APPrO for more information on the above)
 
Net metering information:
http://www.energy.gov.on.ca/index.cfm?fuseaction=english.news&body=yes&news_id=87
http://www.energy.gov.on.ca/index.cfm?fuseaction=english.news&body=yes&news_id=112
http://www.energy.gov.on.ca/index.cfm?fuseaction=english.news&back=yes&news_id=112&backgrounder_id=81
Ontario's net metering regulation: http://www.e-laws.gov.on.ca/DBLaws/Regs/English/050541_e.htm

Hydro One's page on net metering:
http://www.hydroonenetworks.com/en/customers/generators/net_metering/default.asp

 
APPrO Initiatives for Standard Offer Contract proponents
- Preferential rates to attend APPrO 2006, available for qualifying new green power entrepreneurs
- Report on APPrO’s July 2005 collaborative workshop between CDEA, AMPCO and the DG Task Force
- Proceedings of APPrO 2005 and APPrO 2006 Conference sessions on the standard offer
- APPrO joint presentation on fuel risk mitigation for small clean energy projects (June 16 2006)
 
 
APPrO positions and recommendations on the standard offer
 
- APPrO’s original recommendations on the structure of the Standard Offer:
http://www.appro.org/APPrO_recommendations_on_RFQ_May_20_2004.pdf
(Saying that a “standard offer” for smaller projects was required at that time, as well as removal of the stipulation requiring IMO market participation.)
 
- APPrO’s recommendations for the connection directive
- APPrO’s submissions to the OEB and OPA on the Standard offer consultations in 2005:
  APPrO Submission to the OEB on the Standard Offer_Program, December 5, 2005.pdf
 "APPrO Perspectives on Standard Offer Contract" presentation to the Ontario Power Authority, November 16, 2005  
- APPrO’s filings in recent OEB hearings on standby rates and fixed distribution charges
- APPrO submission to the Legislative Committee on Alternative Fuels, February 19 2002, recommending a Renewable Portfolio Standard (RPS) for Ontario:
 
Articles from IPPSO FACTO:

Groups call for standard offer for smaller projects
Toronto: One of the most universal responses to the release of the renewable energy RFP on April 28 appears to be the need for a standard offer for smaller projects. Both renewable and non-renewable proponents, and many of those associated with both large and small-scale facilities, seem to agree that such an arrangement would simplify matters for all concerned.
                APPrO and the DG Task Force issued very similar statements to government during the week of May 10:
- The RFP process should include a standard offer for smaller, DG-type projects
- The RFP contracts should not require proponents to be IMO market participants.
                The minister said on April 15, “Distributed generation, which is also attractive from a security perspective, holds significant promise for the environment, as it suggests an electricity system that minimizes massive transmission networks, and focuses resources only where they are absolutely necessary. Our desire is to help Ontarians unlock the potential for efficient electricity generation that is around them, and we will remove barriers, free up resources and bring new thinking and new ideas to the challenges that lie before us.”
- IPPSO FACTO, June 2004
 
APPrO sponsors multi-group discussion on Cogeneration procurement
Toronto: At least five separate organizations have come together to try to work out an approach for procurement of cogeneration capacity in Ontario. “It’s gratifying to see how ready and willing the various groups are to step outside their individual mandates and work jointly on a shared concern around cogeneration,” said APPrO Executive Director Jake Brooks. There is general agreement that the current RFP and procurement processes do not work well for cogeneration, primarily because cogeneration facilities, although highly-efficient, are baseload operation and  generally more capital-intensive than alternatives like combined cycle facilities.
                A special purpose meeting was convened by APPrO on July 25 to address these kind of concerns. Billed as a “Cross-sector meeting of Energy Industry Groups on Cogeneration procurement,” it was an opportunity to share ideas toward the development of recommendations for the OPA. (See separate article on OPA procurement consultations, elsewhere in this issue of IPPSO FACTO.)
                The session featured presentations on proposed procurement mechanisms by COGEN Ontario, The Distributed Generation Industry Task Force, and CDEA - Canadian District Energy Association. In fact, the three groups effectively represent three different types and scale ranges of cogeneration systems and applications. Although none are strictly limited by specific boundaries, COGEN Ontario is focusing on industrial cogeneration, which tends to be between 5 and 50 MW, the CDEA works on district energy systems which tend to be 1 to 10 MW, and the distributed generation group covers the smaller scale systems, usually below 10 MW.
                Remarks were offered by representatives of APPrO, the Association of Power Producers of Ontario, AMPCO, Association of Major Power Consumers in Ontario, and the OPA, Ontario Power Authority.
                The immediate purpose of the meeting was to help co-ordinate and improve the submissions being prepared by the various groups who were appearing before the OPA on the subject of provincial power procurement plans in the final week of July. Because of the nature of the OPA’s consultation process, the entire event was organized and implemented in only a few days’ time.
                Although there were no formal conclusions, it appeared as though the participants arrived at some general understandings. For example, Safouh Soufi of SMS Energy-Engineering and President of COGEN Ontario presented some principles for a cogeneration procurement model that seemed to attract reasonably wide support. He started with the assumption that the government will be procuring 1,000 MW of cogeneration, as it announced in June of this year. He proposed that approximately 850 MW of this would likely be in the form of industrial cogeneration and the remaining 150 MW would likely be in the form of district energy systems. There was understandably some dissension around the precise numbers, but the group agreed that these figures should be considered flexible, and used only as starting points. There seemed to be general agreement at least that there would inevitably be two streams, industrial and district energy, and that each should have its own minimum or floor set. The group also agreed that the upper limit of 1,000 MW for all cogeneration procured should also be treated as a starting point. “The OPA should be allowed to contract for more if there are more than 1,000 MW of qualifying projects, just as it did with the first renewables RFP,” said APPrO Executive Director Jake Brooks.
                After discussion about whether certain projects would be classified as industrial cogeneration or district energy, the group seemed to agree that whatever eligibility envelopes are established for procurement purposes, inclusion of a given project should be based on objective criteria rather than their formal membership in a technology group (ie heat rate, relative size of thermal host and generation unit, multiple heat customers, etc., rather than just whether they are nominally classified as "district energy" or "industrial cogen").
                Mr. Soufi made a number of other recommendations which seemed to garner general support. For example, he recommended the use of a Standard Contract in conjunction with Bilateral Negotiations to address project specific barriers or parameters. This proposal is consistent with recommendations made by APPrO in the procurement consultations, citing the difficulty of having an open competition based on price alone for a single site. Soufi also recommended the practice of having an Independent Monitor present at all negotiations, and employment of the Fairness Commissioner at various stages of the process to assure fairness in outcomes.
                For more information, or to receive a copy of any of the presentations made during the day, please contact Jake Brooks <This email address is being protected from spambots. You need JavaScript enabled to view it.> at the APPrO office.
- IPPSO FACTO, August 2005

 
Other Associations and Links:
 
Link to the Canadian Solar Industries Association SOC website:
http://www.cansia.ca/soc.asp
 
Link to the website of the Distributed Generation Industry Task Force:
http://ca.geocities.com/dgtaskforce/
 
Ministry of Energy web pages on small renewable energy development information:
http://www.energy.gov.on.ca/index.cfm?fuseaction=renewable.developers
http://www.energy.gov.on.ca/english/pdf/renewable/REDO.pdf
 
OSEA (Ontario Sustainable Energy Association): http://www.ontario-sea.org/
CanWEA (Canadian Wind Energy Association): http://www.canwea.ca/
OWA (Ontario Waterpower Association): www.owa.ca
WADE (The World Association for Decentralized Energy): www.localpower.org

 
The online directory of CanSIA members is available at the following location: 
http://www.cansia.ca/directory/
 
The 'Merton Rule' is a groundbreaking planning policy which requires the use of onsite renewable energy to reduce annual carbon dioxide (CO2) emissions.

 

Further resources from the Distributed Generation Industry Task Force:
 
DGTF submissions to the Ministry’s 2005 consultation on transmission and distribution
Click here for a copy of the Task Force's Presentation to the OPA, July 28, 2005 (PDF format)
Click here for a copy of the Task Force's Presentation to the Ministry of Energy, May 14 2004 (PDF format)

 

Financial Resources for alternative energy technologies, before commercial readiness:

 
The Innovation Demonstration Fund: Ontario Premier Dalton McGuinty announced a new fund, the Innovation Demonstration Fund, on June 5, 2006. Part of the government's $160-million “Ideas to Market strategy” the fund is designed to help companies turn research and ideas into new products and services for the marketplace. The four-year, $24-million Innovation Demonstration Fund will help Ontario entrepreneurs develop promising new technologies by supporting them at the pilot stage. The fund focuses on new bio-based, environmental and alternative energy technologies.
                More information on the Innovation Demonstration Fund and Ideas to Market strategy is available on the Ministry of Research and Innovation's website at www.mri.gov.on.ca/english/programs/idf/guidelines.asp.
In addition to the Innovation Demonstration Fund, the Ideas to Market strategy includes:
• $46 million will be invested over four years to help early-stage companies become more investor-ready and move breakthrough ideas and technologies further along the commercialization process.
• $90 million will be invested in early-stage, innovative companies in partnership with venture capital funds, pension funds and the federal government.
The Ministry of Research and Innovation will be rolling out the second two initiatives under the Ideas to Market strategy over the coming months.
 
 
Sustainable Development Technology Canada:
http://www.sdtc.ca/en/index.htm


Disclaimer:
This web page is made available by APPrO as a convenience for developers of small power projects in Ontario and members of the public. No warranties are made or implied and all advice should be checked with a qualified advisor before making any significant decisions.



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