While it may sometimes seem unfair when rules are changed in the middle of a game...

... that is the nature of the game when one is dealing with goverment programs.

That was the statement made by the Ontario Divisional Court in a recent decision dismissing an application for judicial review of actions take (or not taken) by the Ontario Power Authority and the Ontario Minister of Energy in connection with green energy Feed-in-Tariff projects.  A long list of project proponents (118 in total) sought declarations from the Court that the OPA and the Minister "acted unreasonably in failing to process applications in accordance with" the OPA's own rules and that the Minister's new "Directions" in the FIT program are "unfair, discriminatory and ultra vires the enabling legislation".  The Applicants also sought an order requiring the OPA to process their existing FIT applications in accordance with the previous FIT Program Rules.

The complaint was that changes made to the FIT Program Rules were unfair to those project proponents who had already applied under the old rules - the new rules would apply to all outstanding project applications that had not already reached a certain point in the review/approval process.  Included with the new rules were lower prices to be paid for the electricity generated by FIT projects.

The Divisional Court found that the standard of review of the Minister's decision (in making and applying the new FIT rules) was reasonableness; the Court had to give considerable deference to the decision of the Minister.  In the end, the Court did not agree with the Applicants that the decisions in question were unreasonable.  In response to the argument made about legitimate expectations, the Court said:

Turning then to the ground of legitimate expectations, it is perhaps useful to begin with a definition of what the principle of legitimate expectations involves. The principle was set out in Canada (Attorney General) v. Mavi, 2011 SCC 30 (CanLII), [2011] 2 S.C.R. 504 where Binnie J. said, at para. 68:

Where a government official makes representations within the scope of his or her authority to an individual about an administrative process that the government will follow, and the representations said to give rise to the legitimate expectations are clear, unambiguous and unqualified, the government may be held to its word, provided the representations are procedural in nature and do not conflict with the decision maker’s statutory duty.

Once again, I find little to which the applicants can point that would constitute a representation that is “clear, unambiguous and unqualified”. The statements to which the applicants do refer that were made by Ministers Smitherman and Duguid do not, on their face, amount to representations that are unambiguous and unqualified. They are also not directed specifically to the applicants. Rather, they were statements of general application. In addition, the statements were clearly made in relation to the FIT Program itself and have to be read with, and understood in the context of, the detailed requirements and conditions of that program to which I have made reference above. Read in context, the applicants could not reasonably assert a legitimate expectation based on these statements that the criteria for the FIT Program or the process under it would not change.

The Court also disagreed with the Applicants that they had gained any vested rights through their involvement in the FIT program application process.  Likewise, the Court found that there was nothing to prevent the new FIT rules from having retroactive effect.  It was in the course of communicating this conclusion that the Court made its comment about changing the rules of the game mid-course.  As with tax laws, "no one has a vested right to continuance of the law as it stood in the past".  When planning one's affairs based on the current state of legis

Read the decision at: Skypower CL I LP et al. v. Minister of Energy (Ontario) et al.

New Ontario MicroFIT Program Rules released

From the Ontario Power Authority:

The final microFIT Program Rules, Contract and other program documents have now been posted on the microFIT website.

A key change from the draft to the final version of the microFIT Rules is on the timelines for the microFIT process. Applicants will be required to seek an Offer to Connect from their local distribution company (LDC) within 30 days of the OPA confirming that their application is complete.  This will be followed by a 90-day period during which the applicant must receive an Offer to Connect. This change is to provide sufficient time for LDCs to process Offer to Connect requests from microFIT applicants.

Existing microFIT applicants (those who applied on or after September 1, 2011) will be subject to the revised microFIT Program Rules and pricing and need to resubmit their applications by August 10, 2012. If they do so, they will maintain their original timestamp, and their application will be processed in the order in which they were originally received. New microFIT applicants will need to be patient, as their applications will not be processed until after all resubmitted applications from existing applicants have been processed.

The final FIT Rules and Contract will be posted shortly, and information on the small and large FIT application windows will be provided when details have been finalized.

OPA FIT and Micro-FIT Program Updates

The OPA's November 22, 2010 is available at: OPA Bi-Weekly Update Report. 

Close to 23,000 applications have been filed for micro-FIT projects, of which 99% are solar PV projects.  Over 16,000 conditional offers have been made by the OPA, and close to 2,000 contracts have been executed.  The 23,000 applications represent 207 MW of potential power.

On the FIT program side, there have been over 3,700 applications:

OPA decides to pay $64.2 per kWh for ground-mounted solar power

Ontario Power Authority Finalizes Price for New Ground-mounted Solar Category


NEWS RELEASE

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Consultations Inform Fair Outcome

August 13, 2010, Toronto, ON – The Ontario Power Authority today announced that following a 30-day consultation period, it has finalized the price for the new microFIT ground-mounted solar price category at 64.2 cents per kilowatt-hour (kWh).

The finalized price reflects input received during the consultation period and incorporates a wider variation of cost inputs and project configurations, including higher operating and maintenance costs for ground-mounted tracking systems.

The price strikes the right balance between providing a reasonable rate of return to electricity generators and protecting ratepayers from higher than necessary electricity prices.

“The outcome of a constructive consultation process is that these changes provide fairness for those who have applied to the existing program and good value for clean energy,” said Minister of Energy and Infrastructure Brad Duguid. “The microFIT program will continue to be a sustainable program that encourages residents to participate in the growing clean energy economy.” “The microFIT program has been tremendously successful since it was launched in October 2009,” says Colin Andersen, Chief Executive Officer of the Ontario Power Authority. “With these changes, it has been made even stronger going forward.”

The new price category is effective immediately for eligible projects with applications submitted after noon on July 2, 2010, when a new price category was proposed. Eligible ground-mounted applications submitted prior to noon on July 2, 2010, will receive the original price of 80.2 cents/kWh whether or not they have received a contract or conditional offer. These applicants will also have until May 31, 2011, to install and request a connection for their projects before higher domestic content requirements are required. Ground-mounted solar microFIT contracts signed and conditional offers received before July 2 will continue to be eligible for the original price of 80.2 cents/kWh.

During the 30-day consultation period, the OPA held three web-enabled teleconferences with 1,665 participants and received 1,645 written submissions about the proposed price. Based on this input, the OPA is also making the following announcements:

To improve communication and increase transparency, the OPA is establishing a microFIT program advisory panel that will provide advice on program evolution, including the two-year review process. The panel will be made up of industry, academic and other stakeholder representatives.

Commercial aggregators (e.g., businesses that lease land or rooftops from individuals for multiple renewable energy projects) will no longer be allowed to participate in the microFIT program. This will ensure that the microFIT program is focused on its original purpose – encouraging homeowners, farmers, farm co-operatives, Aboriginal communities, small businesses and institutions such as schools, to own and develop small renewable projects.

The panel will make recommendations, on an expedited basis, about appropriate contracting provisions for aggregators to reflect the unique nature of commercial micro projects. This will help ensure that commercial aggregators can continue to participate in the clean energy economy but do so outside of the microFIT program structure.

To implement these changes announced today, new microFIT applications will be accepted beginning on Friday, August 20.

The OPA has received almost 19,000 microFIT applications since the program was launched less than a year ago. More than 6,100 conditional offers have been sent to applicants and almost 800 microFIT projects are now feeding clean energy into Ontario’s grid.

The OPA is working to respond quickly to microFIT applicants. Most ground-mounted applications that have been submitted will be processed by the end of September. Details on the timeline goals for offering conditional contracts are available on the microFIT website, microfit.powerauthority.on.ca.

The OPA will host a webinar on August 18 from 2 to 4 p.m. to answer questions about the finalized price, the advisory panel and other details. Information on how to participate can be found on the microFIT website.

The new microFIT program encourages the development of small-scale renewable energy projects (solar, wind, water, bioenergy) of 10 kilowatts or less from a diverse range of producers, including homeowners, farmers, schools, First Nations and small businesses. It is part of a broader Ontario feed-in tariff (FIT) program, the most comprehensive of its kind in North America.

The Ontario Power Authority is responsible for ensuring a reliable, sustainable supply of electricity for Ontario. Its four key areas of focus are: planning the power system for the long term, leading and co-ordinating conservation initiatives across the province, ensuring development of needed generation resources, and supporting the continued evolution of the electricity sector.

Media contacts:

Tim Butters
Ontario Power Authority
416-969-6307
Toll Free: 1-800-797-9604

Andrew Block
Office of the Honourable Brad Duguid
Minister of Energy and Infrastructure
416-327-6747

©2009 Ontario Power Authority

Ontario Power Authority holding public consultation process about planned price drop for solar power

In its latest edition of News Online, the Ontario Power Authority (OPA) says that its plan to drop the price offered for solar power from 80.2 cents per kWh to 58.8 cents per kWh is consistent with providing an 11% return to developers over the 20 years of a Feed-in Tariff (FIT) contract.  For instance, the OPA writes:

Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher upfront capital costs but produce more energy (higher capacity factor) and therefore generate more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a rate of return that is comparable to roof-top solar projects as well as other FIT projects.

Ground-mounted projects without tracking have lower capital costs but also generate less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the costs of these projects in particular which have come down relative to rooftop installations since the program was introduced, enabling a reduction in the tariff rate.

A more in-depth article on returns on investment for solar projects is available from the OPA at: Details of proposed rate calculation.

The OPA is also conducting a 30-day consultation period on the new pricing scheme:

Note: There will be a 30-day comment period on the proposed new price category. Please send all comments and submissions to microFIT@powerauthority.on.ca. While all emails will be read, not all emails will receive individual responses.

Comments also can be mailed to the following address and must be postmarked no later than Tuesday, August 3, 2010.

Ontario Power Authority
120 Adelaide Street West, Suite 1600
Toronto, Ontario M5H 1T1
Attention: Ground-Mounted Solar PV

Ontario Power Authority lowers price for ground-mounted solar power

Ontario Power Authority reports on boom in green energy project applications

The Ontario Power Authority (OPA) is reporting that, as of June 14, 2010, it has received 2,200 applications for large Feed-in Tariff (FIT) projects and more than 15,000 applications for smaller microFIT projects.  Of the 15,000 microFIT applications, 3,518 conditional offers have been made by OPA to applicants.  These smaller projects include solar panel installations being made on Ontario farms.

In response to the large volume of microFIT applications, OPA is advising:

Due to the very high volume of microFIT applications, we expect it will take until the fall to process all of them. If your application was submitted before March 31, 2010, you can expect to hear back from us by August. If you submitted your application by May 31, it will be processed by September.

More information on the FIT program (including large area solar installations and large wind turbines) is available at: OPA Feed-in Tariff Program.

More information on the microFIT program is available at: OPA microFIT Program.

Electricity Conservation on Ontario Farms - Winter 2010 Edition released

The Ontario Power Authority has just released its Winter 2010 edition of "Electricity Conservation on Ontario Farms", its newsletter designed to "provide information about energy conservation and efficiency and innovative applications to help Ontario farmers better manage their electricity costs."  In this issue, OPA discusses the opportunity to generate and sell solar energy under the province's micro-FIT program. 

I attended the Western Fair Farm Show in London last Wednesday.  Although most of what I saw was much the same as in previous years, the one change I noted was the proliferation of solar energy businesses participating in the show.  These companies obviously see an opportunity to supply solar energy technology to farmers with the micro-FIT program in place. 

Does anyone else who attended the show have comments about the solar energy options being presented?

Electricity Conservation on Ontario Farms

The Ontario Power Authority has released the latest edition of its publication "Electricity Conservation on Ontario Farms", including information on how to take advantage of the new Feed-in-Tariff (FiT) program and restrictions on the installation of solar panels on farm land. Click on the title above to access the OPA's page.

If you're interested in developing an energy project on your land and need advice, you can get in touch with me by email through my profile or at http://www.cohenhighley.com/goudy1.htm.