Ontario Regulation 429/04: Updates to Bilateral Power Purchase Agreements (PPAs)

Yesterday, the Ontario Ministry of Energy released a proposal to enable bilateral Power Purchase Agreements (PPAs) to facilitate direct energy purchases between large Class A customers and electricity producers. The proposal would amend the treatment of Global Adjustment by allowing qualifying commercial and industrial consumers to offset their demand from the grid through PPAs with clean energy facilities that are not connected behind the customer’s meter. The types of technologies that may be eligible under the proposal include wind, solar, small hydroelectric (i.e., less than 10 megawatts), biofuel and battery storage.

If approved, the proposal would allow the output from eligible generation facilities to be treated as if it were connected behind-the-meter of the qualifying customer, thereby reducing that customer’s peak demand factor on the five highest demand hours by the amount of coincident generation. This ‘virtual’ net metering construct would thereby reduce Global Adjustment exposure for the customer and enhance industrial competitiveness in the province while creating a new contracting option for clean energy projects.

The proposed effective date for the amendments is May 1, 2024.

To comment on the proposal, please click here. Due date to comment is December 17, 2023.