Energy Back in the Legislature: Government Tables Bill 165, Keeping Energy Costs Down Act

Overview

Following a statement from the Minister of Energy in December 2023 to reverse a decision of the Ontario Energy Board regarding rates for natural gas distribution projects (EB-2022-0200), the Ontario government tabled Bill 165 - Keeping Energy Costs Down Act, 2024 and announced several decisions regarding energy policy in the province.

The move is aimed at addressing housing affordability and improving stakeholder participation and evidence gathering at Ontario’s electricity and natural gas regulator. This represents the Government’s first legislative action after the Electrification and Energy Transition Panel delivered its 29 recommendations to the Minister of Energy. The Government cites the Panel in reaffirming that natural gas is an important resource, fulfilling essential and distinct functions in Ontario’s energy system today as a fuel for electrical power generation, space and water heating, and industrial and agricultural industries.

The Bill has passed its first reading and is expected to be debated in the Legislature at a second reading before being sent to a Legislative Committee for further review, comment and amendment.

As the legislative process unfolds, the ultimate impacts of the changes will be further developed.

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Summary

The Government of Ontario has signalled the following policy decisions:

1. Interim Revenue Horizon: to be prescribed for natural gas distribution projects at the long-established precedent of 40 years until 2029, deviating from the OEB’s decision to set the revenue horizon at 0 years.

2. Directing Authority: enable the Government to require the following actions from the OEB:

 a) Generic Hearing: to hold a hearing on any issue at any ongoing proceeding that will resolve that issue. For example: procedural timetable, policy determination, questions of law, intervenor process etc.

 b) Revenue Horizon: to hold a hearing that determines an appropriate revenue horizon to replace the prescribed interim revenue horizon.

 c) Stakeholder Participation: to invite specified stakeholders to participate in a hearing.

 d) Leave-to-construct: to approve or re-adjudicate an application to construct gas transmission assets as a matter of public interest and require the cost of such projects to be socialized.  

3. Natural Gas Policy Statement: to be developed over the coming months that will set clear parameters for the OEB on the official government policy regarding the role of natural gas.

4. Leave-to-construct threshold: exemption raised to $10M from the previous threshold of $2M for new natural gas projects.

5. Chair of the Ontario Energy Board: following the late Richard’s Dicerni’s passing last year, a new Chair of the Board is expected to be announced in the near term.

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The Sussex team of experts will continue to track Bill 165 as it makes its way through the legislative process at Queen’s Park. Please contact your Sussex consultant to help you navigate the impacts Bill 165 can have to your interests.