McCarthy Tetrault on the new procurement process
Law firm McCarthy Tetrault (which acts for wind power developers on occasion) offers this opinion on what the new process for procurement of large renewable power projects might look like. Note what it won’t include is any way for municipalities in Ontario to say “no” to huge power projects, saying instead the Ontario Power Authority will continue to enact government policies.
Ontario’s new procurement process for large renewable energy projects
Retrofitting Ontario’s FIT Program
In June 2013, we highlighted some important changes by the Ontario Power Authority (“OPA”) to Ontario’s renewable energy procurement program for microFIT, Small FIT, Large FIT as well as Contract Capacity Set-Asides.
Perhaps the most significant of these changes for renewable energy project developers was the removal of Large FIT projects (over 500 kilowatts) from the OPA’s Feed-In Tariff (“FIT”) Program. Pursuant to a Directive from the province’s Ministry of Energy, the OPA was directed to replace Large FIT Projects with a new competitive procurement process to be developed based on feedback from municipalities, Aboriginal communities, industry associations, the general public and other energy stakeholders.
On August 30, 2013, the OPA delivered its initial report and recommendations to the Minister of Energy based on this stakeholder feedback. Though the report does not discuss recommendations for identifying the quantity or types of renewable generation facilities that may be required, it does reveal a few important details of what a possible procurement process for large renewable energy projects in Ontario might look like. In particular, the OPA recommends:
- Continuing the “Request for Proposals” (“RFP”) model with a bidder pre-qualification process and project bid price as key RFP evaluation factors;
- Taking into account proponent experience and financial capability;
- Building on the recent consultation process by requiring community engagement sessions and council deputations during the RFP phase;
- Providing greater municipal control over land use and siting, with the OPA continuing “to reflect government policy priorities and set baseline land use”; and
- Adopting “minimum community acceptance criteria”, which extend beyond environmental or regulatory requirements to instead focus on acceptable standards for a project in a community.
The commencement and the exact content of the renewable procurement process for large renewable energy projects will be issued via a Minister’s Directive at a later date following completion of the province’s Long-Term Energy Plan review (which is slated for release later this month).