Ontario's Energy Minister announced today that the province will increase municipal control over the siting of future large (> 500 kW) renewable energy projects by replacing the existing feed-in-tariff (FIT 2.0)1 program with a competitive procurement process. The new process will require renewable energy developers to work directly with municipalities to select locations for any future large renewable energy project.

The announcement included a renewed commitment to small renewable energy projects by making 900 MW of new capacity available between now and 2018 for the small FIT and microFIT programs. The following proposed measures are intended to strengthen municipal participation in the current small FIT project stream:

  • Revise the small FIT rules (between 10 and 500 kW) to give priority to projects partnered or led by municipalities.
  • Work with municipalities to determine a property tax rate increase for wind turbine towers.
  • Provide funding to help small and medium-sized municipalities develop Municipal Energy Plans regarding infrastructure options and increasing conservation.

Numerous Ontario municipalities have resisted renewable energy development, and this increased role may create significant challenges in siting future projects, particularly wind developments. The Ministry has not yet issued any details of the proposed process. The changes may be significant, for example, it is not known if developers with time-stamped applications will be required to undertake a new site selection process with the local municipality. The Minister clarified that existing contracts will be protected and municipalities will not have an absolute veto to ban renewable energy projects.

This announcement comes on the heels of two recent energy planning directives issued by the Minister of Energy to the OPA, the Independent Electricity System Operator (IESO) and other key agencies to (1) consult and issue recommendations by August 1, 2013, for a new integrated regional energy planning process that would focus on improving how large energy infrastructure projects are sited in Ontario and (2) update Ontario's Long-Term Energy Plan. It is not clear how this new regional energy planning process will relate to the new procurement process for large renewable energy projects (referenced above).

The Energy Minister also announced this week that domestic content requirements under the FIT program would be revised in accordance with the recent World Trade Organization ruling which found that Ontario's current requirements were inconsistent with Canada's trade commitments.

Footnote

1 See our Flash of August 13, 2012, and Flash of November 26, 2012, for discussions on the development of the FIT 2.0 rules.

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